HL Deb 27 November 1979 vol 403 cc337-66

3.5 p.m.

Lord TREFGARNE

My Lords, on behalf of my noble friend Lord Carrington, I beg to move that the European Communities (Greek Accession) Bill be now read a second time. My noble friend had intended to open this debate himself, but, because of his preoccupation with other pressing matters, well known to your Lordships, he has regretfully had to withdraw. It therefore falls to me to move this Second Reading.

Your Lordships will have seen that the Bill is very short. Clause 1, the sole operative clause, simply amends the European Communities Act 1972 to provide that the Greek Treaties of Accession to the European Economic Community, Euratom and the Coal and Steel Community are included among the so-called basic "Community Treaties" referred to in Section 1 of the 1972 Act. This will ensure, once Greece enters the Community on 1st January 1981, that the United Kingdom is able to give effect to the obligations incumbent upon it as a result of the Treaties of Greek Accession.

The accession of Greece to the European Communities is one of the most encouraging developments on the European scene in recent years, encouraging both for the Community and for Greece itself. To appreciate the significance of Greek accession we need to consider the historical perspective of relations between the Community and Greece. Greece was the first country to enter into an accord with the Community; namely, the Treaty of Athens, signed in 1962. This treaty established the Association between the Community and Greece and looked forward to eventual Greek membership of the Community. Greece's accession now is therefore the fruit of a long period of close association. This progress was however interrupted during the Colonels' régime, when the development of relations between the Community and Greece was arrested. Emerging from that period of dictatorship Greece, under the wise leadership of Mr. Karamanlis, soon concluded that an essential buttress for the restoration of its democracy was emphasis upon Greece's European vocation. Accordingly Greece applied for membership of the Community in 1975.

Doubts about the application were expressed at the time, mainly by those who wished to see the Community consolidate its achievements after the first enlargement before embarking upon a second. But clearly the Community could not rebuff Greece. How could the Community, founded as it was upon the post-war ideals of liberty, peace and European unification, turn its back upon a country moving steadily towards a new democracy, a country moreover with a profound European cultural tradition? The Community had to, and did, extend a warm welcome to Greece. I have mentioned that there were doubts about whether the Community could accommodate a further enlargement. These doubts were understandable, especially since Portugal and Spain were waiting in the wings. It will not be easy for the Community to absorb three new relatively less developed economies, each with a much larger agricultural sector than is the case for the existing Community of Nine. We in this country are already only too painfully aware of the extravagance of agricultural spending in the Community (which accounts for about three-quarters of the budget) and the need for reform of the Common Agricultural Policy. Other Community policies and institutions will also come under strain as a result of enlargement. The regional and social funds, which already in our view account for too small a slice of Community expenditure, will need to be spread even more thinly among the Member States. And the decision-making capacity of the Community, already the target of much criticism, will hardly be improved by an increase in the number of points of view which will need to be reconciled. Adding three new languages, moreover, could cause serious practical difficulties. These, and other problems, were identified in your Lordship's Select Committee's admirably comprehensive report on enlargement of March 1978.

The Government have no doubt that considerable reform of Community policies and institutions will be required over the coming years, but not only because of additional membership. Enlargement will in most cases only aggravate problems which are already there, making solutions more urgent but not necessarily making new difficulties. Let us in any case not exaggerate the extent of these problems. To take an example: Greece does indeed have a relatively large agricultural sector. But its accession will only lead to an increase of something like 5 per cent. in the Community's agricultural budget. This is not a meagre amount, but neither does it represent a dramatic change in the pattern of Community spending.

So far as the institutional aspects are concerned the Community has decided not to try to solve all the problems at the same time as Greek accession. Instead, the Community intends to take a careful long-term view, on the basis of a report by three experts on Community affairs, including Mr. Edmund Dell, known as the "Three Wise Men". This will be presented very shortly. The Government will study the report carefully, with a particular view to the implications of enlargement as a whole for the effective functioning of the Community's institutions.

We must guard, however, against assuming that there are easy answers. On languages, for example, the logical solution might be to make more use of one or two working languages. But in practice one could hardly deny a Greek Minister, say, the right to express himself in his own tongue on a topic important to his country. And documents which are to have the force of law in all Member States must clearly be translated into the languages of those States.

My Lords, I turn now to the implications of Greek accession for the United Kingdom. On balance I expect the economic effects to be favourable. With the lowering of Greek tariffs and removal of other Greek import restrictions our exporters will be afforded increased opportunities in an economy with one of the fastest growth rates in Europe. And Greek agricultural products, which do not compete with our domestic agricultural production, will enjoy slightly improved access to this country.

On the other hand, fears have been expressed about the possibility of increased exports to the United Kingdom of Greek textiles. These fears are not to be disregarded. The Government are well aware of the problems facing the United Kingdom textile industry as a result of low cost competition. But we have to accept that there will be some increase in the exports of Greek textiles to this country. It is not unreasonable for the Greeks to seek such an increase when we export to them about twice as much as we import from them. We should, at the same time, remember that the Greek Accession Treaty contains a safeguard clause which enables action to be taken in the event of serious disruption in the textile or other sectors.

Concern has also been expressed about the budgetary cost to the United Kingdom of Greek accession. According to our calculations that cost might be of the order of £65 million a year (at 1979 prices) at the end of the transitional period, assuming policies remain constant. I hope that your Lordships will agree, however, that this question is best looked at in the context of the budgetary arrangements as a whole. Our position on this matter is well known. We are determined to obtain more equitable arrangements and will press this point very firmly indeed at the European Council in Dublin later this week. The cost to the United Kingdom, therefore, of Greek accession will be significantly less than £65 million when we achieve satisfaction on the general budgetary question.

My Lords, in welcoming Greece to the Community we must not forget Turkey. The Community attaches great importance to its relations with countries of the Eastern Mediterranean and is determined that Greek accession should not lead to any estrangement between itself and Turkey. The Community has for some months been trying to come to a closer understanding with that country, on the basis of the present Association Agreement. I hope that, following the recent formation of a new Government in Turkey, fresh impetus will be given to these efforts.

