Sitting of 26 July 1971

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TRADE AND INDUSTRY

    Electronics Industry (Redundancies)
    Mr. William Hamiltonasked the Secretary of State for Trade and Industry if he is aware of the difficulties created by repeated redundancies in the electronics industry in Scotland and in other parts of the United Kingdom; and if he will institute an inquiry into ways and means of creating new jobs.
    The Minister for Aerospace (Mr. Frederick Corfield): I am aware of redundancies declared by a number of companies in the electronics industry. As to the second part of the hon. Member's question, my right hon. Friend the Chan-
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    cellor of the Exchequer announced measures on 19th July which are designed to have this effect.
    Mr. Hamilton: Does not the Minister recognise that this industry was one of the hopes for the future of Scotland, and of my area of Fife in particular, and that these repeated redundancies are causing great concern? Will he look carefully at the G.E.C.-Marconi project in Glenrothes, where, I believe, there is a lot of evidence to suggest that not only is there dumping of United States-manufactured components from abroad but there are bad industrial relations contributing to the problem?
    Mr. Corfield: I am very much aware of the importance of this industry to Scotland and to the areas which the hon. Gentleman mentions. I have looked carefully into the question of dumping. I can find no evidence of it in its legal sense, and I am reluctant to advise protection for an industry which is greatly dependent on exports and, therefore, very vulnerable to counter-action.
    Mr. Benn: Is the right hon. Gentleman talking to the international companies involved to find out the motivation for some of these redundancies?
    Mr. Corfield: I think that the motivation is fairly clear. There is an almost worldwide reduction in demand for the products of this industry. I am discussing certain aspects of it with the companies concerned.

    Gas (Conversion of Appliances)
    Mr. Thomas Coxasked the Secretary of State for Trade and Industry if he will list the statutory provisions which require gas boards to bear the cost of converting appliances to natural gas; and what rights of appeal the public have against their decisions.
    The Minister for Industry (Sir John Eden): Section 18 of the Third Schedule to the Gas Act, 1948 requires the gas boards to bear the cost of altering or replacing burners on consumers' appliances where necessary when the calorific value of gas is changed. Consumers who disagree with a board's decision can make representations to the appropriate consultative council.
    Mr. Cox: I note that reply and thank the Minister for his courtesy in the correspondence which we have had on the matter. However, in view of the widespread criticism being expressed throughout the country arising from the difficulties of conversion to natural gas and, in particular, the very real problems faced by many elderly people in having to buy new gas heating appliances so as to ensure that they have some heating facilities, is it not time that the Minister sought consultation with the appropriate gas boards in an attempt to overcome the problems which so many people are experiencing?
    Sir J. Eden: I understand the anxieties to which the hon. Gentleman has given expression, but I am equally aware that the gas boards themselves are most concerned to see, wherever possible, not only that individual consumers' interests are met but that full safety precautions are adhered to. The difficulties seem to arise chiefly in connection with ventilation.
    Sir G. Nabarro: But will my hon. Friend bear in mind that, whereas we all warmly support this important development of natural gas from the North Sea, which is economically so valuable and desirable, the complaints are not confined to industrial and urban areas? Does he know that in South and West Worcestershire, for example, there is a perfect cascade of complaints from all sections of the community who have had their appliances converted, that Members of Parliament are powerless to deal with
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    them, and that there are inordinate delays in putting matters right?
    Sir J. Eden: I have found in the past that, where the sort of situation my hon. Friend describes has arisen, the gas boards go out of their way to try to meet consumers' representatives in order to deal with matters on the spot. If my hon. Friend cares to give me particulars of a case in point, I shall be only too happy to pursue it further with the gas board concerned.
    Mr. Greville Jannerasked the Secretary of State for Trade and Industry how many and what percentage of household gas cookers have now been ocnverted to natural gas without complaints; how many service or repairs calls had to be made because of complaints; what is the average delay between the date of complaint and the date when the appliance is in satisfactory working order; and how many such complaints were awaiting attention at the last available date.
    Sir J. Eden: The Chairman of the Gas Council is already writing to the hon. Member and I am asking him to deal with these additional points.
    Mr. Janner: Is the Minister aware that the Chairman of the Gas Council has not written, and that in any event there is enormous dissatisfaction among housewives all over the country about the effects of conversion to natural gas, the manner of the conversion and the way in which they have been treated? Does he think it right for the Government to take no responsibility in the matter and simply to pass it over to the Gas Council?
    Sir J. Eden: Conversion is carried out by the gas boards. While I in no way minimise the concern to which hon. Members are giving expression, we should bear in mind that large numbers of appliances are being converted, and that as conversion is progressing the rate of call-back has fallen considerably.
    Mr. Scott-Hopkins: Does my hon. Friend agree that it is a question of compensation? Many cookers and heaters break down after they have been converted, and there is great difficulty in obtaining compensation from the gas board concerned. In many cases the

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    appliances cannot be used, and elderly people are having great difficulty in finding the money required to replace them.
    Sir J. Eden: Some of the appliances are extremely old, and their age in itself constitutes a bit of a danger. Therefore, people would be much better advised to invest in new appliances or second-hand converted appliances which are available on preferential terms. It is in their own interests to do so.

    European Economic Community
    Mr. Redmondasked the Secretary of State for Trade and Industry what representations from trade unions in the Six he has received about Great Britain's entry into the European Economic Community.
    The Minister for Trade (Mr. Michael Noble): None, Sir.
    Mr. Redmond: That is a rather disappointing answer, though not unexpected. Could my right hon. Friend tell us what was the attitude of the trade unions within the Six before the Treaty of Rome was signed, and what is their attitude now? I ask this in view of the apparently official opposition to our entry which comes from the Trades Union Congress.
    Mr. Noble: The best I can tell my hon. Friend is their attitude now, which I am glad to say, is very much in favour of both British entry and the situation within the E.E.C. I have no information on what the situation was before they joined.
    Mr. Kaufman: Will the right hon. Gentleman consult trade unions in Commonwealth countries about their attitude towards British entry, or are the Government, in their headlong rush to join the Community, no longer interested in the views of the Commonwealth?
    Mr. Noble: I shall be only too delighted to discuss these problems with trade union leaders anywhere in the world where I happen to be. I was in Canada, and in the coming months I shall be in Australia and New Zealand.
    Mr. Wilkinsonasked the Secretary of State for Trade and Industry what was the percentage change in British wool
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    textile exports to the European Economic Community by value between 1957 and 1969; and how this compares with the percentage change in wool textile exports to the European Free Trade Association in the same period.
    Mr. Noble: Decreases of 44 per cent. and 4 per cent., respectively.
    Mr. Wilkinson: I thank my right hon. Friend for that reply. Does not he agree that this shows the importance of our having preferential tariffs for such an important industry and that, when tariffs against British wool exports into the E.E.C. go down, there will be extremely large opportunities for this industry—our sixth most major exporting industry?
    Mr. Noble: My hon. Friend, who has great knowledge of the wool textile industry, is perfectly correct. There is a 13 per cent. C.E.T. on wool cloth and the industry is looking forward to the tariff being diminished because there are great opportunities for it within the E.E.C.
    Mr. Carterasked the Secretary of State for Trade and Industry if he will seek at the next meeting of the National Economic and Development Council to obtain from industry their assessments of the effects on themselves of entry into the European Economic Community.
    The Secretary of State for Trade and Industry (Mr. John Davies): Agenda for meetings of the National Economic Development Council are decided by my right hon. Friend the Chancellor of the Exchequer in consultation with other members of the Council. Industry is already actively engaged on assessing for itself the effects of entry.
    Mr. Carter: Is the right hon. Gentleman aware that that is an extremely pathetic answer? [HON. MEMBERS: "Pathetic or prophetic?"] Pathetic, although equally prophetic. Is the right hon. Gentleman further aware that while the White Paper spells out in great detail the cost to Britain should we enter the Community, it says nothing about the possible benefits that we might get? If, as the Government say, our future is going to be so rosy if we get in, why cannot a value be put on these supposed benefits? Is not the right hon. Gentleman aware that our people will not easily

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    forgive a Government who seek to lead them by the nose on such an important issue?
    Mr. Davies: If the National Economic Development Council takes this matter into consideration, it will no doubt reflect upon the matters which the hon. Gentleman mentioned.
    Mr. Wallasked the Secretary of State for Trade and Industry what is his latest estimate of the effect British entry into the European Economic Community will have on United Kingdom trade with South Africa; and if he will make a statement.
    Mr. Noble: It would be unprofitable to attempt any detailed forecasts but we expect South Africa to remain a major source of United Kingdom imports and a major market for our exports.
    Mr. Wall: Can my right hon. Friend say whether discussions have taken place or are to take place with the South African authorities so as to retain and expand this important British market?
    Mr. Noble: There has been a full exchange of information and views. We have discussed all the implications of that trade on a number of ocasions.
    Mr. Molloy: Will not the right hon. Gentleman agree that this Question goes wider than South Africa and that one of the most grievious omissions from Command Paper No. 4715 is any reasonable statement about the balance of trade which may take place if we join the Common Market, with special reference to the loss of trade with both our E.F.T.A. partners and the Commonwealth preference area? Should not this tremendous omission be filled in for the benefit of this House and the country?
    Mr. Speaker: Order. The hon. Gentleman is on a false premise. The Question does not go wider than South Africa.

    Brown Bayley Steels, Sheffield
    Mr. Duffyasked the Secretary of State for Trade and Industry what are the precise terms of reference he has given N. M. Rothschild, the merchant bankers, on inviting them to dispose of the major equity holding of the Industrial Reorganisation Corporation in Brown Bayley Steels, Sheffield.
    Mr. John Davies: In any disposal of my holding in Brown Bayley Steels, N. M. Rothschild and Sons will advise me in accordance with the terms of reference which I gave in reply to a Question by my hon. Friend the Member for Horsham (Mr. Hordern) on 8th July.—[Vol. 820, c. 442.]
    Mr. Duffy: Is the right hon. Gentleman aware that shop-floor feeling in Sheffield steel is already tense as a result of current reorganisation and that the further invasion of the public sector may very well bring it to flashpoint? Will the terms of reference to Rothschild eventually include a stipulation that a similar purchase price will be made available to other shareholders and other interested parties, such as the British Steel Corporation, and that the Corporation shall not be prevented from showing an interest? Does not he think that consultation might usefully begin at this stage by bringing in the board of Brown Bayley as well as workers' representatives to assure them that as a result of any ultimate disposal there will be no closures or redundancies such as are now occurring in Sheffield?
    Mr. Davies: I should stress that the advice of Messrs Rothschild to me is bascially on the financial aspects of the problem, not the industrial aspects. I shall be very much guided on the industrial problems by the advice given me by my Department and other interested parties, including the B.S.C. and private sector concerns. The hon. Gentleman may feel reassured that I shall take no action which does not seem to me industrially sensible.
    Sir G. Nabarroasked the Secretary of State far Trade and Industry whether he will seek Parliamentary approval for disposal of State-owned steel assets including Brown Bayley shares to be marketed by Rothschild's.
    Mr. John Davies: No, Sir, but where changes arising from my statement of 28th June result in such disposals the House will be informed.
    Sir G. Nabarro: Yes, but in that the House is not given an opportunity for debate. Will my right hon. Friend bear

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    in mind that when he used the very choice words "industrially sensible" a few moments ago, I endorsed what he said as regards all the bodies that he proposes to consult about the denationalisation of Brown Bayley and other similar undertakings? Will not it be possible for us to look at what my right hon. Friend is doing in the form of an affirmative Resolution presented to the House, so that we may criticise the process or the machinery for denationalisation, as is our democratic prerogative?
    Mr. Davies: No one will appreciate better than the hon. Gentleman—;
    Sir G. Nabarro: Than "my hon. Friend".
    Mr. Davies: —than my hon. Friend—how delicate are these matters of commercial negotiation. It would not be expedient or to the advantage of the public interest that these matters should be debated until such time as they have been negotiated. Therefore, they will be reported to the House. My hon. Friend will have every opportunity of venting his spleen upon these matters. But it will be after they have been negotiated.
    Mr. Michael Foot: Apparently the right hon. Gentleman thinks that a reporting to the House is sufficient and that it is not necessary to have a Resolution. When the National Coal Board Bill went through the House, his Government agreed to the proposition that there should be a Resolution. Why will not he apply the same rules to the steel industry?
    Mr. Davies: The same rules will apply to the steel industry as apply to the coal industry—namely, where the matter of a disposal is in accord with the management of the corporation concerned and where that corporation itself undertakes the negotiation, there will be a reporting to the House. That is as true for the steel industry as it is for the coal industry.

    RB211
    Mr. Walter Johnsonasked the Secretary of State for Trade and Industry if he is now in a position to make a statement on the Rolls-Royce RB211 engine.
    Mr. Whiteheadasked the Secretary of State for Trade and Industry if he will now make a statement about further financial guarantees for the RB211 engine.
    Mr. Scott-Hopkinsasked the Secretary of State for Trade and Industry what his intentions are for the future manufacture of the RB211; and if he will make a statement.
    Mr. Corfield: I expect to make a statement to the House before the Recess about the RB211 engine.
    Mr. Johnson: In view of the more hopeful signs from Washington, will the right hon. Gentleman now give an assurance that work will continue on the RB211 beyond 8th August even if the American Administration and Congress have not made a decision by 6th August, when they go into recess? Is he aware that leading members of the Nixon Administration have said that a firm order from B.E.A. would be very helpful during the concluding stages of the negotiations? Will he ask B.E.A. to take its finger out and place an order?
    Mr. Corfield: In regard to the immediate future, I have nothing to add to the answer my right hon. Friend gave on 14th June, that this will be a matter for consultation with the other parties to the contract with whom I am in touch. But I am convinced that a unilateral statement on behalf of Her Majesty's Government at present would not be in the interests of the object the hon. Gentleman has in mind.
    Mr. Whitehead: What communication has the right hon. Gentleman received from one of the largest potential purchasers of the aircraft, T.W.A., who have given a deadline of 15th August to the Congressional Committee which has been investigating the Lockheed guarantee? Has there been any approach to Rolls-Royce (1971) or the British Government?
    Mr. Corfieid: No, Sir.
    Mr. Scott-Hopkins: Will my right hon. Friend assure us that he will keep in the closest touch with the trade unions concerned in Derby and the suppliers, both of which groups have done everything they can to help the Government

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    help Rolls-Royce to keep going over these very difficult months?
    Mr. Corfield: If my hon. Friend has in mind the possibility of there being something further to add during the recess, I can assure him that I will make every effort to ensure that all Members concerned are personally informed.
    Mr. Rost: Although my right hon. Friend cannot make a statement at this stage, can he confirm my information that the technical development work on the RB211 at Derby has been making exceptionally good progress in recent weeks, as is the flight testing programme of TriStar? Is not that a most important development?
    Mr. Corfield: Yes, Sir. What my hon. Friend said in the first part of his supplementary question is indeed my understanding.