In conclusion I should like to reiterate the wholehearted welcome which this Government extend to Greece. We look forward to working together with them inside the Community of Ten. We also look forward eventually to a Community of Twelve. As I have indicated there will, of course, be problems of adjustment. And, in our enthusiasm to assist the revival of democracy in Southern Europe, we must not close our eyes to those problems. But I believe that enlargement is a worthy undertaking, fully justifying the effort that will be required to make a success of it. My Lords, I beg to move.

Moved, That the Bill be read 2a—(Lord Trefgarne.)

3.16 p.m.

Lord GORONWY-ROBERTS

My Lords, the House will be grateful to the noble Lord for so clearly setting out the pros and cons of this new accession to the European Community. As he quite rightly said, there is a general welcome for the Bill which will, of course, also have to be considered in relation to the Treaty of Rome and the Treaty of Accession—a much more extensive document, for which this Bill is the providing instrument.

I repeat that there is all-party support for this accession in Parliament and in the country, and not unreasonably because our own ties with Greece have been, for many centuries, very close and very warm and they continue to be so despite the temporary misunderstanding that supervened during the repressive regime of the Colonels.

Politically it is of course imperative that Greece should join the Community. It should join its natural family of European democratic countries. Democratic Greece is perhaps doubly welcome because it has so effectively emerged in recent years from a period of dictatorial repression. From 1st January 1981 it will be a full member of the European Community adding greatly not only to the strength of democracy in the Community but to the strength and future health of democracy in Greece itself. Moreover, I think that by some time in 1983 two other countries lately emerged from periods of internal tyranny—Portugal and Spain—will adhere in full membership to the Community.

So, democracy in Europe, contrary to the impression that some people have from time to time, is on the advance. From the Atlantic to the Aegean we can see a strengthening, a consolidation, indeed an expansion of the democratic system on the Continent. It is of great importance to the survival and spread of freedom not only in Europe, but in other parts of the world, notably perhaps Africa. So to paraphrase a famous remark: Europe, by its democratic ex- ample, may encourage other parts of the world to find their way to effective democracy.

May I in passing, speaking as we are of our friends the Greeks who have taught us so much in the arts of democracy, offer the House the following thought. While democracy means popular sovereignty by the elective process, it does not stop there—it also entails genuine observance of basic human rights. It is our hope that the 12 member-countries of Europe—as there will be from about 1983 onwards—will not only conform generally in regard to their techniques of elective democracy but also increasingly conform with each other in the application of basic human rights.

Therefore, between 1973 and 1983, the Community will have doubled its membership from six to 12. That is a political gain of immense importance and therefore all the more reason why the Community should examine its economic and financial basis with a view to swift, necessary reform. The undoubted political advantages which we all expect from these new adherences to the Community must not be imperilled by persistence in economic arrangements which are demonstrably inequitable and unworkable. We shall not long sustain political unity if, at the same time, we are not working out acceptable economic and financial policies in the Community.

In Europe today politically it is a moment of opportunity; economically, it is the moment of truth. It is in the interests of European unity, for which so many of us have worked all our lives and for which many of us have fought, that the efforts of the present Administration and those of the Prime Minister in Dublin and elsewhere to convince our partners in Europe of the need for radical adjustments in the Common Agricultural Policy and in the European budgetary system should succeed.

We on this side of the House of course find it agreeable to offer our full support to the efforts which the Prime Minister and others are making in these directions these days. It was our policy; we exerted ourselves in the last Government on exactly these lines—I might add not always with the support of the then Opposition, which, from time to time, instead of backing the British case for justice and fair play, constantly accused us of being poor Europeans. I would not for a moment accuse the present Prime Minister or any one of her colleagues in this or in any other place of being poor Europeans because they are advancing the unanswerable case, which we put together two or three years ago and persisted in, for a proper reappraisal of the budgetary and other arrangements which are now part of the Community.

There will, of course, be problems and difficulties arising from the accession of Greece, and certainly from the accession a little later of Portugal and Spain. Greece itself must decide the balance of advantage to itself and has certainly, through its Parliament, if not through a referendum, decided that it is a good thing for it to join. But, as old friends of Greece, we may be permitted to take sympathetic note of one or two outstanding problems which will face the Greeks when they become full members. For instance, Greece has a developing industry, but it is relatively new and small-scale. It is now being aided quite substantially by the Greek Government, but that kind of aid will have to be phased out fairly rapidly. No doubt the Greek authorities have considered whether the curve of accession will match the curve of repudiation of its present internal policies. We have had the same difficulties.

However, although its industry may face certain difficulties arising from full membership—particularly the full force of competition from stronger industrial countries within the Market itself—it will, in fact, offer increased competition in the British market to some British industries. The noble Lord, Lord Trefgarne, instanced in particular our textile industry, which many of us would describe as a strategic industry in Britian. Very great concern has been voiced, and continues to be expressed, by management and unions about the possible effects of Greek membership on our textile and clothing industry in the next few years. I am hopeful that this new threat will be marginal.

At the same time I welcome the tone in which the noble Lord referred to the general safeguards clause which—and it is always a common form clause—attends these instruments of membership. I take it that if there is a serious danger of this new situation fundamentally threatening, for instance, our textile industry, we shall have recourse to this general safeguards clause; otherwise why include it at all? I believe that it is Article or Clause 130. Certainly in a period when some of our closest friends in the Community go far beyond the general safeguards clause in defence of what they consider to be their vital interests—for instance, in unilaterally forbidding the import, of British lamb—I would not think that a British Government would be chary, if necessary, of using this clause to protect their truly vital interests and those of their people.

The Greeks will also need to take part completely in the budgetary system. One wonders what the impact of their participation in the "own resource" system will be, particularly of their having to adopt a VAT system which hitherto—I think I am right in saying this—they have not had. But these difficulties and problems are perhaps counterparted by the advantageous situation which a very largely agricultural country will enjoy on accession to membership. I am told that about a third of the Greek population is engaged on the land in agricultural activity. The Community percentage is 9 per cent. When we consider that a so largely agricultural country will be joining in 1981, followed closely by Spain and Portugal—which, if not quite so agricultural in preoccupation, nevertheless have very substantial proportions of their populations engaged on the land (Spain has 22 per cent. of its people wedded to agriculture and Portugal has 28 per cent.)—the effect will be to enlarge the Common Agricultural Fund and also to constitute new and substantial claimants upon it and upon the resources of the Community.

The British position, already difficult to the point of vigorous protest, may conceivably—unless we make progress this week and in the next few weeks—find itself infinitely worsened because of this most welcome addition of three congenial countries to the Community. That is the paradox and the challenge of the Community at present. I return to the point. Those of us who have worked hard to achieve political unity in Europe, and who will continue to do so, are justified in saying here at home and indeed to our partners in the Community that that major objective—so essential to peace and to the survival of democracy in Europe—cannot be guaranteed unless our economic and financial policies are such as to sustain rather than to threaten joint political action and a common political purpose.

I say this at a time when I and others have been glad to experience a growth in political co-operation—and I use it as a term of art—in the Community. The Community, acting through the five, came very close indeed to a solution of the Namibian question, on which the solution of the Zimbabwe question may well turn, and one has not given up hope that the European initiative, which glowed so promisingly last year, may be revived in this connection. All the more reason, I repeat, why we and our partners, not in an adversary situation but truly in a partnership situation, should radically reappraise economic and financial policies so that the major objective of political unity should be achieved.

Another consequence of the accession of Greece and of Spain and Portugal will be that the regional and social funds, already inadequate, will be stretched even further. The additions to the kitty will not of course make up for the increased demands on the kitty. Here again one must note that, against a norm of 100, the GDP per capita figure for Greece is 50, so its claim on the regional and social fund is obviously a strong one; that of Spain is 60; of Portugal 34. Therefore here again there is a need to look at the resources available from the joint wealth of the Community for the subvention of the poorest and weakest of its members.

However small in population, each member of the Community has equal rights as well as obligations. Greece will be represented in the European Parliament in proportion to its population of about 99 million; which of course has an inbuilt basic element which applies to all members, large or small. It will have 24 members compared with 81 for the United Kingdom, Germany, France and Italy. It is not, in the aggregate, a very large addition, but it is the addition of one extra attitude—national and, I very much hope, temperamental—which will necessarily change the tone and tempo of debate there. Here is a new interest represented in the Parliament, and it will be the duty of everybody to give the most sympathetic attention to what our new Greek colleagues will be saying in that assembly.

Even more so it means that Greece, and later Spain and Portugal, will be entitled to a commissioner equal in rank and inlluence—I almost said "power" but I am told that I should not use that word about commissioners—so that side by side with the commissioner who happens to be British, and the commissioner who happens to be Irish, French, or German—and sometimes two from the larger countries—there will be a Greek commissioner. The Commission, therefore, in enlarging itself will perhaps be diversifying the elements of argument and decision within it. This is a matter for study, hard work, and accommodation. It is right to mention these matters.

Then again in the Council of Ministers where each Minister—Foreign Minister, or his appointed deputy for specific purposes—has in effect the right of veto, you are adding to the wealth of advice and argument, but also to the potentiality for disagreement and possibly veto. This is inescapable, and I would not have it otherwise. But we must not take all these things for granted, and think that they will resolve themselves. They will not. They all need constant attention and study, and particularly so perhaps in the work of the Commission.

On the question of decision by the Council, I should like to repeat what my right honourable friend said in another place when they discussed this matter. He said that the abandonment of the principle of unanimity in the decisions of the Council of Ministers is totally unacceptable, at least to Her Majesty's Opposition. It is essential that there should be, at the very top in the Council of Ministers, this instrument of rejection which any country can, in the last resort, use in order to defend what it considers to be its truly vital interests. There is room—I agree with the noble Lord, Lord Banks, who on many occasions has spoken constructively about this aspect of the matter, and it is already part of our experience in Brussels—for accommodation, and indeed certain decisions are already taken by majority vote. But nothing should be done to erode the capacity of any one of the member nations, through its appointed Minister, to say "no", if in fact the real, the vital national interest of that country is deemed to be in peril.

The thing will not work or survive unless the participants feel this ground of certainty about their own interests to be a firm one. We can argue academically as to whether this is right or not, but the reality of it is that the Community will only survive if a sufficiency of regard for the fundamental feeling of the peoples of the countries taking part in the Community is always observed.

I conclude by once more joining the Minister in a warm welcome to Greece on joining the league of democratic nations in Europe, mindful of the Greeks' immense contribution as a people for so many centuries to the culture not only of Europe but of the world. This country is perhaps pre-eminently the product of the Judaeo-Christian classical tradition, and one looks forward beyond Europe, certainly into the Mediterranean and possibly to some regions of the Middle East, to the cultural unity which extends from Scotland to the edge of Asia, and which traditionally has been a source of strength and inspiration to us in this country as well as to our partners, being placed increasingly on a firmer basis politically, economically and financially.

3.40 p.m.

Lord BANKS

My Lords, I too am grateful to the noble Lord, Lord Trefgarne, for his clear exposition of both the purpose behind the Bill and the background to it. The sentiments which he expressed and those expressed by the noble Lord, Lord Goronwy-Roberts, about Greek accession will, I am sure, find an echo throughout the whole House. As we welcome the Bill, we naturally recall the links over the years between the British and Greek people, for example the part played by Byron in the struggle for Greek independence. And perhaps it is appropriate that someone from these Benches should say a word of welcome for the Bill because in this month of November 1979 we celebrate the one hundredth anniversary of Gladstone's great Midlothian campaign, and Glad- stone was a British statesman who was highly regarded in Greece and whose policies were well applauded in that country. On the occasion of his political jubilee in 1882 he received a message of congratulation from Greece and he replied in these terms: To have laboured within the measure of justice for the Greece of the future is one of my happiest political recollections, and to have been trained in a partial knowledge of the Greece of the past has largely contributed to whatever slender faculties I possess for serving my country or my kind". Today we think of that great Greek past during which democracy was born, and we think too of what we hope will be the great Greek future within the Community of democratic nations in Europe.