    Upper Clyde Shipbuilders
    Mr. Douglasasked the Secretary of State for Trade and Industry if he will make a statement on his policy as to the compatibility of the Government director on the board of Upper Clyde Shipbuilders Limited holding other directorships.
    Mr. John Davies: There is no Government director on the board of U.C.S. I am not aware that there were any circumstances which would have made the S.I.B. director's membership of the board of U.C.S. incompatible with other directorships held by him.
    Mr. Douglas: While I accept the right hon. Gentleman's correct description of the position of the director involved, will not he concede that the fact that the board of Yarrow & Co. had in effect two directors at a particular time on the board of U.C.S. might have led to undue influence in regard to information about Yarrow & Co.'s affairs being conveyed to the board of U.C.S., and, through the Shipbuilding Industry Board director, to his Department?
    Mr. Davies: No, Sir, I do not think so. At the time when the gentleman in question became a member of Yarrow's board it was felt, on the contrary, that there might be real use in having a common element at a time when, the hon. Gentleman will remember, there was a question
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    of a take-over by one company of part of the interests of another.
    Mr. Sutcliffeasked the Secretary of State for Trade and Industry if he will make a further statement on the situation concerning Upper Clyde Shipbuilders.
    Mr. John Davies: I hope to be able to make a statement shortly.
    Mr. Sutcliffe: Will my right hon. Friend undertake to make a statement before the Summer Recess? Will he at the same time look into the situation at Doxford, Sunderland?
    Mr. Davies: I hope to make a statement before the Summer Recess and I will take account of what my hon. Friend says about Doxford.
    Mr. Benn: Will the right hon. Gentleman convey to the Leader of the House that, if a decision on U.C.S. were to worsen the grave unemployment situation in Scotland, time should be provided in the House for an early debate on it?
    Mr. Davies: No doubt my right hon. Friend will take into account what the right hon. Gentleman said.

    Discount Air Travel Centre
    Mr. Michael McNair-Wilsonasked the Secretary of State for Trade and Industry whether he will initiate proceedings against the Discount Air Travel Centre for breach of the charter flights regulations, in view of the evidence supplied by him by the hon. Member for Walthamstow, East.
    Mr. Noble: We shall decide whether to take legal proceedings when the investigations now going on have been completed.
    Mr. McNair-Wilson: Does not my right hon. Friend agree that that shop is breaking the I.A.T.A. regulations that prohibit the sale of charter seats to the public direct? Is not that, therefore, flouting the regulations, and is not it one more example of how the regulations are continually being flouted? Is not it time we either gave that sort of freedom to all tour operators or clamped down on that sort of unscrupulous enterprise?
    Mr. Noble: While I agree with my hon. Friend that the story he kindly sent

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    me from the Evening Standard produced almost all the kinds of problem to which he would object—and so would I—he must remember that there are laws of this country as well as international regulations which control such affairs. I entirely agree with him that the whole question needs very careful overhaul.
    Mr. Mason: Does not the right hon. Gentleman remember that the Air Transport Licensing Board drew his attention in its Annual Report to the illegal issue of air tickets for charter flights, and that he said on 2nd July that he was considering how he could deal with such abuses? What action has he taken, or what action does he contemplate taking, on the general question and not just this particular question? What assessment has his Department made of the safety standard of such operations?
    Mr. Noble: I am not sure that I understand the right hon. Gentleman's second point about safety standards. Certainly the A.T.L.B. is looking at these problems, and it keeps me informed of its views. We are considering with our colleagues overseas what better method could be adopted. As to the question of offences, I think that the right hon. Gentleman will remember, because he had a close interest in the matter, that it is not the sale of a ticket that creates the offence but the flight of the aircraft, and if that is then connected with the sale of a ticket it is possible, but not certain, that an offence has taken place.
    Mr. Mason: Will the right hon. Gentleman explain what his Department is doing about surveillance? We hear occasionally about the Department stopping aircraft from flying. What is his aviation department doing about stopping the aircraft concerned from taking off when it knows full well, as is shown by the reply to this Question, that there has been an illegal sale of tickets?
    Mr. Noble: The right hon. Gentleman is being a little naive for someone who knows exactly what the situation is. The sale of the tickets is not in itself an offence, as I have said. If we are to change the rules, we have to do so in co-operation with a great number of other people internationally. Discussions have been going on steadily over the last few weeks. As I reported to the House on
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    2nd July, we are considering this problem in conjunction with our colleagues.
    Mr. Mason: The Department has already prosecuted two. What about the rest?

    Eastern Europe (United Kingdom Trade)
    Mrs. Renée Shortasked the Secretary of State for Trade and Industry what estimate he has made of the development of trade between the United Kingdom and Eastern Europe after 1973.
    Mr. Noble: A detailed estimate could not usefully be made but I see no reason why our trade with Eastern Europe should not continue to expand.
    Mrs. Short: Does not the right hon. Gentleman agree that if we enter the E.E.C. we shall be lowering the tariff barriers in respect of 188 million people who live in the Six but raising them against a larger number, including the 350 million people living in Eastern Europe and all those in the Commonwealth, Latin America and everywhere else? Does this mean that he has written off trade with every other part of the world except the Six?
    Mr. Noble: The hon. Lady and I share at least one thing in common, which is to try to expand trade with Eastern Europe. She may not be aware that trade with Eastern Europe is six times as great from the Common Market countries as it is from this country, and that the annual rate of growth in their trade has gone up more than half again as much as ours. In these circumstances, I fail to see why joining the Common Market will have any deleterious effect on our trade with Eastern Europe.

    Supermarkets (Warnings to Shoplifters)
    Mr. John Hannamasked the Secretary of State for Trade and Industry if he will introduce legislation making it mandatory upon supermarkets to instal warning signs at exit points, reminding customers of the need to check their shopping bags for unpaid articles.
    Sir J. Eden: I am sure that individual managements will wish to consider this suggestion. The Home Office have

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    already arranged that problems related to the internal security of shops be studied.
    Mr. Hannam: I thank my right hon. Friend for that reply. I am pleased to hear that a study is taking place. There is increasing evidence that large numbers of housewives are being prosecuted for shiplifting offences when there turns out to be little evidence of intent to steal. Does not he agree that supermarkets could do more to assist housewives by displaying visual signs and by the installation of cloakrooms for the deposit of shopping bags in order to alleviate this kind of incident, which puts a blight on the rest of a woman's life?
    Sir J. Eden: I understand that, but my hon. Friend will understand that pilferage is a serious problem for shop managements and that it must be for them to take and vary measures designed to deter and detect pilferage as may seem appropriate.
    Mr. Greville Janner: Is the hon. Gentleman aware of the great concern felt at the large number of people who are wrongfully prosecuted for shoplifting? This is a matter of great importance to the individual shopper, because it is so easy at the moment to make a mistake. In the circumstances, will he tell the House who are conducting the study, who are on the board doing the study and when the study will be concluded?
    Sir J. Eden: Questions about the adequacy of the law and penalties relating to shoplifting are a matter for my right hon. Friend the Home Secretary. As I said, a working party of the Home Office Standing Committee on Crime Prevention is currently examining various aspects of internal security in shops, including shoplifting. The working party will be taking into account the suggestions made by my hon. Friend the Member for Exeter (Mr. John Hannam) and by others concerning the display of warning signs in the shops.
    Mr. Adley: While appreciating that this is an enormous problem of concern to the shops, may I ask whether my hon. Friend is aware that I have been trying for months to get some kind of sense, if I may say so, out of various Government Departments as to who is responsible for dealing with this problem? Is he aware that one is transferred from the Home Office to the Attorney-General to
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    the Department of Trade and Industry. It is no use leaving it to the stores themselves because—relating this point to the Question put by my hon. Friend the Member for Exeter (Mr. John Hannam)—the National Association of Multiple Grocers has written to me, in response to suggestions I made about visual signs, saying,
    "in vain is the snare set in sight of the birds."
    The shopkeepers are more concerned with catching people than with prevention. What is my hon. Friend doing about it?
    Sir J. Eden: As my hon. Friend will have heard from earlier replies, this matter is being studied very carefully. The Standing Committee on Crime Prevention at the Home Office is looking into this specific question and will take account of the suggestions which have been made. I am certain that all hon. Members will agree that these are matters much more for advice than regulation and that it is primarily a matter for the shopkeepers concerned.

    Hallmarking
    Mr. Chapmanasked the Secretary of State for Trade and Industry when he will make a further statement on compulsory hallmarking.
    Sir J. Eden: Discussions are still in progress to clarify certain points raised by interested organisations on the details of a reformed compulsory system, on which in general there is a wide measure of agreement. It will then be necessary to consider how a new scheme can best be administered and enforced.
    Mr. Chapman: Since it is precisely 115 years ago since a Select Committee of this House recommended changes in the hallmarking system and since, in a previous Parliamentary Answer, my hon. Friend said he expected that a conclusion would be reached by the Government before the end of last year, does not he owe it to the House to make a definite statement before the Summer Recess about this matter and the progress made?
    Sir J. Eden: I recognise the strength of feeling that this matter should have been dealt with before now. We are pressing ahead as fast as we can. This is an extremely important matter and it is right fully to explore the nature and

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    weight of criticisms before coming to decisions.

    Heathrow (Noise)
    Mr. Hugh Jenkinsasked the Secretary of State for Trade and Industry if he has received the appendix to the recent document published by the British Association for the Control of Aircraft Noise entitled "The Heathrow Racket", a copy of which has been sent to him; and if he will publish his conclusions on this document.
    Mr. Noble: I have received it. I do not accept its theme that the size and incidence of Heathrow's noise problem has in any way been misrepresented by the Department. On the contrary, the severity and spread of the disturbance has long been fully and publicly recognised.
    Mr. Jenkins: The right hon. Gentleman may give that answer, but is he not aware that tens of thousands of noise infringements take place on landing which are totally ignored in official figures? If he cannot stop these infringements, will he not at least record them so that we know about them? As 75 per cent. of the night movements are freight movements, are all these night movements necessary? What comments has he to make on the conclusion in the document which I have mentioned that the official policy in this matter is one of deliberate, massive deception of the public?
    Mr. Noble: The third part of the question I have already answered. On the first part of the question—the hon. Gentleman knows this because we have discussed these matters on a good many occasions in the House—there is no point in monitoring the landing noises when it is made obligatory for an aircraft to fly at a certain angle and the pilot in charge of the safety of that aircraft has to use his engine to maintain exactly the right slope. There is no point in monitoring unless one can prevent the noise—noise which may sometimes be necessary for the safety of passengers.
    I accept that a great proportion of freight traffic flies at night, and this is an important part of our export effort. If we were to restrict all the freight services to the day, it would make the congestion there infinitely worse, indeed intolerable.
    Mr. Allason: Is my right hon. Friend aware that the noise nuisance indicator is now a very poor representation of nuisance from aircraft noise, and is it not time that another committee was set up to discover a better way of indicating the extreme nuisance which flows from noise?
    Mr. Noble: Even my hon. Friend will agree that I am most receptive to any ideas to try to improve this intractable and difficult problem. A committee will report on this matter very shortly and possibly will produce some rather better suggestions on the best method of monitoring.

    Thames Estuary (Collision)
    Mr. Braineasked the Secretary of State for Trade and Industry when his Department's investigation into the collision of the liner "Monte Ulia" with an oil jetty in the Thames estuary on 26th July, 1970, which led to a serious fire, will be completed; why the investigation has taken so long; and whether the report will be made public.
    Mr. Noble: The report of the preliminary inquiry into this casualty was made in September, 1970. It is not the practice to publish such reports, which are used by the Department as a guide to further action.
    Mr. Braine: May I convey to my right hon. Friend my deep concern that a year has passed since the "Monte Ulia" literally set the Thames on fire, endangering Canvey Island, where 25,000 of my constituents live alongside high fire risk installations? Is he aware that in that year there was an increase in the number of heavy tankers using the Channel and a decrease in the standard of navigation? Will he explain why the local authorities concerned have received no information about the lessons, if any, learned from this incident? Will he accept that in this day and age such neglect is totally unacceptable?
    Mr. Noble: I certainly accept from my hon. Friend that the danger of fire in his area is very great and naturally of concern to him and the local authorities, but it is my right hon. Friend the Home Secretary who is responsible for questions concerning both the safety and the

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    design of oil jetties. I will draw my hon. Friend's comments to the attention of the Home Secretary.