The Bill is, as Lord Trefgarne said, short, but behind it lies a complex treaty and we can touch on only one or two of the main issues today which that treaty raises. It is, as the noble Lord pointed out, the culmination of the association agreement concluded in 1961 and which always had as its eventual aim Greek membership. It is of course difficult to separate the accession of Greece from the accession of Spain and Portugal, to which the two noble Lords who have spoken have already referred. Although these matters are not dependent on each other, we are obliged to relate them in our consideration of the overall impact.

The European Economic Community at the moment covers 75 per cent. of the population of Western Europe. Once Greece, Spain and Portugal have joined it will cover 91 per cent. of the population of Western Europe, and I am sure it is right that all free and democratic countries in Europe should be able to join. The three applicant countries have recently emerged from varying periods of totalitarian rule and they believe, and we believe, that by being linked closely with the other democratic nations in the European Community, a repetition of that experience is less likely.

The overwhelming reason for the accession of the three new members to the Community is a political reason. Without that overwhelming reason—for I believe it is overwhelming—there would be hesitation because, as the two noble Lords have pointed out, enlargement raises considerable problems—economic, political, administrative and institutional. The three new members add 21 per cent. to the population of the Community, but they add 57 per cent. to those working in agriculture; that is another aspect of the problem which the noble Lord, Lord Goronwy-Roberts, outlined to us. The whole question of the application of the Common Agricultural Policy to Mediterranean produce—again touched on by Lord Goronwy-Roberts—and the relations of the Community with the rest of the Mediterranean area (with other countries in the Mediterranean area with whom we have association agreements) is all problematical; we cannot see exactly how it will develop and what the impact of the one on the other will be.

Then again, how will Greek industry stand up to the increasing competition during the transitional period? And how will the balance-of-payments position of the applicant countries be affected? Posting these questions brings me to the question of aid. We are bringing into the Community, as has been pointed out, three countries whose standards of living for the moment are, generally speaking, lower than the rest of the Community's. This would seem to call for a considerable redistribution of resources; and what will be the impact of that on the United Kingdom, Ireland and Italy if the social and regional funds are, as Lord Trefgarne said, spread more thinly over the Community as a whole? The case for a substantial increase in regional and social funds is greatly strengthened by enlargement.

The British Council of the European Movement approved on Saturday a policy statement which calls for a Community budget enlarged to 2½ per cent. of gross national product along the lines recommended by the MacDougall Committee as a means of transferring to the Community certain national responsibilities, thus increasing the Community share of public expenditure and achieving greater equity in the use of Community resources. That statement also calls for adequate increases in the Community budget to meet the requirements of new members without major loss to existing recipients of regional aid and development finance, and today I urge the Government to endorse that policy.

The political problems raised by our relationship with Turkey were referred to by the noble Lord, Lord Goronwy-Roberts, and it is clear that it is in the interests of the Community to secure at the earliest possible time the maximum degree of reconciliation between Greece and Turkey, which would include dealing with the very difficult problem of Cyprus. But it may be that our relations with Turkey are at a critical point and Turkey may feel that she must decide whether her long-term future is with the West or whether she must look Eastwards. Considerable statesmanship on the part of the West will be required to deal with this situation, but I was glad that Lord Trefgarne spoke about the possibility of a fresh impetus in the efforts to take our relations with Turkey a stage further.

Finally a comment about the institutional problems. We on these Benches are very concerned about the effect of enlargement on the decision-making process. We have seen enlargement welcomed by some as a means of securing a looser association of States weakening the community nature of the present structure. We hope that will not come about. It seems to us that a decision-making process which allows more scope to national Governments is likely to be even less satisfactory than the present practice. We complain in this country, and rightly, about food surpluses, but it was the Commission which wanted to freeze prices and the national governments which would not let them, and last week it was the European Parliament which wanted to reduce subsidies to milk producers and the national Governments in the Council of Ministers which rejected that.

I was particularly interested in what Lord Goronwy-Roberts said about this subject today and welcome the fact that he gave support for a greater use of majority voting even while, in the ultimate, for matters of really vital national concern the veto is still retained. We on these Benches very much hope that the Government will not allow enlargement to become an excuse for a looser and less effective Community where coherent and sustained communitarian policies will have less chance of acceptance. The future with a Community of 12 will not be easy, but the task of linking 12 demo- cratic nations ever more closely together is a vitally important one, and an important point will have been reached in that process on 1st January 1981 with the welcome accession of Greece.

3.49 p.m.

Lord BETHELL

My Lords, the last occasion on which we in this House held a debate exclusively devoted to Greece was, I believe, on 15th February 1973, more than six and a half years ago, when we discussed the fact that Greece was in the hands of a military junta, and those of us who spoke expressed the hope, first put into words by the then Minister, Lady Tweedsmuir, that Greece would very soon be restored to democracy. At that time we could not know how soon that happy event would come to pass. Little more than a year later Greece was again a democratic State, and it was no coincidence that it was Europe that put perhaps the greatest pressure on Greece to bring her institutions back to democratic process. It was the European Community, by freezing her relations with Greece, and the Council of Europe, by suspending Greece's membership, that made many thinking Greeks on the fringe of junta circles realise that without this link Greece really had no way forward in the international arena.

Again, it was no coincidence that as soon as Greece once more became democratic almost her first international act was to apply for membership of the Community. It was with great happiness and pride that early in 1975 I was able to become a member of the Joint European Parliament/Greek Parliament Committee that advised on negotiations for Greek entry. Therefore I give a particular welcome now to the fact that in the six and a half years from the time that we debated Greece's continued retention in the hands of a military junta to her forthcoming accession we have made this particular very gratifying and happy step.