    Imported Goods (Country of Origin)
    Mr. J. H. Osbornasked the Secretary of State for Trade and Industry if he will now make a statement on the issue of marking orders relating to country of origin under the Trade Descriptions Act, and the measures he is taking to ensure protection and information to the consumer as a result of any changes in marking procedures.
    Sir J. Eden: I would refer my hon. Friend to the answers given to him on 24th May and to my hon. Friend the Member for Cheadle (Mr. Normanton) on 16th June. The consumer will be protected against false or misleading indications of origin by the misdescription provisions of the Trade Descriptions Act.—[Vol. 818, c. 9; Vol. 819, c. 100.]
    Mr. Osborn: There are a number of industries, including those based in Sheffield, making quality products which have relied on marking orders indicating the countries of origin and a number of industries have made applications to continue these marking orders. Will my hon. Friend consider these applications sympathetically? In those cases where he is not continuing the orders, what steps is he taking to ensure that the consumer has the protection of quality which hitherto he has taken for granted?
    Sir J. Eden: The important point to consider is whether marking orders are likely to provide a reliable indication of the characteristics which would affect the suitability of the goods for the use the consumer has in mind. The question of the applications still under consideration is the subject of other Questions by my hon. Friend, and we shall give them very careful consideration. However, generally speaking, the consumer's best interests are protected in this matter by information given across the counter as to the countries from which the goods are obtained and as to the general assessment of quality.

    Anglo-Indian Trade
    Mr. Juddasked the Secretary of State for Trade and Industry whether he will make a statement on the representations he has received concerning the latest developments in British trade relations with India.
    Mr. Noble: I assume the development the hon. Member has in mind is the notice we have given of termination of the Anglo-Indian Trade Agreement, 1939. Since I announced this on 30th June there have been no formal representations. I have received a small number of letters commenting on the position, but these do not call for any addition to the explanation I have already given the House.—[Vol. 865, c. 152–4.]
    Mr. Judd: Taking these developments into account, together with the misgivings about India's future trading prospects following any extension of the E.E.C. and British accession thereto, could the right hon. Gentleman give the House a solemn assurance that the trading interests of the Indian continent will at all costs be protected should Britain accede to the E.E.C.?
    Mr. Noble: That is a rather wide question to ask me to accept at this moment; but, as I said, the policy with the Indian Government has been to keep in very close consultation on any matter of this sort which affects them, and so far I have had no complaint from them that their interests have not been considered.

    Gas Industry (Ancillary Operations)
    Mr. Clinton Davisasked the Secretary of State for Trade and Industry if he will give an undertaking not to dispose of the operations of the nationalised gas industry relating to installation, servicing and maintenance work, and the showrooms operated by the industry throughout the country.
    Sir J. Eden: I am still considering the present range of activities in this industry.
    Mr. Davis: Is not the hon. Gentleman prepared to be more frank? Is he not aware that Press reports some two weeks ago indicated that the Government had plans to hive off these operations? When

    21
    does he propose to make an announcement about these matters?
    Sir J. Eden: The current review of the gas and electricity industries' activities is going ahead as fast as possible, but I do not think that it should be rushed. An announcement will be made as soon as I am in a position to make it.
    Mr. Kenneth Lewis: Nevertheless, will my hon. Friend bear in mind that a great deal of money could be saved if the gas and electricity industries merged many of their activities, for example in the reading of meters, since at the moment two people come to a house to read separate meters, a job which could be done by one man?
    Sir J. Eden: Joint metering arrangements are another matter.
    Mr. Frank Allaun: On the question of hiving off these and other profitable sections of publicly-owned activities, has the Minister seen a document which is out today—the agenda of this year's annual Labour Party conference, which contains no fewer than 43 resolutions, from such powerful bodies as the miners, railwaymen, Post Office engineers and others concerned, stating that the next Labour Government should take these former publicly-owned sectors back into public ownership without compensation?
    Sir J. Eden: I believe we are all aware that the agenda of the conference to which the hon. Gentleman referred was probably prepared some time ago and that, therefore, the resolutions have been overtaken by changed attitudes. But hiving off is much more a question not whether the sections of the industry are profitable or unprofitable but whether they are organised in such a way as to bring most benefit to taxpayers and consumers.

    Aircraft Accidents (Flight Recorders)
    Mr. Tebbitasked the Secretary of State for Trade and Industry what, for each of the last five years, has been the number of fatal accidents to British-registered aircraft engaged in public transport flights, the number of those aircraft carrying a crash-protected flight recorder, the number of those recorders believed to be serviceable at the beginning of the
    22
    fatal flight, and the number of those recorders which yielded all the information which they were capable of doing.
    Mr. Noble: With permission I will circulate the figures requested in the OFFICIAL REPORT in the form of a Table.
    To summarise, there were, over the last five years, 12 fatal accidents to British-registered aircraft on public transport flights. On six of these aircraft crash-protected recorders were carried. All six were believed serviceable at the beginning of the fatal flights and two of the recorders yielded all the information they were capable of recording. These figures exclude one taxi-ing fatality to a third party.
    Mr. Tebbit: Does not my right hon. Friend agree that the fact that only two of these recorders out of 12 incidents yielded the information which could be expected of them indicates the need to ensure that a serviceable crash-protected flight recorder is carried on public transport flights by all United Kingdom-registered aircraft?
    Mr. Noble: In one case—one of the four—the aircraft was not recoverable. In another, the recorder failed to record one mandatory parameter. In the third accident, the recording wire was damaged, and only partial information was recovered. In the last, although it failed to record one mandatory parameter, all information relative to the accident was retrieved. Perhaps the situation is not as bad as the summary of information that I have given appears to indicate. It would be undesirable to insist that all public transport flights carried these very expensive and sometimes rather heavy pieces of equipment.
    Mr. Mason: Do the statistics reveal a higher accident rate among charter operators, as distinct from the independent airlines and the public corporations? Since the charter operators have more take-offs and landings and, therefore, generally speaking are subject to more accidents than the independent airlines and the public corporations, is not it more encumbent upon them to carry these black box flight recorders?
    Mr. Noble: I am afraid that I cannot give the answer for which the right hon.

    23
    Gentleman asks without notice. The truth is that over a number of years the accident record of the charter operators has come up to about level with those of

    Calendar Year

    Fatal accidents to U.K.-registered aircraft on Public Transport flights

    Crash-protected Recorders fitted

    Recorders believed serviceable before flight

    All Recorder information yielded

    1966

    …

    …

    3

    0

    —

    —

    1967

    …

    …

    4

    3

    3

    1

    1968

    …

    …

    3

    2

    2

    1

    1969

    …

    …

    1

    0

    —

    —

    1970

    …

    …

    1

    1

    1

    —

    12

    6

    6

    2

    Notes:

    1. In one of the accidents in 1967 (B.E.A. Comet near Rhodes) the aircraft wreckage sank in over 1,000 fathoms of water and the recorder was not recovered.

    2. The figures for 1970 exclude a fatal accident when a member of the ground staff working beside a taxiway at Heathrow was struck by the engine pod of a B.O.A.C. 707 as it was taxiing out for take-off.

    3. In the one accident in 1970 (Dan Air Comet near Barcelona) although not all the information was recovered from the recorder all information significant to the accident investigation was available.

    Metrication
    Mr. Rostasked the Secretary of State for Trade and Industry what further information he now has on when the White Paper on metrication is to be published.
    Sir J. Eden: I cannot add to the Answer given to my hon. Friend the Member for Bosworth (Mr. Adam Butler) on 22nd June this year.—[Vol. 819, c. 252.]
    Mr. Rost: Does not my hon. Friend agree that large numbers of the public are becoming increasingly suspicious about creeping metrication? If we are to have metrication thrust down our unwilling throats, ought not it first to be the subject of approval of this House?
    Mr. Russell Kerr: Give them an inch and they take a yard.
    Sir J. Eden: Metrication has always been a voluntary matter for industry, with co-ordination under the general guidance of the Metrication Board. As regards the latter part of my hon. Friend's question, he will know that already we have given assurances to the House in that respect.
    Mr. John Hall: If metrication is an entirely voluntary matter, can my hon. Friend explain why it is that, in the next few years, it will be the only system taught in our schools?
    B.O.A.C. and B.E.A. I am sure that the whole House will be glad to note that.
    The following is the Table:
    Sir J. Eden: It is probably because education authorities are becoming increasingly aware of the extent to which the voluntary development of metrication has spread throughout industry.
    Mr. John Hallasked the Secretary of State for Trade and Industry what guidance he has given to industry about conversion to the metric system in view of the fact that the countries within the European Economic Community, together with Denmark and Norway, have adopted or are about to adopt the System Internationale d' Unites.
    Sir J. Eden: Guidance is being given by the Metrication Board whose primary function is to facilitate and co-ordinate the voluntary changeover of industry to the metric system.
    Mr. Hall: Does my hon. Friend agree that we are in danger of getting into confusion about conversion to the metric system? Does he agree that at the moment we are introducing the metric system into this country by stealth? Should we not have a debate to decide, first, whether we are to introduce the metric system and, secondly, if we are, what kind of system?
    Sir J. Eden: My hon. Friend will recollect that we have had debates on this subject. We have undertaken to publish a White Paper as soon as possible

    25
    setting out the Government's comprehensive view on the matter. Debates will then take place on the White Paper.
    Mr. Biffen: Will my hon. Friend tell us whether, in the event of British accession to the Treaty of Rome, the many hundreds of regulations, directives and recommendations of the Commission, which would have to become an integral part of our statutes, require that this House shall introduce metric legislation? Is he aware that guidance on this specific point is urgently required?
    Sir J. Eden: No, Sir. I think that the question of what will be the position under the Treaty of Rome will be a matter for us after membership. In the meantime, as my hon. Friend will be aware, discussions are going on at Brussels about the international system of units, and at this stage we are closely associated with those talks to ensure that no decisions are taken which run counter to our own interests in the matter.
    Mr. Benn: Before the Government publish the White Paper will the Minister consult the former Director-General of the C.B.I., the right hon. Member for Knutsford (Mr. John Davies), who is on record as criticising the previous Government for proceeding too slowly in this matter?
    Sir J. Eden: I will happily consult the former Director-General on this and other matters, as I find his advice extremely valuable and well-informed.

    Steel Industry (Stamping Works)
    Dr. Gilbertasked the Secretary of State for Trade and Industry if he will list the stamping works which the British Steel Corporation intends to sell off to private interests.
    Sir J. Eden: The implementation of the conclusions my right hon. Friend announced on 28th June is for the Corporation. I am asking the Chairman to write to the hon. Member.
    Dr. Gilbert: Can the hon. Gentleman say why it is that I have had no reply to a letter which I sent him nearly three weeks ago asking for assurances about employment prospects and the guarantee of pension arrangements of people working at Cookley? Secondly, will the hon.
    26
    Gentleman investigate the serious report from a senior official at the Cookley works that there have been approaches from private interests about the availability of the works—before any announcement from the British Steel Corporation?
    Sir J. Eden: I have no knowledge on the latter point. I apologise for the delay in answering the hon. Member's letter. I will look into it at once.

    Newsagents (Distribution of Journals)
    Mr. Frank Allaunasked the Secretary of State for Trade and Industry if he is aware that wholesale newsagents are preventing the distribution of some journals to retail newsagents; and if he will introduce legislation to prevent this restrictive action.
    Sir J. Eden: If the hon. Member has any evidence that wholesale newsagents have agreed to such practices perhaps he would send it to me.
    Mr. Allaun: Does not the hon. Gentleman agree that newspaper closures are threatening the freedom of the Press? Is he aware that, by refusing to handle Private Eye, W. H. Smith, which occupies a dominant position, is restricting further the access of the public to exposures of financial and political corruption? If W. H. Smith argues that distributors are frightened of being made liable to libel actions, will he suggest to his right hon. and learned Friend the Attorney-General that this matter be included in the discussions now taking place on the possibility of amending the libel law?
    Sir J. Eden: Refusal to supply by an individual firm without any agreement with other suppliers is not registrable Under the law, a supplier is free to decide with whom and on what terms he does business. The Government have no general power to intervene.
    Mr. Crouch: Is my hon. Friend aware that there have been many cases in which wholesale newsagents have attempted to restrict the number of retail newsagents in different towns and that, before he became a Minister, I supplied his Department with evidence of such a case?
    Sir J. Eden: I will take up my hon. Friend's point about details of specific

    27
    cases with which he has provided my Department. If there is a suggestion that some wholesale newsagents may be imposing a kind of censorship, then, of course, the subject is one for my right hon. Friend the Home Secretary.
    Mr. Arthur Davidson: If wholesale newsagents, who have a near monopoly, are preventing the distribution of magazines which may have a minority taste but which still ought to be read in a country which prides itself on freedom of speech, and are using the law of defamation as an excuse, does not the Minister think that this is a matter which ought to be referred to the committee now examining the law of defamation? Will he also bear in mind that it is not only Private Eye which occasionally commits defamation but also some other most respectable newspapers?
    Sir J. Eden: I must keep to the question of restrictive trade practices. This matter, as was announced by my right hon. Friend on 17th December, 1970, is the subject of a review. The case for extending the legislation to certain anticompetitive practices by single firms will certainly be considered.
    Mr. Benn: In view of the difficulty experienced by hon. Members in getting Private Eye, will the hon. Gentleman consider circulating it with the OFFICIAL REPORT?
    Sir J. Eden: I suggest that the right hon. Gentleman asks his hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) for a complimentary copy.

    Northern Region (Investment Projects)
    Mr. David Reedasked the Secretary of State for Trade and Industry how many firms to date have notified him of decisions to withdraw or substantially to alter investment projects in the Northern Region following the change in investment incentives; and if he will make a statement.
    Sir J. Eden: Only one was attributed by a firm to the change in investment incentives.
    Mr. Reed: Notwithstanding that figure, will the hon. Gentleman accept that there is growing concern in the Northern Re-28
    gion and other development areas about the low level of new investment projects? Will he therefore consider introducing an emergency programme of investment grants to do something positive to tackle unemployment this winter? Is the Minister aware that if these were somehow linked with the occupation of advance factories, it would enable the Government to tackle unemployment in areas which need help at a time when they need it most?
    Sir J. Eden: I think that the recent proposals announced by my right hon. Friend the Chancellor of the Exchequer fully meet the hon. Gentleman's points.
    Dame Irene Ward: Apart from the argument which is now going on about investment grants, will my hon. Friend bear in mind that the northern area requires new investment? The Chancellor's mini-Budget may help, but it is real, sound, good, developing new industry that we want. What are the Government proposing to do about getting investment into the northern area?
    Sir J. Eden: A great deal has been and is being done, as my hon. Friend well knows. There has been greatly improved L.E.A. assistance. S.D.A. status has been given to both Tyneside and Wearside. There has been additional expenditure for improvements to economic and social infrastructure, the extension of free depreciation on all immobile plant and machinery, and action to stimulate demand generally. All these actions show that we are tackling the problem with great vigour.
    Mr. Dan Jones: May I ask whether precisely the same principle applies to intermediate areas, particularly those in North-East Lancashire?
    Sir J. Eden: We are concerned to see that expansion takes place generally. The purpose of giving different categories for particular areas is to ensure that where mobile new jobs can be created they go to the areas where the needs are greatest.

    Solid Fuel (Promotion Campaign)
    Mr. Skinnerasked the Secretary of State for Trade and Industry if he will issue a general direction to the National Coal Board further to promote the use of solid fuel.
    Sir J. Eden: I am sure the National Coal Board needs no direction to do this.
    Mr. Skinner: I am certain that it does not, and it worries me. Is the Minister aware that in recent months the new Chairman of the Coal Board, Derek Ezra, has been issuing, or has allowed to be issued, propaganda suggesting that 40,000 extra mining jobs will be created if we join the E.E.C.? While that is hypothetical conjecture and sounds very rosy, perhaps the Minister will help us. I am not too concerned about the 40,000 extra jobs—[HON. MEMBERS: "Oh."] The 40,000 hypothetical, alleged, extra jobs. I will put it that way. Will the hon. Gentleman be more specific and tell the British miners that if we enter the E.E.C. not a single job will be lost out of the existing 300,000?
    Sir J. Eden: The expressed views of the Chairman of the National Coal Board are a matter entirely for him, but I am sure that the hon. Gentleman will take into account his assessment that great opportunities exist for the National Coal Board in an enlarged Community. I share that view.
    Mr. Palmer: Taking the apparent point of my hon. Friend's Question, will the hon. Gentleman tell us whether there will be ample supplies of solid smokeless fuel in the country next winter?
    Sir J. Eden: The stocking position is looking good at present.

    Steel Workers, Manchester (Redundancies)
    Mr. Charles R. Morrisasked the Secretary of State for Trade and Industry what action he proposes to take to provide alternative employment for redundant steel workers at the British Steel Corporation plant at Openshaw, Manchester.
    Mr. John Davies: Problems of redeployment in Openshaw, and Manchester generally, will best be solved in the context of national growth, to which the measures announced last week by my
    30
    right hon. Friend the Chancellor of the Exchequer are strongly directed.
    Mr. Morris: Is the Secretary of State aware that steel workers in Openshaw and people in the City of Manchester took hope and encouragement from a recent reply given by the Under-Scretary of State that the Department was to be much more generous in allocating Industrial development certificates for the City of Manchester? Is he aware that that hope and encouragement has turned to consternation arising from a publication by the Department of Trade and Industry entitled "Guidelines" which indicates that these I.D.C.s for the City of Manchester are to be allocated only to existing companies and firms there? Will he explain this contradiction between the Under-Secretary's reply in an Adjournment debate and the "Guidelines" publication?
    Mr. Davies: The operation of the I.D.C. policy is undertaken by the Department with the utmost flexibility, and certainly the particular requirements of the Manchester area are very much taken into account at present and will be in future. However, the hon. Gentleman will realise that, serious as they may be, the problems of Manchester are not as great as those of the development areas, which must have priority.
    Sir R. Cary: Is my right hon. Friend aware that the rundown at the Irlam steelworks begins next month with the first 1,750 men? Will he make an early statement about the future of those works?
    Mr. Davies: I have said several times—and I have been in contact with the Chairman of the British Steel Corporation before so doing—that the Chairman is prepared to undertake discussions with any interest which may have suggestions to put to him about mitigating the rundown to which my hon. Friend refers.
    Mr. Kaufman: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I will raise the matter on the Adjournment.

ORDERS OF THE DAY

  UNITED KINGDOM AND EUROPEAN COMMUNITIES
  Order read for resuming Adjourned debate on Question [21st July]:
  That this House takes note of the White Paper entitled The United Kingdom and the European Communities (Command Paper No. 4715).—[The Prime Minister.]
  Question again proposed.
  3.31 p.m.
  The Chancellor of the Exchequer (Mr. Anthony Barber): It is just about a year ago, within a few days, that I ceased to be Chancellor of the Duchy of Lancaster and handed over to my right hon. and learned Friend the Member for Hexham (Mr. Rippon). I well remember at the time when I left the Foreign Office pondering on the likely success of the negotiations. I think that if anybody had asked me then I should have said that the chances of a successful conclusion of the negotiations were about 50–50. I was by then quite convinced that each of the six members of the Community genuinely wanted us to join, and I believe that I had convinced them that the British Government were sincere and were in earnest. But to one question I could not then give an answer—should we be able to negotiate terms satisfactory to the United Kingdom?
  I think that I am perhaps in the best position of anyone to say that, whatever views right hon. and hon. Members on either side of the House may hold about the merits of the case for entry, we owe a real debt of gratitude to my right hon. and learned Friend the Chancellor of the Duchy of Lancaster for the tenacity and skill with which he has conducted these negotiations, and I think that I would go further and say that in certain respects—New Zealand, for instance—he has succeeded beyond my expectations.
  There is one thing that I want to say, which is, perhaps, a somewhat surprising admission to come from one who started the negotiations, but I think that it should be said. I was never one of those who would not take "No" for an answer. Indeed, I said in my first speech at the opening of the negotiations that unless a
  32
  satisfactory financial solution could be found
  "no British Government could contemplate joining".
  I well remember at the time that both in the European Press and in the British Press I was criticised for putting that point so bluntly. I must tell the House that, with my particular responsibility as Chancellor of the Exchequer, I have no doubt whatever that the terms which have been negotiated are not only fair but that to join on these terms will be to the great benefit of the British people.
  It is right that today, on the last day of this debate, I should concentrate on the economic and financial aspects of entry, and I hope that in due course the House will bear with me if I deal with certain rather technical matters.
  The basis of the Government's case is that we believe that on the terms which have been negotiated membership of the enlarged Community will bring substantial economic benefits to the United Kingdom. The success of a nation, as of an individual, depends upon the exertions and the skills of its people. But any country operates within a given economic framework, and this can have a deep and a lasting effect upon its success.
  For an industrial nation like ours, the best framework for efficiency and growth is one where the opportunities for competitive trading, free of tariffs and other barriers, are wide and are securely based. Companies are better able to specialise and to derive advantage from the economies of large-scale working. They have greater encouragement to market new products, and they have an increased incentive to invest in the latest equipment. Resources can be used more efficiently, which in turn leads to a higher national income.
  We have seen the emergence of just such conditions in the Common Market itself. The experience of the Six over the past 14 years since the signing of the Treaty of Rome shows just how important the economic framework is to the prosperity of the economies which work within it. By contrast, for the United Kingdom the past decade—indeed, I think, one could probably say most of the period since 1945—has been, by and large, a disappointing one. Our

  33
  poor record of growth, our disappointing level of investment, our struggles with the balance of payments, the lack of sustained business confidence and the frequent imposition of economic restrictions, are all too familiar to hon. Members on both sides of the House.
  The higher rates of growth of the Six are equally well known. In the 'sixties their average rate of growth was nearly twice that of the United Kingdom. To put it another way, at the rate of growth which we have achieved in the last decade it would take us 35 years to double our standard of living. The Community is doubling its standard of living every 17 years.
  As the House knows, I have always recognised that there are certain special circumstances which account in part for that record of the Six in the 'fifties and in the 'sixties. Some of them, as we know only too well, started from a comparatively low base as a result of the war. Others benefited from the recruitment into industry of labour released from agriculture and initially their tariffs were high, and so their mutual trade expanded rapidly when the barriers came down.
  But I for one do not believe that factors such as those, however important during the 'fifties, could account wholly for the general improvement in the performance of the Six through the 'sixties; for the fact that their productivity per man employed in manufacturing industry has been rising in a most striking manner; and for the benefits which they have derived, and will continue to enjoy, through better allocation of resources within the Community following the final achievement of the Customs Union. It is very significant that they had already achieved a high rate of growth in the output of manufacturing industry per employee in the early 'sixties, and that most of them had shown a further marked increase in this rate in the second half of the last decade.
  I accept, as I always have done, that this success cannot be ascribed specifically, or statistically to the creation of the Community. Too many factors are involved, and the process of growth is very complex. But if one talks to the Ministers of the Six one finds that they have no doubt whatsoever that the abolition of tariffs and the formation of a
  34
  single large market has helped very substantially, and it would be strange indeed if they, who are directly involved in this major change, should be wrong in their assessment of its effects. For my part, I am convinced that the enlargement of the Community will provide conditions within which the ten countries, including our own, can thrive in competition, and grow in national wealth.
  The abolition of tariffs is the "trigger" to trade expansion and industrial change. But entry to the Communities cannot be regarded simply as a tariff exercise, as a sort of "European" Kennedy Round. Mere tariffs are in essence provisional. There is always a danger that in changed circumstances the parties may be driven back again to protectionism.
  The Community is different. Free trade between its members is an assured and guaranteed change in the whole trading situation, and from the moment of our entry our industrialists can count upon a single market for their products. The change is not simply a technical matter of price relationships but a new climate for planning investment, production and sales in a great new single market approaching some 300 million people.
  Not only are all the existing members of the Six convinced that they have benefited; this is also the view of the great majority of British industry. At its council meeting about ten days ago, the C.B.I, reaffirmed its support for British entry. It considered that the terms were "far better than expected" and emphasised the poor prospects for British industry and for the country's economy if the United Kingdom were at this stage to choose to remain outside the E.E.C.
  The motor industry, in particular, sees great opportunities. The House will remember no doubt the recent advertisement of British Leyland. It is worth quoting what Lord Stokes said:
  "As Britain's biggest single exporting company, British Leyland welcomes the prospect of entry into the Common Market."
  He went on:
  "We feel sure that it will be good for Britain, good for Europe and particularly good for British industry and ourselves."
  He then said:
  "We forecast that, if things go well, we should double our sales in Europe by 1975."

  35
  But, of course, British Leyland is not alone. This applies to most of the major companies—Shell, Dunlop, Courtaulds, Fisons, Tube Investments, I.C.I., Hawker-Siddeley, De La Rue, and so one could go on. They and others all wholeheartedly support our entry and they all believe that failure to seize this opportunity will gravely damage the prospects for British industry.
  Mrs. Renée Short: Before the right hon. Gentleman leaves the car industry, would he accept from me that car workers in the West Midlands are very concerned about the inroads made by car companies in the Six into the British home market—[HON. MEMBERS: "Whose fault is that?"]—when hon. Members have finished—now reaching about 22 per cent. of the British home market, and that is with an adverse tariff? Are we likely to see the development of this situation when the tariff barriers are removed?
  Mr. Barber: I am sure that, with improved industrial relations and better productivity, we shall do better in that respect. But even so, this is not a oneway traffic. As Lord Stokes himself has pointed out—these are very significant facts—nearly twice as many Minis produced in this country are sold in Italy as all the Italian cars sold in this country. So one has to take into account not just British Leyland but the Chrysler Company, for example, and many others which consider that they will benefit.
  I think that it will be generally accepted that we also have in London the most versatile, flexible and experienced capital market in the world. It is well known that the City is already a major contributor to our national welfare through the sale of services abroad. We think mostly in net terms, but it is interesting to recall that our invisible earnings as a whole have not only been rising steeply but that last year, in gross terms, they amounted to over £5,000 million. Certainly, those who work in the City have no doubt that the country stands to gain from our entry of the Community.
  I have never been one who has scoffed at those who genuinely doubted the wisdom of our joining. It should not be
  36
  forgotten that, before the existing members of the Community themselves signed the Treaty, in every one of those countries, there were genuine doubts and vocal opposition. One senior Minister in the Six, well known to right hon. and hon. Members opposite and to those on this Front Bench, told me that in those days he was resolutely opposed to the whole concept. Now, he has no doubts whatever. The truth is that over the years the Opposition has been silenced by the reality of events.
  Talk to those in the Six, and what does one find? In Germany, for example, it was said that the common agricultural policy would create an impossible balance of payments situation. Instead, their balance of payments has moved from strength to strength. In Italy, it was said that their industries would be crippled by German competition—the sort of fears that one hears sometimes from hon. Members opposite. Instead, Italian industry has thrived.
  In France, it was said that their plans for economic expansion would have to be held back. Instead, their rate of economic growth has been much faster than ours in the United Kingdom. Before entry, Belgium was in many ways in much the same position as Britain is now—a slow rate of economic growth and an economy for which, it was said, the common agricultural policy would present an impossible burden. But the Belgians themselves believe that they have achieved a faster rate of growth and greater prosperity within the Community than they would have achieved if Belgium had remained outside.
  But each of us must form his own judgment. For my part, I am convinced that an enlarged Community will provide the framework within which our pros perity can grow faster than if we remain outside—;
  Mr. Neil Marten: Will my right hon. Friend give way?
  Mr. John Mendelson: Will the right hon. Gentleman allow me?
  Mr. Speaker: To whom is the right hon. Gentleman giving way?
  Mr. Barber: To my hon. Friend.
  Mr. Marten: I am most grateful to my right hon. Friend and I apologise