I am not of course minimising the problems that will be faced by Greece's entry and by enlargement in general. They have been pointed out by the noble Lord, Lord Goronwy-Roberts, and by other noble Lords who have spoken. Enlargement will, I think, make it fairly clear that in the long-term at least the great problems that beset this country in Europe are not to be solved by expansion of the Regional and Social Fund. Also, the expansion of agriculture and the Common Agricultural Policy to include Mediterranean products will put added strains on the Common Agricultural Policy; but perhaps this will be a good thing. Perhaps the fact that we have to turn our minds to a total reappraisal of the CAP, through enlargement, will enable some of those very necessary reforms to be considered. At least enlargement enables us, forces us, to concentrate our minds on the CAP and to consider how it must be changed.

There are of course many reasons why one could pick holes in the whole idea of Greece's accession. Many of them were mentioned in another place a few days ago. But I have always felt that these arguments are very small compared with the overriding political imperative of allowing Greece, Spain, and Portugal to join the Community in order to consolidate the recently established democracies in those countries. There really seems to me to be no political alternative to enlargement, to the accession of these three new democracies. One might just as well let them go as refuse them entry into the Community. I therefore believe that there will be a unanimous approval by your Lordships of a Second Reading for the Bill, and I very much hope that it will become law in the very near future.

Of course the short-term effects of it will by no means all be on the negative side. I must say that I look forward to the entry of another new Member into the Community, because in the European Parliament, and in your Lordships' House, I find that more and more it is the new Members of the Community who find that they have matters and interests in common, and I predict that we shall be working very closely with our Greek colleagues after the beginning of 1981 to secure necessary reforms in the way the treaty is being implemented at the moment.

The arrival of Greece will strengthen those of us who challenge the idea that the treaty, and the way that it has been implemented, is Holy Writ and not to be in any way challenged or amended. It will support those of us who believe that the Community is in a continuing state of evolution, that its written constitution is there as a guide and not as a law of the Medes and the Persians. I believe that the arrival of Greece will make this argument all the stronger and will help those of us in the European Parliament who, by making amendments in the budget, are trying to rectify the absurd imbalance in favour of agricultural products and milk products in particular. I trust that when we come to attempt to rectify some of these imbalances in the Parliament we shall have the support of the British Government, the British element in the Council of Ministers on those occasions when the merits of the case demand it, and not, as seems to have happened a few days ago, have our recommendations, indeed our amendments, turned down purely as a matter of principle.

Another area where I hope we shall find common interest with Greece is that we, Britain, and Greece will be on the periphery of the Community and we will have certain common interests in developing an imaginative transport policy. Of course we in Britain are anxious to develop through Europe a Channel link. In Greece, I know, they are concerned through Europe to improve communications by sea and overland by an arrangement with Yugoslavia to help them to transport their goods to the centre of the Community. I believe that it is in the spirit of Europe that special facilities—funding—should be available to areas on the periphery of the Community to enable them to compete effectively and fairly in a Common Market. This is something that we in Britain and in other peripheral countries—Ireland, Denmark, which also, incidentally, happen to be new Member States—will be discussing with our new Greek colleagues when they join us.

I should like to end on a note of a certain emotion. Greece is the cradle of democracy, the inventor of the word "democracy". We in this House are part of the Mother of Parliaments. I very much hope that this Parliament, the British Parliament, will be the first to ratify the Greek Accession Bill. It has already been passed by the Greek Parliament. So far as I know no other Member State has passed it, and I believe that it would be extremely appropriate if we, our Parliament, were the first to ratify the accession Bill and to establish the idea that Greece should join in making our Ten. It would be an extremely desirable, appropriate act, and one which I very much hope will come about.

3.59 p.m.

Lord MONSON

My Lords, we have heard speeches of great optimism and idealism both in this House today and in the other place earlier this month on the subject of this Bill; though I was pleased to hear the noble Lord, Lord Trefgarne, sound a note of caution. When idealism is in the air one is always highly reluctant to break the spell; indeed, one is highly reluctant at any time to belittle idealism. After all, my own continuing opposition to Britain's membership of the EEC was, and is, based first and foremost on idealism, notwithstanding that it is reinforced and boosted by what I believe to be hard, practical considerations.

Having made that qualification, some of the enthusiasm that we see for enlargement of the EEC reminds me of nothing so much as the single-minded faith of the clean-limbed, fresh-faced young subaltern going over the top in 1914, armed with nothing more lethal than a riding crop against the German machine-guns. Wholly admirable though the faith of such men must have seemed at the time, by all accounts it had generally turned to cynicism and bitter disillusionment among those few who survived by 1918. I do not suppose this bitter disillusionment would have been so profound if someone had stuck his neck out at the time and tried to sound a more sceptical, or even cynical, note. I see it as my function this afternoon to try to put, however imperfectly and clumsily, the case for a more sceptical approach. Incidentally, I believe that the British people as a whole have mentally reached the late 1915 stage, or even the early 1916 stage, in their attitudes to the Common Market, in terms of my analogy; but there are still many at the pinnacles of power in this country who seem to retain the unsullied enthusiasm of 1914; though how they can do so after witnessing the distasteful horse-trading, the pork-barrel and gravy-train politics, and the bureaucratic nit-picking over petty harmonisation, and so on, I find hard to understand.

My Lords, I am not nearly as familiar with Greece as are other noble Lords. The fact is that I know Turkey and the Turks very much better than I know Greece and the Greeks; but that is not to say that I lack sympathy for Greece—far from it. In fact, I am just as lukewarm about the idea of Turkey, and, indeed, Spain and Portugal, entering the EEC in the foreseeable future as I am about Greek accession. The reason for my disquiet is fairly simple, and I should add that my apprehensions seem to be shared by a number of honourable Members on both the Labour and the Conservative Benches in another place. Accession may possibly do Greece some good, though many Greeks, including some distinguished economists, think otherwise, and oppose membership. What seems certain is that it is most unlikely to do the industrialised countries of Northern Europe any good, or at any rate those of them which are within the EEC.

An honourable Member in another place who was an enthusiast for this Bill, an enthusiast for Greek membership, had to concede in another place that we shall have to face adverse economic consequence as a result of Greek entry; and, referring to Spain and Portugal as well as to Greece, he said that the accession of these countries whose economies are less powerful than our own will have a further de-stabilising influence on Community development. He added that accession will probably have major effects which have not yet been fully thought through by this country or the Community.