  37
  to the hon. Member for Penistone (Mr. John Mendelson).
  My right hon. Friend keeps coming back to this growth rate argument, which is very interesting. Has he seen the advertisement in The Times today—not the one signed by Henry Cooper and Mary Quant, but the one which claims that all those businessmen, headed by Campbell Adamson of the C.B.I., believe that the European market is growing at twice our rate? I thought that last week my right hon. Friend said that our growth rate for next year—after all, they too are talking about the future, not the past—was to be between 4 and 4½ per cent., and the E.E.C. growth rate for this current year, 1971–72, is 4½ per cent. How can these businessmen say that it will be twice the rate?
  Mr. Barber: I thought that my hon. Friend was intervening to ask me a question about something that I had said in my speech. I am not responsible for any advertisements which appear in any newspapers, so my hon. Friend must ask himself.
  Mr. John Mendelson Mr. John Mendelson rose—;
  Mr. Barber: I have a good deal to deal with. I have promised to deal with capital movements, the position of sterling and the effect on the balance of payments. I do not want to take up more time than necessary, so I hope that I shall be allowed to get on with my speech.
  Mr. Mendelson: On the point which the right hon. Gentleman made about the expectations of the Six, would he not accept that the Six countries spent four and a half years carefully adjusting many of their economic interests to each other, and that it is the burden of the complaint of some of us that they have refused to do the same for Britain's economic interests? There were discussions only about transitional periods, but it was not possible to reopen any of the arrangements which had already been made.
  Mr. Barber: I do not understand the hon. Member's point. Assuming that we join, we join in 18 months, oh 1st January, 1973, and we then have a transitional period of five years—six and a half years altogether. I believe that, on the terms which have been negotiated, this is ade-
  38
  quate. The hon. Member must form his own judgment, but that is certainly my judgment.
  I want to turn now to our contribution to the Community budget. The other day, in an intervention, the Leader of the Opposition asked to be reminded of what I said at the opening of the negotiations in Luxembourg about the impossibility of accepting certain terms. The words which I used were these:
  "We have to work together to find a solution to this basic problem which will be fair and sound for the enlarged Community and for all its members. If I appear to labour this point, it is only because, unless such a solution is found, the burden on the United Kingdom could not be sustained and no British Government could contemplate joining."
  I went on:
  "Moreover, without a such a solution, the whole basis of stability and confidence, essential to the further development of the Communities, would be lacking".
  We proceeded, as did the previous Administration, recognising, realistically that the common agricultural policy was an integral part of the Community, and that this recognition must form part of our position.
  Mr. John Mendelson: That is the basis of our argument.
  Mr. Barber: That was the position of the Labour Government, and it is not unreasonable that I should point out calmly where there is common ground between us, whatever other differences we may have. As our predecessors recognised, the C.A.P. was not negotiable, but we had the undoubted right to adequate transitional arrangements to enable us to adapt gradually to the new system.
  My right hon. and learned Friend the Chancellor of the Duchy of Lancaster has already dealt with the agreement reached on our contribution to the Community budget during the transitional years. For the years from 1980 onwards, when a ceiling will no longer apply to our contribution, our net payments to the budget will depend on two factors—first, the actual size of the total Community budget, and second, the yield in the 'eighties of United Kingdom levies and duties charged on our imports from non-Community countries.
  It is, frankly, impossible at this stage to make useful forecasts of either of these factors. The size of the budget will

  39
  depend, in part, on the nature of Community expenditure, and our yield of duties and levies will depend on the size of our trade and its pattern and on the sources of our imports.
  As the House knows—and this is the complaint of some hon. Members on both sides—at present Community expenditure is devoted as to well over 80 per cent. to agricultural support, from which the United Kingdom will obtain only a modest return. But the future calls of agriculture will almost certainly decrease.
  Several Hon. Members Several Hon. Members rose—;
  Mr. Barber: I have a lot to say. I hope that I will be allowed to go on.
  Every year, one-third of a million workers leave agriculture in the Six. The pressure of farm surpluses has, it is accepted, eased. The gap between world and Community prices for foodstuffs has narrowed. These are all relevant considerations.
  Over the next five to 10 years, the Community is likely to be spending proportionately much less on agricultural support and more on regional policy, industrial development and so on, from which we should benefit on an equal footing with other members. As my right hon. Friend the Prime Minister has pointed out, as a member of the Community we shall be sharing in the control and direction of these funds. [Interruption.]
  The other main consequence of the C.A.P. is the effect on our domestic prices, which was dealt with by my right hon. Friend the Minister of Agriculture, Fisheries and Food on Friday. As the House knows, we estimate that the effect will be a rise in retail food prices of about 2½ per cent. annually over a period of six years. That is equivalent to a yearly rise in the cost of living of about one-half of one new penny in the £.
  But it is quite wrong to consider the price of food in isolation and to think that, as far as the cost of living is concerned, the only consequence of joining the Community will be to put up the cost of food. That is not the case, because the effect of the reduction in tariffs will be to exert a downward pressure on the prices of manufactured consumer goods, which will be lower than they would otherwise have been. Thus, the rise in
  40
  the cost of living due to our joining the E.E.C. will be less than one-half of one new penny in the £.
  I think it is accepted on both sides of the House that one of the fundamental causes of the apparently inexorable rise in the cost of living in Britain has been our slow rate of economic growth. Certainly every trade union leader knows of our poor record of economic growth, just as he knows that what counts is not money earnings but real earnings.
  Those who oppose our joining the E.E.C. may challenge the action, but they cannot deny the facts—for example, first, considerably faster economic growth over the past decade, and secondly, that between 1958 and 1969 real earnings in the Community increased by over 75 per cent. compared with less than 40 per cent. in the United Kingdom.
  If we succeed in achieving a faster rate of growth, as I am sure we shall, there will follow a faster rise in real wages and salaries and in terms of the standard of living of the British people, which is what really matters.
  We have made it clear in the White Paper that we will take steps to protect retirement pensioners and those who are dependent on other social benefits from the effects of the increases in food prices.
  There is another point about which I was asked which I wish to make clear, because it is relevant to the impact of our joining. Those who depend on retirement pensions and other social benefits will be protected from increases in the cost of living as a result of our entering the E.E.C, small though those increases are likely to be. But these effects will not begin to be felt until the spring and summer of 1973 at the earliest, and this will be exactly the time when we will be reviewing once again the purchasing power of National Insurance benefits, pensions and other benefits.
  My hon. Friend the Member for Banbury was mistaken the other day on an important point. As the House knows, apart from our application, a value-added tax will become operative in this country as from April 1973. I did not hear my right hon. Friend's speech the other day in which he said that by 1973 the V.A.T. must be harmonised at the European level, whatever it is. He will be pleased to know that there is no such

  41
  requirement, though as far as the future harmonisation of rates or coverage is concerned, we will be a party to any such agreements.
  Mr. Marten: I apologise for interrupting my right hon. Friend yet again, but would he say at what date harmonisation is due? I understood that it was originally 1973. [HON. MEMBERS: "No."] What is it now?
  Mr. Barber: There has never been a time, and there is no such date now.
  I come to the important question of capital movements.
  Mr. Dick Douglas: Before the right hon. Gentleman leaves this subject and in view of his remarks about ameliorating the hardship that will be faced by pensioners and those in receipt of social security benefits, may I ask him for an undertaking to have a zero rate on food as an effective safeguard for old-age pensioners and other?
  Mr. Barber: We have already made it clear that when we introduce the V.A.T. in 1973 there will be relief in respect of food. We have spelled this out and made it clear, and under the present arrangements in the E.E.C. we are under no obligation to harmonise either our rates or coverage with the rates or coverage of individual members of the Community.
  I hope the House will bear with me while I answer some questions relating to capital movements. In the White Paper we outlined in the United Kingdom proposals for the progressive liberalisation of certain of our exchange control restrictions in relation to Community countries over a transitional period of five years. The purpose, as the House knows, is to give capital movements between the United Kingdom and other members of the Community a degree of freedom which is called for under arrangements which the Community has already adopted. At the time when the White Paper was published, these proposals were still under consideration by the Community. As hon. Members know, the Community has now accepted the proposals in full.
  Freedom of capital movements between member States is, of course, one of the principal economic freedoms envisaged in the Treaty of Rome and is rightly
  42
  regarded as fundamental to any successful Common Market. The United Kingdom Government have no hesitation in accepting this principle. Both the present and the previous Administration have throughout made it plain that our approach on this matter should be one of full acceptance of the Community's present arrangements, subject only to negotiation of a sufficient transitional period. We set our sights on a period of five years, and this has now been agreed.
  In accepting this principle and concentrating our negotiations on the arrangements for transition, we have relied upon certain safeguards in the Treaty of Rome itself, and I think that I ought again to remind the House of these, because they are important.
  First, the Treaty of Rome itself provides for certain situations in which a member country may need to take special measures of protection, including restrictions of capital movement. Some existing members have taken advantage of this position and, I think I am right in saying, are still doing so. These provisions will be equally available to the United Kingdom.
  Second, the Treaty of Rome provides a framework within which it is allowable, and I can assure the House that it will be technically practicable, to protect ourselves, where we consider it necessary, against leakage of capital via other members of the Community to third countries.
  The Community's present arrangements do not themselves call for total freedom of capital movement of all kinds. The transactions covered were indicated by my right hon. Friend the Chancellor of the Duchy of Lancaster in a Written Answer on 16th July. They include a number of relatively minor items, on many of which we do not at present impose restrictions, but there are three groups of transactions of greater importance to us: direct investment, personal capital movements and portfolio investment.
  Direct investment will be dealt with during the first two years. This could probably occur in two stages, with some relaxation at the outset and the remainder before the end of the second year. Direct investment is not at present prevented by exchange control, but important

  43
  limiting conditions are placed on its financing. It is these conditions which have to be progressively removed.
  At the end of the two years it will be open to United Kingdom companies to carry out direct investment in other Community countries with official exchange, and companies in other Community countries wishing to invest in the United Kingdom will be allowed access to the United Kingdom capital market for their finance. I shall return later to the possible effect on levels of investment.
  The main impact on our foreign exchange position will depend on the extent to which companies at present obliged to make use of foreign finance find it more convenient to use sterling. Some personal capital movements of relatively small financial significance will be liberalised from the outset—for instance, those associated with movement of persons to take up employment. The main bulk, however, will be liberalised by the middle of the transitional period. They include a variety of minor items, such as gifts, payments in connection with inheritances, purchase of private property and funds of emigrants.
  Finally, there is portfolio investment. At present, residents in this country are entirely free to acquire securities in Community countries on the condition that they do so through the investment currency market. Our intention is to remove these restrictions in relation to Community securities by the end of the transitional period. It is not expected that the impact of this particular part of the programme of liberalisation will be very large, taking one year with another.
  I turn now to a matter of considerable importance which has been raised by a number of hon. Members and some right hon. Members opposite, and that is the likely effect of our entry on the levels and direction of movement of the major types of capital investment.
  First, it is worth considering the level of our own British direct investment in the countries of the Six. There was, as the House knows, a considerable upsurge early in the 'sixties, and it gathered pace in the years that followed. This was the very natural result of decisions of many major British companies to make substantial investments
  44
  in the countries of the Six, and what influenced many of them, without doubt, was the sustained rate of growth of prosperity in the Community.
  Often, their decisions were based on the desire to be sure that they would get a foothold on the other side of the tariff barrier in case we did not get in. Once we enter, of course, this motive will cease to have force. I have little doubt that the level of our investments in Europe will continue to grow, but I see no clear reason for assuming that the measures we shall take to conform with freedom of capital movements within Europe will result in any substantial new wave of British investment on the Continent.
  The second factor is investment in the United Kingdom by companies of other Community countries. In the past, with the exception of two or three multinational companies, we have enjoyed very little such investment from other Community countries, and there is scope for considerable growth in future. Improved access to United Kingdom capital to finance investment will no doubt offer an incentive, and the United Kingdom as a full member of the E.E.C. is likely to be more attractive to companies which base their operations within the Six, especially by comparison with the situation in the past, in which the United Kingdom appeared as a relatively slow-growing economy.
  Thirdly, and also important, there are the possible effects on American investment. We have traditionally attracted a good deal of American investment, no doubt influenced by common language, comparable capital markets and a sense of longstanding familiarity. But the significant thing is that over the last decade American investors have found the wider E.E.C. market more attractive. After United Kingdom entry, the American investor will be able to obtain both kinds of benefit in the United Kingdom. I believe that this could well stop, and very likely reverse, the tendency of American investors to look increasingly towards the present six members of the E.E.C.
  On the subject of sterling, I should like to refer to the remarks made by the right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins) on Thursday. Because he was not so long ago Chancellor of the Exchequer, I