Lord TREFGARNE

My Lords, I think the noble Lord is referring to Hansard. Can he indicate the column?

Lord MONSON

My Lords, I think I am not permitted to quote directly from Hansard when referring to a Back-Bencher's speech. I believe that is so. My Lords, as one of the EEC Commissioners pointed out recently, enlargement of the Community will increase its population by 20 per cent. and the number of farmers by fully 50 per cent., but the gross national product will rise by only 10 per cent. The burden will fall particularly heavily on countries like Britain. It is too readily assumed, I think, that Western Germany will shoulder most of the burden. It is true that Western Germany's economic performance continues to be remarkable. They have recently predicted a real increase in their gross national product for 1980 of 2.75 per cent., as opposed to 4 per cent. this year, which is truly astounding in view of the pending world economic recession. But, given their relative lack of self-sufficiency in energy, I wonder whether this can continue for ever. Furthermore, I have always believed that lingering German war guilt has induced the Germans to shoulder rather more of the burden of the EEC than might otherwise be the case. We cannot count on this residual guilt continuing for ever.

One rather sanguine retort to this is that enlargement of the Community will help to bring things to a head so that the CAP will collapse under the weight of its own inherent contradictions, and I think the noble Lord, Lord Bethell, touched upon this. I simply do not believe that that would happen. There are too many votes, and particularly too many domestic votes, that would be at stake. Again, one has only to look at West Germany, where recently Chancellor Schmidt was prevented from taking any action on the CAP because his Free Democrat coalition partners were terrified of losing the farmers' vote. And it is worth noting that if enlargement had already taken place Mrs. Thatcher would have 11 rather than 8 countries ranged against her at Dublin.

My Lords, a number of honourable Members on the Labour Benches in another place mentioned the threat to our textile industry. I should also like to suggest that to give free and unhibited access to Britain to a greater and greater number of people makes an absolute nonsense of Mr. Whitelaw's proposals for restricting immigration, well-intentioned as these proposals are in terms of fulfilling Conservative election promises. It has also been suggested that democracy in the respective member countries will be strengthened in some undefined way by joining the EEC. I find this unconvincing, and I would submit that it is far more important and urgent to strengthen NATO than to enlarge the EEC, because unless NATO is sufficiently strong there will soon be no chance for democracy anywhere in Europe.

One honourable Member in another place gave as one reason for his passionate support for Greek accession the prediction that this will lead to a new atmosphere of deepening friendship between ourselves and Greece. My Lords, I do not see the logic of that. Do the British people actually like our EEC partners, the West Germans, better than they like the Austrians? Do they like the Danes better than the Norwegians, the Italians better than the Spaniards? I see no evidence for this. Can we really put our hands on our hearts and say that the British and the French like each other better than they did 20 years ago? I would have thought that possibly the reverse was the case. It is my view that friendship between peoples has nothing to do with common membership of institutions such as the EEC. Indeed, in my view common membership can militate against friendship, given the national rivalries, the jealousies and the squabbling inherent in any such organisation.

Leading on from this, I wish to say that my reservations about this Bill—I will not say my opposition, because I certainly do not intend to oppose it, but my reservations about it—do not imply, and certainly are not meant to imply, that I have any less esteem for the Greek people than do those noble Lords who take the opposite view from myself about the merits of the Bill. I should like to conclude by saying that I shall be delighted if my pessimism turns out to be misplaced, but I fear that it probably will not be.

4.9 p.m.

Lord CAMPBELL of CROY

My Lords, I thank my noble friend for introducing this Bill, and I warmly welcome the accession of Greece to the EEC. I applaud the conclusion of the accession agreement. I feel a sense of history, not only because Greece was the source of European civilisation over 2,000 years ago, but also because of very recent history. Greece was the first European country to become an associate member of the EEC through the agreement of 1962, though that was suspended, as my noble friend reminded us, between 1967 and 1974. Then, it was a year after that that the Greeks applied for full membership.

It is clear that Greece will value her membership as a buttress for political stability. For example, the Greeks believe that there could not be a coup setting up a totalitarian régime if they are members of the EEC. Membership is not a guarantee against that kind of thing happening: none the less, it is clear that the Greeks themselves believe that membership will make it very much less likely and it is also clear to me that such an event will be very much less likely. We must consider, too, as some speakers already have considered, the proposed and impending membership of Spain and Portugal. Similar situations will arise. They, too, have fragile democratic systems of fairly recent birth. I believe that they, too, will be strengthened by membership. In these circumstances, the response from the members of the EEC to the applications could not be anything hut, "Yes, in principle". That could be described as a political decision subject to practical arrangements on trade, agriculture, and special problems.

There are serious problems for both Greece and the existing members of the EEC arising from Greece's proposed membership. Similar problems there will be also when the other two applicant countries become members. I understand (in the same way as my noble friend Lord Bethell understands) that the United Kingdom has been the first of the Nine to be ratifying the Greek Treaty of Accession. I should like my noble friend in his reply to confirm, if he can, whether we are still on course to being the first. I believe that that would be significant and, as he indicated, I should like, too, to feel that we were the first of the Nine to ratify.

The problems of the accession of Greece to the EEC are likely to be repeated to a greater or lesser extent by the other two countries when they come to be considered. This House's Select Committee on Europe produced in March last year the report on enlargement. Everything in that report still applies, I believe, to the situations of the three applicant countries. I had the privilege of serving on the sub-committee which prepared that report under the able and invigorating chairmanship of the noble Lord, Lord Trevelyan. He cannot be with us today because he is still recovering from illness, but I am sure that noble Lords will join me in hoping that he will be restored to full health and with us again soon. That report mentions various changes required in the institutions of the EEC. I shall not dilate upon that. More recently the Spierenberg report on institutional adjustments has been published—for example, the question whether in future, with 12 members, the Commissioner system should be changed so that each country simply has one. I draw attention to the need for careful consideration of these matters and decisions in due course.