  45
  was not surprised to have his understanding of our objectives with regard to sterling. He made a number of points, and I think that I should remind the House of what I said to the right hon. Gentleman on 27th April. I was talking about the replacement of sterling balances by some alternative assets, and I said:
  "… the Government would be ready to consider such a move provided that means could be found which avoided an unacceptable burden on the United Kingdom, promoted the healthy development of the international monetary system, and protected the interests of the sterling holders."—[OFFICIAL REPORT, 27th April, 1971; Vol. 816, c. 219.]
  I will not go over the whole of the ground which is covered by the statement of my right hon. Friend the Prime Minister and which, as the House knows, is set out in paragraph 127 of the White Paper, but I should like to emphasise one point, and that is to give the right hon. Gentleman an absolute assurance that there is no question whatever of taking on a repayment programme which would impose an undue burden on our balance of payments.
  Sometimes the maintenance of sterling as a reserve currency is thought of as a matter of national prestige, but everyone whose business is concerned with these matters knows that, in fact, sterling's relative importance as a reserve currency has declined, and has declined markedly, since the end of the war. In 1950 official sterling balances were 16 per cent. of world reserves: by 1970 they were 7 per cent. As a proportion of world trade, total sterling liabilities were 17 per cent. in 1949 and 4 per cent. in 1969.
  Surely, what is important is that there is no reason to believe that a reduction in the rôle of sterling as a reserve currency would have any significant effect on the invisible earnings of the City. Those earnings arise partly from the use of sterling as a trading currency, which will not be directly affected by a reduction in the reserve balances, and partly from financial services, such as banking and insurance, in which, if anything, the City has strengthened its rôle in recent years. Those services are as capable of being transacted in, say, United States dollars as in sterling. Indeed, a large part of the increase in earnings in recent years is due to London having established itself as the principal market in Eurodollars.
  46
  I come now to the effects of joining on our balance of payments, starting with the broad effect on our economy. For the reasons which I have already explained, I have no doubt that membership will provide us with the opportunity for faster growth. There are costs, but I believe that those costs can be met out of the improved competitive power and the increased resources which membership will offer us. I have already referred to the costs of the contribution to the Community budget. There is also the higher price of food imports from other countries of the enlarged Community. Both these effects can be quantified. Then there is the effect on the balance of trade in goods other than food.
  The previous Administration published an assessment of the possible effects in their White Paper of February, 1970. They gave an estimate of what they called the "impact" effects of the whole pattern of tariff changes. They went on to make the following qualifications about the figures which they gave, which were described as "very rough quantitative estimates". They frankly said that the figures involved a "whole series" of assumptions about the development of world trade over the next five years; they were based on what were described as "highly oversimplified assumptions" about the effect and timing of a complex series of tariff changes on a wide range of goods. They went on:
  "Each of these assumptions can be little more than an informed guess which may be very wide of the mark."
  They pointed out that they related to a total flow of United Kingdom trade which might be of the order of £18,000 million.
  But, most important, for sound reasons which the previous Administration explained, they made no corresponding estimate of the "dynamic" effects of membership.
  Speaking in the debate on that White Paper, my right hon. Friend the Home Secretary had this to say about the figures for the "impact" effects. This was when we were in Opposition.
  "The arguments put forward are complicated, but they are not sustained by any reasoned argument. It is nonsense to pretend that one can achieve accuracy of this kind in these sorts of forward estimates. … How can one calculate within a range of £100 million or £150 million five years ahead on

  47
  a total of £18 billion? The White Paper concludes by saying that the calculations may be positively misleading. I prefer the phrase used by the Economist, "unadulterated rubbish".—[OFFICIAL REPORT, 24th February, 1970; Vol. 796, c. 1016–17.]
  The distinction between so-called "impact" effects and "dynamic" effects is itself arbitrary and artificial, because the one shades into the other. The first can be measured after a fashion, given fairly sweeping assumptions, but the result is of little more value than an outright guess. The latter, the dynamic effects, as was recognised by the previous Administration, cannot be measured at all. To measure one without the other is to produce a wholly misleading result.
  Our judgment is that the overall effects of the tariff changes on the balance of trade will prove to be both beneficial and substantial.
  The House will appreciate that there will be two simultaneous processes: on the one hand, the cost of food imports, some loss of preferences, and an increase in imports; on the other hand, there will be much greater market opportunities, our improved competitive position, and the expansion of exports. Of course, it is extremely difficult to predict the time path of the outcome of these processes over the transitional period, but, to the extent that the effects are adverse, they will be within our capacity to meet, and the benefits will be substantial, cumulative and continuing.
  Mr. Denis Healey: Could the Chancellor clear up a difficulty? First, he said that the impact would be simultaneous. Is it not the case that the Secretary of State for Trade and Industry admitted that the immediate effect, and for several years, of the removal and changes in preferences would be highly disadvantageous to the United Kingdom? Secondly, did not his right hon. Friend the Chancellor of the Duchy, who is responsible for negotiations, tell the House in December that the effect of the changes in industrial tariffs would be disdvantageous to the extent of £200 to £300 million a year, and did he not confirm this figure, according to the Economist newspaper which the right Gentleman has just quoted, as recently as 24th June? Why have the Government not given these figures honestly in the
  48
  White Paper, especially as the Treasury did a similar calculation of the effects of devaluation and got it absolutely right?
  Mr. Barber: What I said was that the one shades into the other, and I should have thought that no one would disagree with that. I understand, and I respect those such as the right hon. Gentleman who believe that we should have given figures, despite the fact that in the White Paper of spring of last year they were qualified in the way that the right hon. Gentleman knows. After all, he was a member of the Government, and I respect the view he is putting forward. But he was a member of the Government who said in that White Paper:
  "Each of these assumptions can be little more than an informed guess which may be very wide of the mark."
  All I am saying to the right hon. Gentleman is that, for my part, to try and produce a figure for the so-called impact consequences which is
  "… little more than an informed guess which may be very wide of the mark"
  and to produce no figures—which one cannot do, I agree—for the dynamic consequences, would give a wholly misleading idea to the British nation and to Parliament of the consequences.
  Mr. E. Fernyhough Mr. E. Fernyhough (Jarrow) rose—;
  Mr. Barber: It is extremely difficult to predict the time path of the outcome of these processes over the transitional period, but the benefits will be substantial, cumulative and continuing.
  Mr. John Mendelson: The right hon. Gentleman has just said that he did not know.
  Mr. Barber: I turn to the costs which can be identified. Taken together, the budget contribution and the cost of food imports might amount to about £250 million by 1977. It is important to keep this in perspective. In the first place, the additional burden on the balance of payments which we shall have to absorb will begin at a level of about £100 million a year in 1973. It will build up only gradually to the figure of about £250 million by 1977.
  To talk as if there will be a sudden terrible shock to the balance of payments is absurd. The sums we are talking about are well within the range of normal swings in the balance of payments; well

  49
  within the range of accidental developments, good and bad, which affect the balance of payments one way or another in most years. Since the beginning of this year, for example, there has been the increased cost of our oil imports; on the other hand, we have derived advantages from the exchange rate changes in Germany and other countries.
  Our aid to developing countries is now running at about £240 million a year. The annual increase—increase alone—in export credit outstanding has recently been about £250 million, and private capital investment overseas this year may total over £700 million. I make this comparison not to suggest that the identifiable cost of joining the Community can, in effect, be discounted or disregarded; nor that it is similar in kind to outlays on investment or export credit. But it is right, in considering the identifiable cost of joining, to bear in mind the magnitudes involved in our total external account with the rest of the world and the size of the flows of short-term funds. By 1978 the value of visible trade alone, at 1970 prices, is likely to be of the order of £24,000 million.
  Our present and prospective surplus on current account is substantial. Indeed, as I said last week, it has been running at an annual rate of £600 million a year compared with a deficit of £300 million in 1967 when the previous Administration applied for entry. We have profited from a favourable flow of funds. Sterling is strong. We have been able to make very large repayments of short-term indebtedness. The prospect for economic growth is good. Whatever views hon. Members may have about the merits of entry, I think the whole House will agree that, looking ahead, we can expect to enter the Community in a much stronger economic and financial position than many thought possible in recent years.
  Mr. Healey: The right hon. Gentleman is discussing the situation before his so-called mini-Budget last week. What estimate has the Treasury given of the cost to the balance of payments of a consumerled reflation such as he introduced last week? Is the right hon. Gentleman aware that the Economist, which favours entry, believes that the cost of the measures the Chancellor took last week will be £500 million on the balance of payments?
  Mr. Barber: I have not read that in the Economist, but I hope that I may be able to comment without having read it and say that it is absolute rubbish.
  Mr. Healey: Will the right hon. Gentleman give an estimate?
  Mr. Barber: We now have 18 months for industry to prepare itself for entry and to bring the economy to a position where we can take advantage of the opportunities of membership.
  I reject entirely the argument that the costs of membership will oblige us to hold back the growth of the economy. The costs will accrue gradually from the date of entry onwards. They will not fall to be met suddenly, in large amount. The whole purpose of the transitional arrangements negotiated by my right hon. and learned Friend is to enable us to adjust by stages both to the liabilities which we shall be called upon to meet, and also to the changes that will be brought about in our economy. If, as we believe, British manufacturers take account now of the changes that will be taking place from 1973 onwards as our economy is progressively brought within the framework of the new enlarged Community, they will be ready from the outset to exploit the new opportunities.
  I have already referred to the improvements in efficiency and competitive power of the Six. British industry believes, and I believe, that it will fare likewise, with new opportunities, not merely in the enlarged Community—this is important—but also in world markets generally. So we shall be able to meet the costs of entry. I have already explained why I believe that joining the Community will lead to an increased growth rate. It is this which will make it possible not only to pay for the costs of entry but also to provide for a more rapid improvement in our standard of living.
  As we have stated in the White Paper, if the rate of growth were to rise by only half a percentage point—[Interruption.]—this was a point made by members of the previous Administration—by the end of a period of five years our national income would be some £1,100 million higher in the fifth year. At a time when we are suffering from heavy unemployment, it should not be forgotten that in their own national policies the

  51
  Six have been extremely successful in maintaining full employment. With the exception of Italy, where there have been special regional problems, they have all managed their economies at a very high level of employment. This indicates the high priority which they attach to this objective of economic policy.
  In October Parliament will decide whether we go in or whether we stay out. I have never sought to exaggerate the difficulties of staying out. There would be no sudden cataclysmic disaster if we do not join. [HON. MEMBERS: "Hear, hear."] Life would no doubt continue for quite a time, much as at present, with fewer changes than if we join. We would no doubt get along with a comfortable but slow rate of economic growth, proud of our history and boasting of our tradition of civilised living. But let us not burke the reality of the situation as it would develop. We would inevitably be overcome and overshadowed by a larger, stronger and richer Europe. Our political influence would dwindle, and history would pass us by.
  I have today concentrated on the economic consequences of joining. I believe, for the reasons I have given, that the benefit to our standard of living will be substantial. I do not doubt that, after due consideration, the House of Commons will approve our entry into the Community, and when it does so the House will have taken a decision wise and courageous and in the interests of the British people.
  4.26 p.m.
  Mr. Michael Foot: Before I start my comments on the speech of the Chancellor of the Exchequer, perhaps the House will permit me to make two brief comments on two speeches which have been delivered from this side of the House during the course of this debate.
  Everyone who heard the speech of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) will agree that it was a most formidable speech. It was formidable, because he combined in the speech qualities of character, intellect and eloquence. I honour him for those qualities, however much I may disagree with the course that he is recommending for the country.
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  I believe also that my right hon. Friend the Member for Battersea, North (Mr. Jay) mounted a most formidable case, one that certainly has not been answered in the Chancellor's speech today. As we have now reached almost the end of this debate on this great subject, some of us are wondering how that part of the case is to be answered. I think that the best course would be for the Government to agree to the proposal which was made by my right hon. Friend the Leader of the Opposition for a Select Committee to examine these details of fact.
  There is, for example, the question of the missing £500 million, which the Chancellor says was absolute nonsense, but which the Economist and most other newspapers have quoted and which can be worked out, as it was worked out by my right hon. Friend the Member for Battersea, North. Indeed, my right hon. Friend puts the figure considerably higher. [Laughter.] Those figures should be examined by a Select Committee.
  The same applies to the case made by my right hon. Friend the Member for Stechford, and this part of his speech was reinforced by the speech of the Chancellor of the Exchequer, if that is the right term to use. The right hon. Gentleman referred to the figures of expansion of the export trade and the intra-trade of the Community as one of his main arguments for the deductions to be drawn about the way the Community has worked. Those figures, according to a statement by Mr. Anthony Harris in The Guardian today, have been produced in a Cabinet study paper. Perhaps they were available to the previous Cabinet. No doubt they are available to this Cabinet. I do not see why they should not be made available to the House of Commons so that we can all discuss them. I believe, therefore, that the more that hon. Members have listened to this debate the stronger has become the case for a Select Committee to try to examine some of these matters.
  The Chancellor of the Exchequer showed one sign of penitence, if I can put it that way. He said that he was not one to scoff at those who took different views from his own on the subject of the Common Market. A week or two

  53
  ago in the Daily Telegraph there was a headline:
  "Barber scoffs at Six Doubts".
  He is reported as saying:
  "… if Christopher Columbus had waited for proof before setting sail, we might still think today that the earth was flat."
  I am sure it will be recollected that Christopher Columbus set out to discover China, thought that he had discovered India and, in fact, had discovered America—which is just about the degree of accuracy attempted in the White Paper. On the basis of this White Paper, Christopher Columbus would never have got the money to start the expedition at all.
  Let me give some illustrations of that charge. We are asked to "take note" of the White Paper. That is what the Government have invited us to do. I should like first to take note of some of the parts of the White Paper which we regard as extremely unsatisfactory, quite apart even from the major question of the missing £500 million. Let us take the question of the European Coal and Steel Community, which some hon. Members opposite suggest we should not discuss. They say that these are matters which the Mother of Parliaments should not worry her pretty little head about, because they have decided this matter. I should like to dispose of those claims or defences against the proper examination of the subject.
  The Government say that we do not need to discuss this subject because there is no difference in the application as it affects coal and steel from the application that was made in 1967. It is very flattering for members of the previous Cabinet to be told by the present Government, "Anything you can do we cannot do better." That seems to be their claim. But it does not seem to be a perfect defence. Moreover, it is not the case that the situation is the same. In the case of the steel industry, the situation has greatly changed since 1967 in the sense that there is in readiness to be put into operation a major development plan which will cost £4,000 million over a period of years. What we have asked is that the right hon. Gentleman should tell us whether, in the negotiations, the question whether this programme could be carried through under the provisions of the Treaty was raised. I will say in
  54
  a moment what was the kind of answer we got. Certainly they cannot argue that the situation is the same as it was in 1967.
  The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon): 1970.
  Mr. Foot: The right hon. and learned Gentleman should have been here when the Secretary of State was arguing on Thursday. He was arguing that the claim put in now is on the same basis as that made in 1967.
  Mr. Rippon: It is the claim put forward on the basis of the 1970 statement by the then Prime Minister that the 1967 White Paper remained the basis of the Government's attitude.
  Mr. Foot: I understand that. I am comparing that matter with what was said in the debate, that it was the same as 1967. I am discussing the excuses made by the Government as to why we should not examine this matter in more detail.
  The second defence that is made is that we do not need to examine it in detail because the heads of the nationalised coal industry and the nationalised steel industry are in favour of the agreement that has been made by the Government and that, therefore, it is not necessary for us to examine it in detail. I say that those two defences are not satisfactory for the House of Commons. We must discuss these matters in greater detail. I say this partly because the Government, for some extraordinary reason, have sought to prevent the House of Commons from having the information that was made available to them. Thanks to the reports in The Guardian by Mr. Mark Arnold-Foster, but with no thanks at all to the Government, there is in the Library of the House of Commons at the moment some account of those negotiations. I must say that if ever slipshod, slatternly negotiations were carried out on behalf of this country, they were these. I can prove it. Any hon. Gentleman who doubts what I say can consult those parts of the documents which are in the Library of the House of Commons.
  What those documents say, amongst other things, is this. Originally the Chancellor of the Exchequer, when he was in charge of the negotiations, asked for a

  55
  joint working party with representatives of the Community to decide the matter. That was turned down by the Community. They said instead that they wished to draw up a list of the operations of the European Coal and Steel Community which were incompatible with the operations of our nationalised industries. They drew up this list, and it is formidable. The list deals with a large number of matters which are of current importance to this country. The Prime Minister boasts about how he stopped the steel price increase. That action would not have been possible under the arrangements which are now being agreed. It may be even that the so-called guidance which the Government are giving to the nationalised industries as it affects coal and steel would not be compatible with the undertakings which they are asking the House to make on these subjects.
  The High Authority of the Community insists that it has the right to decide questions arising from dispute between the private and public sectors of the steel industry. That is of some importance. Then the High Authority insists that there shall be, as the right hon. Gentleman admitted on Thursday, no forms of subsidised investment in these industries, but they also say in effect that the steel industry of the country has been sustained by a form of subsidised investment. That is what they say in the report.
  I suggest plainly to hon. Members opposite, as indeed the Government admit in their own White Paper, that the status, the position, of the Coal Board and the Steel Corporation in their relation to this House and the Government would have to be altered by major legislation if we went into the Common Market. These are facts. The House of Commons should examine these matters in detail. I cannot understand why the Government who gave us details of other matters in the negotiations have refused to give us details on this. The steel industry is as of much interest to Britain as dairy produce is to New Zealand. Why should we not have the details presented to us? I invite the Government to publish in full the negotiations which they have had on this subject, which are available in part in the Library of the House of Commons, and hon. Members can confirm by con-
  56
  sulting the documents the truth of what I have said.
  Meantime the Government ought to withdraw the so-called popular version of the White Paper that they have issued on this subject, apart from all the other subjects. They say
  "The Coal and Steel Community. If we join, there will be no interference with the size or status of the British Steel Corporation or the National Coal Board."
  That is, on the basis even of the Government's own White Paper, either a direct lie or a colossal display of ignorance. Perhaps the Home Secretary will explain which it is.
  It is nice to see the right hon. Gentleman the Home Secretary taking part in these Common Market debates, if I may give him the welcome of the red carpet. There has been a lot of talk about politicians coming off the fence in this issue. In the case of the Home Secretary maybe the fence just collapsed. At any rate, it is nice to see him. We shall welcome him later in the debate as another herald of the new dynamism with which we are going to be led into Europe. But there are those of us who will always retain an affection for the right hon. Gentleman in his earlier incarnation. As I see him. I always think of the limerick:
  "There was an old bear at the Zoo,
  Who could always find something to do.
  When it bored him, you know,
  To walk to and fro,
  He reversed it and walked fro and to."
  We are very happy to see the right hon. Gentleman, and, since consistency is now elevated to the very highest place in politics, we are eager to see him defend his position on the Common Market tonight. Perhaps he will explain some of the serious matters which were dealt with not at all or, in my judgement, not dealt with properly by the Chancellor of the Exchequer in his speech today.
  The question of regional policy touches all the rest of the policies which the right hon. Gentleman tried to describe to us. Capital movements, the lowering of tariffs, all the other measures which are taken to deal with the situation—all these affect what will happen in the shaping of regional policy, and this is why some of us are so suspicious or so anxious about the situation.

  57
  When he spoke about those matters on Thursday, the right hon. Gentleman the Secretary of State for Trade and Industry said that we really need not worry very much about regional policy. It was a subject very near to his heart, we understood. Judging from the way he talked, one might have thought that he had dedicated the whole of his commercial and political life to helping lame ducks over stiles. But we cannot be reassured on that basis. We must discover what are the real possibilities and the probabilities for the regions of this country.
  The whole case of the Government and of those of my right hon. and hon. Friends who state their argument so strongly for entering the Common Market rests on one major base, the base which the Chancellor of the Exchequer elaborated upon in his speech today. It is the claim that there will be a much better chance of growth in the economy, a much better chance of expansion in the economy, a much better chance of investment, and investment at a fairly early stage, if we join the E.E.C. But all these claims are based on the further assumption that we shall be able to sell many more exports in the highly competitive market of Western Europe. That is the basis on which all the other advantages rest. If that were to collapse, all the other advantages would collapse as well.
  In that situation, there would fall upon us all the costs which we have to bear in the abolition of our tariff advantages in some parts of the world, with the E.F.T.A. and with our own Commonwealth, all the burdens which we have to carry even though they are not properly specified, under the Community budget, and all the other disadvantages, many of them not spelled out at all.
  I interpolate here a comment on what the right hon. Gentleman said about the great advantages for American investment in this country if we go into the European Economic Community. Very well; he is entitled to put his argument, but he ought to deal, for example, with the case which has been put to me very strongly by workers in Dagenham and elsewhere. One of the reasons why the Americans in Detroit decide to invest in Dagenham rather than in Cologne is that they can sell a lot of Ford cars in the Commonwealth and in the E.F.T.A. with the advantages of the existing trade
  58
  agreements there. I believe that Ford Motor Company sells about 80 per cent. of its exports to markets outside the E.E.C. If those advantages go, it may well be that Detroit, in considering where to make future investments, will decide to expand the Ford factory in Cologne rather than in Dagenham. No doubt, if that happens the Government will put all the blame on Jack Jones and ignore what they themselves have contributed. That is an example of the problems which must be faced.
  Most of the costs and burdens of entry into the Common Market have not been spelled out properly in the White Paper, and this is one reason why we urge that there should be a Select Committee to go into the matter. But, coming back to the question of regional policy, I repeat that all the advantages will be lost if we do not get the extra exports to Western Europe, and all the costs and burdens will then fall upon us, without the benefits.
  This is where regional policy comes in. What will happen if, in the next two or three years, industrialists go to the Department of Trade and Industry and say, "We are potential exporters, we are potential investors in exports. So that the enterprise may succeed, we must have export assistance in order to get into Western Europe, and we want to put our new factories in the South or in the Midlands, far away from Scotland, Wales and the other difficult regions"?
  This is always an awkward choice. It is a difficult choice in any event when a Government have to decide where they will back investment. But, by the very fact of entry into the E.E.C, the Government in that situation will be heavily weighting the advantages against the regions.
  We who come from these areas know very well how difficult things are even when a Government have good will towards them in wishing to pursue a policy for their benefit. My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who spoke most impressively on this subject the other day, said quite correctly that what one needs in the regions are policies of discrimination and advantage to assist us at a time of expansion. Without the expansion, the discriminations cannot greatly assist us. I entirely agree. But what we fear—what

  59
  I fear—will happen in the next two or three years if the whole direction of Government policy is to assist exports into the Common Market is that the regions will be starved of the essential assistance which they need.
  The argument about the regions is not solely directed to whether particular instruments will be available to the Government. What matters is the economic climate in which the Government have to make decisions. This is what so largely determines whether the regions will be assisted at all. If by any chance the Government's calculations are wrong on the question of the regions if we enter the Community, what will be the position then?
  Many of us have had great experience in these matters—for example, my right hon. Friend the Member for Kilmarnock (Mr. Ross) and others of my right hon. and hon. Friends who come from the regions. Most of the regions are represented by Members on this side. If our fears rather than the Government's vague expectations are proved correct, there could be political as well as economic consequences, and the political consequences could be serious indeed for Wales, for Scotland, for the North-East and for Northern Ireland.
  It would be a strange irony, but not an impossible outcome, if the measure which is designed to solder us more closely within the European Community had the effect of splintering the United Kingdom. But I believe that that could happen. [Interruption.] I say it could happen. Hon. Members may say that it is supposition, but it is not suppositions that we have suffered in the regions and the development areas from the consequences of market forces being let loose. Millions of our people have been driven out of their homes and out of their communities by the forces. This is what we fear, and this is why we say that there must be assurances on regional policy very different from the derisory few paragraphs which are all the Government have offered us in the White Paper on this subject.
  That brings me to another aspect of the matter on which the Chancellor of the Exchequer dwelt today. He spoke of the "larger market" almost as though those magic words could be used and
  60
  immediately greater trade would follow. But to secure access to larger markets it is not necessary to have overlapping political authority. If it were, this country would not have learned to trade with all the world. Countries like Switzerland, Sweden and Japan would never have secured access to larger markets if to do that it were necessary to extend political authority as well.
  Important as they are, economic tests are not the only tests to be applied. We must judge these matters also by what we believe will be the consequences for the political and democratic life of the people of Britain. Judging by their recent performance, I have no great respect for the way in which the great blocs and the super-States have conducted their affairs. They may be exploring the universe, but they do not seem to be very good at protecting the elementary liberties of their people. In one sense it is almost safer to walk on the moon than through the streets of Washington and New York. So much is it the case that the larger political authority in the United States has removed democratic control from the people, that the Executive of the United States has gathered to itself such power and authority, that it has landed the United States in the most disastrous and ruinous war in its history.
  This happens east and west. What is happening in the world, though hon. Members on both sides do not always seem to recognise it, is that, east and west, many proud peoples, many nations, are seeking to escape from the blocs rather than to enter them.
  The problem for this country is not only the economic problem of how best we can gain access to larger markets or retain the larger markets that we have. It is also the question of how we are to enhance and strengthen our democratic institutions. That is the primary lesson of the 1960s when we see the violence that has occurred in so many parts of the world, in Prague, Paris, or wherever we may care to look. This is a paramount question for the British people.
  The sharpest barb that the anti-Marketeer in my party can direct against me is to say that I am an anti-internationalist. I repudiate the charge, but I should like to spend a few minutes in doing so. I said in the House some 25 years ago—and it was not very popular to say it—that we

  61
  should give up some of our own food to give to the Germans; so I have some right to speak on that case.
  It is essential for us to have good relations with France. I hope that my right hon. Friend the Leader of the Opposition will not hold it against me, particularly at such a promising moment in my political career—I hope that he will have enough sympathy for a rising young politician to understand—when I say that I have a soft spot even for the inefficient French farmers of Provence and the Dordogne. I like their coqs au vin for one thing. Long may they live in sustained subsidised splendour, but I hope that it is not xenophobic to say that I do not understand why the people of Ebbw Vale should have to pay for them.
  As for Italy, so far from my being anti-Italian, I feel that anyone who does not share my love for the Italy of Rossini, of Stendhal, of Casanova and the rest, of Garibaldi and Matteoti can go and jump in the foaming Tiber.
  So it is not necessary for us to argue on that basis. But neither is it necessary for us, in order to live peaceably and prosperously with our European neighbours, to adopt from them institutions which may be well suited to them, and which they may justifiably think may suit us, but which have not been designed to suit us. Certainly one of the institutions that we shall have to alter fundamentally is this House and this Parliament. If the Government claim that the advantages of entry into the E.E.C. are such that we should diminish the sovereignty of Parliament, they should say so openly, but it is not proper for them to suggest to the people that there will be no erosion of sovereignty. Of course there will.
  This is a subject on which the Home Secretary can reply to us. Next year, if the House votes for the proposition, next year a huge mountain of legislation will have to be passed, dealing with some of the nationalised industries, as I have already hinted; questions of regional policy; questions of competition between different forms of traders; all the matters already dealt with under the Treaty of Rome. A mammoth amount of legislation will have to pass through the House, almost all of it unamendable, I understand—the Home Secretary will correct me if I am wrong. If that legislation
  62
  has to be passed through almost in its entirety, almost without qualification, because the Government have in effect bound us in advance to accept it, who could say that the sovereignty and authority of this House had not been diminished? Of course they would have been.
  Mr. Ian Lloyd: Does not it follow logically and ideally from what the hon. Gentleman is saying that a legitimate aim for the British people should be to alter equally fundamentally the European Parliament which we are joining?
  Mr. Foot: I should be very glad if the Home Secretary, as the Government's authority on these matters, would spell them out, too, and tell the British people how far and how fast the Government will support the proposition that we advance to a single currency; how fast they will support the proposition that we advance towards a federal Government in Europe; how fast we shall advance to all the other different propositions. The people of this country have a right to know. Many of us believe, not because we are chauvinists or anti-internationalists, that in this country on the whole—I do not want to say this in a boastful manner, but I say it none the less—the liberties of ordinary people have been better protected under this Parliament than in most other countries. We do not want to see those liberties taken away from us, particularly by a Government who are not even explaining the matter to us. It was a great Frenchman, greater even perhaps than M. Pompidou, Jean-Jacques Rousseau, who said:
  "Liberty diminishes where the State enlarges."
  That may very well be the case. [Interruption.] Yes, indeed, and that is why some of us on this side have argued for the strengthening of industrial democracy and the rights of ordinary people in their factories and local government and elsewhere to exercise their democratic rights. That is why we say above all else, and will continue to say—[Interruption.]—despite all the jeers of hon. Members opposite, that some people in this country will defend the rights and traditions of this Parliament and its chance to defend those liberties in years to come.