My Lords, I should like to turn to the practical effects of the membership of Greece upon the economy of this country and to divide those effects into two parts. First, there is the general one concerning the budget, with which must be linked agriculture; and, secondly, trade in certain goods, particularly textiles. The United Kingdom will be paying a certain price in return for the political benefits which I have outlined. This price should be examined and made known. I suggest that we as a country ought to be accorded the credit for what we are accepting in the interests of democratic government in Europe. The agreement with Greece provides for a five-year transitional period and for a seven-year period for certain sensitive subjects. There is also a special mechanism incorporated to ensure that during the transitional periods Greece is a beneficiary and not a net contributor to the EEC budget.

I understand these problems particularly well because I happened to be a member of the British Cabinet during the 1970–72 negotiations and was myself involved with some of the most sensitive subjects. I can understand completely the position of Ministers in the applicant countries who have had to ask for transitional arrangements over a period and, naturally, have been very concerned about the effects upon their domestic industries. I was glad to hear the estimate which has been made of £65 million a year cost to the United Kingdom at the end of the transitional period repeated again today by my noble friend as the Government's estimate. It is clear that we shall be contributing that amount of money annually at that time, on present assumptions, to the membership of Greece; and undoubtedly there will be similar contributions for Spain and Portugal in due course. It is important that this should be borne in mind in Dublin later this week when the United Kingdom will be engaged in trying to reduce the excessive and disproportionate contribution that the United Kingdom is already making as a whole to the EEC budget.

I turn to agriculture. The Common Agricultural Policy means that the United Kingdom makes a heavy net contribution. This is largely because the proportion of the budget devoted to agriculture has increased to about 70 per cent. whereas some years ago it was expected to remain at about 40 per cent. Secondly, it is caused because in Britain we have a mechanised, up-to-date farming industry and we have been having to support small, part-time, uneconomic farming within the EEC. A small percentage of our work force is involved nowadays in agriculture and that is because agriculture in Britain is a modern industry. Where Greece is concerned, I think that the latest count was taken in 1975, when 35 per cent. of the workforce was in agriculture. And there are high percentages too for Portugal and Spain, as the noble Lord, Lord Goronwy-Roberts, indicated. Italy and Southern France will feel the direct competition in Mediterranean agricultural produce. We shall not feel that, but we shall feel the budgetary effects of these rural economies, less advanced than ours, being added to the EEC.

These three new countries will also undoubtedly have first-priority calls on the regional fund and the social fund. Hitherto, the United Kingdom has sought to set off what we lost on the agricultural swings by gains on the social and regional funds roundabouts. In a few years' time, after the addition of the three new countries the United Kingdom could well be a net contributor rather than a beneficiary (as we now are) where these two funds together are concerned.

My Lords, we are willing to contribute in help to additional membership. Considering the finances of the EEC as a whole, however, there is a limit to our ability to be altruistic both towards the present Members of the EEC and the three prospective Members. I am sure that my right honourable friend the Prime Minister will leave the Dublin conference in absolutely no doubt about that.

I should like to draw attention to some of the effects on trade and the difficulties for certain of our industries. Under the agreement on associate membership, Greece had certain reciprocal duty-free arrangements within the Community. The transitional periods, now to start at the beginning of 1981, will seek to reduce the customs barriers by stages and also to align Greece's arrangements with the common external tariff. One industry which will be highly vulnerable is the United Kingdom textile industry. A rapid rise in imports of cotton yarn from Greece into the EEC could cause very serious problems. There is the safeguard clause in the Treaty of Accession to which my noble friend has referred. Another remedy is that special arrangements should be negotiated with Greece. The safeguard clause may be necessary in an emergency; but I suggest that the second remedy—arrangements to be negotiated—would be helpful in any event to be available to protect our textile and clothing industry.

There was a debate on this subject in this House on 12th July. The basis of that was another report, on textiles, from the Lord's Select Committee on Europe. Red books in recent years have become quite well known on various subjects, though not without controversy. Your Lordships' House introducing these red books since we became members of the EEC in 1973, has produced a very high quality series of documents.

The dangers for the textile industry where Greece is concerned also apply particularly in the case of Portugal. Fair competition is what the United Kingdom industry hopes will come about. We should not allow a distortion of normal competition by retention of special aids from the State—aids which are not normally accepted within the EEC. Further, I would draw attention to Protocol 7 in the Treaty of Accession. It is similar to a provision in the Treaty for the Republic of Ireland, when Ireland joined the EEC. In the Irish case, very generous investment incentives and tax concessions were made available to third parties—that is to say, nationals from countries which were not members of the EEC, who were then able to establish new industrial capacity in Ireland. With this special aid, that new industry was able to compete—we thought unfairly—and cause serious damage to the United Kingdom textile industry. I hope that my noble friend today can give an assurance that the United Kingdom will intervene to ensure that this will not be allowed to happen in the case of Greece, Portugal or Spain.

As for trade in each direction, my noble friend Lord Trefgarne was optimistic. He spoke of the opportunities available in the Greek market; he thought that the balance would be favourable. I hope that he will be right and I would certainly urge British industry to adapt as required and to lose no time in exploring the Greek market's opportunities. I have frankly stated some of the difficulties; they must be identified and tackled. I end as I started, by giving a warm welcome to Greece as a closer partner with us in Europe.

4.23 p.m.

Lord TREFGARNE

My Lords, with but one exception I find heartening support in the House this evening for the Greek accession which we have been discussing. We are all generally agreed that while we must not underestimate the economic and technical difficulties, these are outweighed by the powerful political case in favour of Greek accession, and indeed enlargement as a whole. May I try to deal as best I can with some of the many points that have been raised this evening. I apologise to noble Lords in advance if some contribution fails to attract my attention; but I promise to study Hansard with care and take up any other points in correspondence later.

The noble Lord, Lord Goronwy-Roberts, speaking from the Opposition Dispatch Box, welcomed politically this Bill, as almost all noble Lords have done, and referred to Greece's significant progress in terms of democracy and human rights. It might be helpful if I commented further on that by saying that it is stipulated in the Treaty of Accession in Article 3 that Greece will be bound by declarations concerning the Communities adopted by the Member States. I refer to their declarations on democracy and other matters. These include the declaration on democracy of December 1977 which affirms the Member States' determination: to safeguard the principles of representative democracy, of the rule of law, of social justice and of respect for human rights". Speaking of human rights, I must confess that I was expecting noble Lords opposite to raise the question of trade unions' rights. That would be very proper. It is of course the case that there is no comprehensive Community legislation on labour relations and trade unions. I am aware that Greek law is, in a few respects, out of line with general practice in the countries of the Nine. Your Lordships will wish to know that Greece has accepted the key ILO Conventions, and has agreed to be bound by Community legislation, such as it is.

I should also like to thank the noble Lord, Lord Goronwy-Roberts, for his very clear support of the stand which my right honourable friend the Prime Minister and my noble friend the Foreign Secretary will be taking at Dublin at the end of this week on the vexed question of the British contribution to the EEC budget. We very much welcome that support, and I hope and believe that my right honourable and noble friends will be successful.

May I now come to the question of textiles, a matter which has been raised by almost every noble Lord who has spoken this evening. As I said in my opening remarks, there is no doubt that competition from Greek textiles will increase. I am afraid that this is an inevitable result of Greek accession. But as I also said, the Treaty of Accession contains a safeguard clause which will operate during the transitional period and this will permit the Commission to authorise a Member State to take protective measures in cases of serious difficulty which arise not only in textiles but in any other sector. The article in question, as the noble Lord, Lord Goronwy-Roberts, pointed out is Article 130 of the treaty.

Lord GORONWY-ROBERTS

My Lords, I hesitate to interfere with a very good speech, but I am encouraged to do so by what the noble Lord has just said. I join with the noble Lord, Lord Campbell of Croy, in once more hoping that the application of the general safeguards article will be made if the situation warrants it. In the meantime, my understanding is that it has up to now been possible for us to have a voluntary bilateral arrangement for the restriction of exports from Greece to this country. Am I right in assuming that, on the assumption of full membership, that will no longer be permitted? I hope that I am wrong. The noble Lord may perhaps be able to answer now, or he may prefer to take the question to his colleagues. I put the question for this reason: If it is found that we do not wish or do not need to have recourse to Article 130 on general safeguards, is it possible for us to continue what I understand to be now possible—namely, to have an arrangement for voluntary restriction of exports of certain sensitive goods to this country?

Lord TREFGARNE

My Lords, it is always possible for Greece to enter into a voluntary arrangement on their own, bilaterally I suppose. However, the present position is that there is indeed a voluntary restraint agreement in force. This agreement will not continue beyond Greek accession on 1st January, 1981. After that time, we shall be obliged to rely upon the safeguard provision of Article 130. I am not sure whether that satisfies the noble Lord, but I think that is the position.

Lord GORONWY-ROBERTS

My Lords, it makes my point that if the present possibility of voluntary restriction falls away after 1st January, 1981, therefore the point so powerfully made by the noble Lord, Lord Campbell of Croy, and others, about this Government and successive Governments really having recourse to Article 130 is so much more strengthened as the only alternative.

Lord TREFGARNE

My Lords, I think the noble Lord is right when he says that thus far Article 130, or its equivalent in other treaties, and certainly in the Irish treaty, to which the noble Lord, Lord Campbell of Croy, referred, has been used only rarely, if at all. But it is there in the treaty for Greece, and we shall use it if we have to.

The noble Lords, Lord Goronwy-Roberts, and Lord Banks, referred to the question of reforms of the voting procedure in the Council of Ministers. There has been a suggestion that decisions might be reached on a majority basis rather than providing for a virtually unanimous system, as is at present the case. But where a Member State has very important interests at stake, we believe these must be safeguarded. Subject to that qualification, we are prepared to consider ideas, whether put forward by the "Three Wise Men" to whom I referred, or others, to facilitate decision-making in the Council. The same procedures would not necessarily be suitable for all subjects in the Council. If a Member State has particular difficulties because of political parliamentary sensitivities, then these should be accepted.

The noble Lord, Lord Banks, and others referred to the need to consider the size of the regional and social funds. We certainly note the imbalance between the size of the agricultural budget, for example, and these funds. We certainly think that imbalance ought to be corrected. We would not want to be more specific at this point, because we are of course talking about the reform of the budgetary procedures in general in the Community and these matters will no doubt come up in those discussions.

Again, several noble Lords referred to possible Greek benefit from membership. The noble Lord, Lord Monson, was particularly sceptical about the advantages to Greece of joining the Community; but I think we must do the Greek Government the courtesy at least of assuming that they have done their sums. I suspect that in any case the fears of Greece being harmed by membership are misplaced. Greece will benefit considerably from the CAP and the regional fund and will probably attract a good deal of investment. Greek food prices are in many instances already close to Community levels and others will only be increased gradually over the transitional period. As for industry, about two-thirds of the Community exports to Greece already enter duty free. I referred in the same vein during my original speech to the benefits to the United Kingdom economy of Greek accession to the Community.

The noble Lord, Lord Bethell, and also the noble Lord, Lord Campbell of Croy, asked me to give an assurance that the British Government would be the first to ratify this treaty. This is not, I think, a political race, but I can say that we are keen to ratify as soon as possible and we shall do so as soon as we have completed all the parliamentary procedures. We imagine this will be early in the new year. I believe there are other members of the Community who may be in a position to ratify at about the same time, so I cannot promise that we shall be precisely the first, but I hope we shall be among the first.

In conclusion, I think there is little doubt that your Lordships warmly welcome the prospect of Greek entry into the Community. Absorption of the new 10th member and later of the 11th and 12th members will not be easy and there are bound to be some strains of adjustment. Care will be needed to ensure that enlargement does not weaken the institutional foundations of the Community, but the political justification for Greek entry into the Community, and also for that of Portugal and Spain, is truly overwhelming.

On Question, Bill read 2a, and committed to a Committee of the Whole House.