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  In my judgment the country is facing a very serious question in that respect. The supporters of entry surely want to take us in with the support of the people of this country. The Prime Minister has said that on occasion. I think that he was very wise when he said it, but I wonder how he will translate it into practice. Nothing would be worse for the great adventure, this most historic decision that we have been told of, and for the years to come, when many resentments and difficulties will have to be dealt with, than that we should enter with a majority, or even a substantial minority, of the British people feeling that they were cheated in the operation. There are ways of settling this question. It is not a new matter; it arose in the Labour Party in 1962 over exactly the same question of entry into the Common Market.
  Many of my hon. Friends on this side will recall as well as I do the speech in which the then Leader of the Labour Party, Mr. Hugh Gaitskell, described what he thought was the constitutional position facing not merely the Labour Party but the country as a whole in such a position. I beg leave of the House to quote what he said. Every word of it is apposite now.
  "Why then is the British Government in such a hurry? I think I know the answer. They had a timetable. They wanted to get this thing agreed, to sign the Treaty of Rome, to force the legislation through Parliament, to get the whole thing finished and complete before the British people could have an opportunity to comment upon it.
  I repeat again my demand: If when the final terms are known, this party—the major Opposition party, the alternative government of the country—comes to the conclusion that these terms are not good enough, if it is our conviction' that we should not enter the Common Market on these terms, so that there is a clear clash of opinion between the two major political groupings in the country, then the only right and proper and democratic thing is to let the people decide the issue. … Of course, Mr. Macmillan has given a pledge in his broadcast. He said: ' When we know the final position, then it will be for us here in Britain to decide what to do.' For us here in Britain? Who does he mean? Does he mean the Government? Or the Tory Party? Or the British people?
  We are now being told that the British people are not capable of judging this issue—the Government knows best; the top people are the only people who can understand it; it is difficult for the rest. This is the classic argument of every tryranny in history…We
  64
  did not win the political battles of the nineteenth and twentieth centuries to have this reactionary nonsense thrust upon us again."
  I say in conclusion, primarily to my right hon. and hon. Friends—more perhaps than to some hon. Members opposite, although I believe that the debate will continue throughout the country—and in particular to those of my hon. Friends whose opinion I respect but which differs from mine, that one cannot help to build democracy for Europe by undermining it in Britain. But I am so little of a "Little Englander" that I still believe that if we can rebuild it here and enhance it here and transform it into what we on this side of the House call Socialism, then we can save it everywhere, and that is the proper summons for this country.
  5.3 p.m.
  Mr. Duncan Sandys: As I think the House knows, my views on this question are somewhat different from those of the hon. Member for Ebbw Vale (Mr. Michael Foot). I have been campaigning for some 25 years for European unity. I am, therefore, naturally delighted at the imminent prospect of Britain's entry into the European Community.
  The economic case can be stated quite simply. We are offered the opportunity to secure an internal market, with a common tariff and common economic policies, embracing some 300 million consumers, with all that that implies. It may be said that bigger is not necessarily better. Size by itself will not guarantee success. But there is no doubt that a large home market is an enormous asset for a country like Britain, which exports technologically advanced products requiring vast expenditure on research and development.
  The case for joining, as my right hon. Friend the Chancellor of the Exchequer has said, is greatly reinforced by the solid evidence of the progress achieved in recent years in the Community. Since the Common Market was formed, there has been a remarkable acceleration in economic growth and a significant rise in living standards in all the six countries. While there may have been some other contributory factors, there is very little doubt that this spectacular improvement is in the main due to the benefits of economic union.

  65
  There has been much argument about the precise terms which have been negotiated. The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) said that they were not ideal but were acceptable. In international negotiations the result is never ideal. One cannot expect to get everything one asks for. But, having taken part in the first round of the negotiations with my right hon. Friend the Prime Minister, I am sure that these terms are as good as any Government could have obtained; and I congratulate my right hon. and learned Friend the Chancellor of the Duchy of Lancaster on an outstanding diplomatic achievement. In any case, it is no good at this stage discussing how the terms might have been improved. These are the terms and we have either to accept them or reject them.
  As has been said—and the hon. Member for Ebbw Vale said it again today—this is a momentous and historic decision. But there are some who do not seem to appreciate that a decision to say "No" would be just as momentous and just as historic as a decision to say "Yes". This offer is not going to remain open. The opportunity once missed would be unlikely to recur for a decade, or perhaps a generation. In the interval, Britain and the Community would have developed along entirely different lines which would make economic union incomparably more difficult, if not impossible. Therefore, those who warn us that a decision to go in would be irrevocable should realise that a decision to stay out would, for all practical purposes, be irrevocable also.
  A variety of opinions have been expressed about the effect on our balance of payments of joining the Common Market. The completion of the negotiations has removed a few of the uncertainties. But, as my right hon. Friend explained today, there is really no way of estimating with any precision—and this came out clearly in the last Government's White Paper—the dynamic effect of the enlargement of the Market upon our exporting industries; and that, of course, is one of the basic factors in any balance of payments calculation. I am sure—and I think that anyone who thinks about it seriously will come to the same conclusion—that a Select Committee
  66
  would be faced with exactly the same difficulty.
  I fully share the confidence expressed by my right hon. Friend, which incidentally echoes the earlier assessment of the Leader of the Opposition, who said in the House in 1967:
  "… I believe that within a very short period the balance of payment effects … could be not negative but excitingly positive for Britain."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1084.]
  I do not believe that anything has happened in the interval to invalidate that opinion. In the end it comes down to a question of national confidence. Are we afraid that in a free market Britain would not be able to hold her own? If we have faith in ourselves, surely we should welcome the challenge and grasp the opportunity which Europe offers.
  Many hon. Members have spoken about New Zealand. Since my mother was a New Zealander, I naturally feel a special affection for that wonderful country. I remember as Commonwealth Secretary going to Wellington in 1961, before the start of our first Common Market negotiations. I expected the New Zealand Government to demand every kind of assurance and safeguard. In fact they asked for nothing. They merely said: "We trust Britain. We know you will not let us down."
  Committed as I am to the European idea, I could never have brought myself to support terms which betrayed New Zealand's trust. I was therefore greatly relieved when my right hon. and learned Friend managed to secure such a favourable arrangement. The terms have been rightly welcomed, not only by the New Zealand Government but also by the New Zealand dairy industry
  The hon. Member for Ebbw Vale referred in the closing part of his speech to public opinion. The opinion polls, as we all know, have for some time shown a large majority against joining the Common Market. But that is not surprising. Having had the door shut twice in our faces, one would hardly expect great popular enthusiasm for a third application. But now that the negotiations have been successfully completed, there are already signs that public opinion is shifting quite rapidly. By the autumn there may well be—and personally I believe that there will be—a majority in favour

  67
  of joining the Common Market. But either way—;
  Mr. Arthur Lewis: In view of the racket being made by those in favour, it is not surprising.
  Mr. Sandys: The hon. Member will have the opportunity to express himself later on.
  Mr. Lewis: No, he will not.
  Mr. Deputy Speaker (Sir R. Grant-Ferris): Order. We cannot have sedentary interjections. If the hon. Gentleman wishes to intervene, I am sure the right hon. Gentleman will be generous.
  Mr. Lewis: The right hon. Gentleman made an incorrect statement.
  Mr. Deputy Speaker: The right hon. Gentleman has not yet given way, but if he does I am sure—;
  Mr. Sandys: He is not likely to give way.
  Mr. Lewis: On a point of order, Mr. Deputy Speaker. I want to raise this matter with you. It was a matter I raised during the first two days of the debate. I have taken careful note of all the speakers called in this debate and all the regulars known to be pro are being called. It is now two to one in favour of the Government, excluding the two Front Benches. There is a deliberate attempt to show favouritism on the part of the Chair.
  Mr. Deputy Speaker: In that case the hon. Gentleman knows his remedy. This is not something we can discuss now.
  Mr. Lewis: I am going to put down a Motion.
  Mr. Sandys: I was saying that by the autumn—;
  Mr. Lewis: Have a look at HANSARD.
  Mr. Jeremy Thorpe: Shut up.
  Mr. Lewis: I am not going to shut up. The facts are that favouritism has been shown.
  Mr. Deputy Speaker: The hon. Gentleman knows parliamentary business very
  68
  well and he knows he must not make those remarks.
  Mr. Lewis: Yes, Mr. Deputy Speaker, and I know that people have been promised, they have gone to the Chair, they have been told when they are to be called, they make their speech, go out and never put in an appearance again. Hon. Members who are regularly here are not being called, and there is a two-to-one bias on the part of the Chair in favour of those for the Common Market. I shall put down a Motion quoting the facts and figures.
  Mr. Deputy Speaker: I now have to ask the hon. Gentleman to withdraw that remark about bias from the Chair. If he wishes to do anything about this, he must put down a Motion. He must not make offensive remarks to the Chair, and I ask him to withdraw.
  Mr. Lewis: It is in HANSARD. The record is there.
  Hon. Members: Withdraw.
  Mr. Lewis: I am not going to withdraw. It is on the record in HANSARD, two to one being called in favour of this Motion. Hon. Members who want to take part in the debate cannot get called.
  Mr. Deputy Speaker: Unless the hon. Gentleman seeks to withdraw that remark now, I am afraid I shall have to take serious action against him, and I should dislike having to do that very much indeed. I ask him to withdraw the remark since he must know that the House never allows offensive remarks to be made against the Chair. The hon. Member may find himself alone in this assembly unless he does as I suggest.
  Mr. Lewis: I have found myself alone throughout the whole of the debate. The figures are in HANSARD. I will put down a Motion. In view of the fact that I will put down a Motion quoting the numbers and names, I will withdraw.
  Mr. Deputy Speaker: I think the hon. Gentleman would be wiser, if he is to put a Motion, to withdraw his offensive remark now. Will he withdraw it now?
  Mr. A. E. P. Duffy: He has said he will withdraw.
  Mr. Barber: The hon. Gentleman said that he will withdraw the remark he made and that he intends to put down a Motion.
  Mr. Deputy Speaker: I accept that. Mr. Sandys.
  Mr. Lewis: Perhaps you will look at HANSARD yourself, Mr. Deputy Speaker.
  Mr. Sandys: Before this interruption, I was saying that by the autumn the opinion polls may well show a majority in favour of joining the Common Market. But, either way, we should not allow this to dictate our decision here in Parliament. I cannot believe that the British people really want Parliament to be reduced to a glorified computer, which churns out decisions in accordance with the data fed into it by Gallup polls. That is not the rôle of Parliament.
  Those of us who were in this House in the 1930's and were then pressing in vain for rapid rearmament to meet the Nazi threat will never forget how both the Government and the Opposition shamefully shirked this vital issue, in deference to public opinion which had not yet awoken to the danger of war. Whatever the opinion polls may say, Parliament cannot shuffle off its inalienable responsibility to do what it considers to be in the best interests of the nation.
  A number of hon. Members have spoken about the political aspects of this question. The European Economic Community, as its name implies, is concerned with economic matters. Any decision to create political institutions to deal with foreign affairs or defence would require the positive approval of all the members. It could not therefore happen without our consent. But that does not mean to say that political union is not desirable. For my part, I sincerely hope that economic integration will lead progressively to political integration. The time has long gone by when small or even medium-size States like Britain can successfully pursue independent foreign and defence policies. To exercise effective influence and to provide effective security, larger groupings and joint action are essential.
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  Nor should this necessarily stop at regional associations. It may well be that a United Europe will ultimately constitute one of the major components of a real world authority which, sooner or later, will have to be created, if a succession of ever bigger and ever more calamitous wars is to be prevented.
  The right hon. Member for Stechford was right to stress the importance of strengthening the ties between the Federal Republic of Germany and the free world. It would be unwise to assume that West Germany could never, in any circumstances, be detached from her European and Atlantic partners. It is conceivable that, at some favourable moment, Russia might offer her the tempting prize of German reunification, in return for neutralisation and withdrawal from the European Community. I do not say that the Germans would accept such a deal. But, if they did, it would undermine completely the whole structure of Western defence. Any such danger would of course, disappear with the creation of a politically united democratic Europe, in which the Federal Republic would play an important part and which East Germany might one day be free to join.
  Our aim should be to build a unified Europe which, in the name of all our peoples, could claim a seat at the top table and share in the great international decisions. That does not mean that Europe can act in isolation, since her safety depends as much as ever upon the continued cohesion of the Western world, whose defence is indivisible. Without American support, the free nations of Europe would be completely at the mercy of Russia's incomparably superior military power. It is, therefore, an illusion to think that Europe could, if she wished, play the rôle of an independent "Third Force", performing a kind of balancing act between the United States and the Communist bloc.
  President Kennedy spoke of a partnership resting on two pillars—the United States and United Europe. There can be no real partnership between a super-Power and a collection of smaller nations, each pursuing separate policies and speaking with conflicting voices. The concept of two pillars likewise makes no sense unless it supports an arch. The arch is the Atlantic Alliance.

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  After the war, Britain laid down the responsibilities and power of a world empire and brought to an end a great and honourable chapter in her history. Since then, we have been unconsciously looking for a new rôle to replace the old, a new and inspiring objective, a new sense of purpose. A nation's rôle cannot be chosen from a catalogue. It is determined largely by factors outside its control—geography, economics and security. In all these respects, Britain is an integral part of Europe and, whether or not she joins the Common Market, her future destiny is linked inextricably with that of her European neighbours.
  We can, if we like, turn our back on Europe and work out our own salvation by ourselves. If we do, as my right hon. Friend the Chancellor of the Exchequer said, Britain will not collapse. But she must be prepared to accept retarded economic growth and dwindling influence. Alternatively, we can help to build a United Europe, which will possess material resources and political power of the first order. As a leading member of that great association, we can share in its expanding prosperity and once again play our part in shaping the course of history.
  5.25 p.m.
  Mr. Peter Shore: It is always stimulating to be called immediately after a speech from the right hon. Member for Streatham (Mr. Sandys). That is not to say that I find myself in agreement with what he says very often. Rather, it is the case that, more than most right hon. and hon. Members, he seems to articulate more clearly the aspirations and the underlying emotions which lie behind the more sensitive and careful formulations of the propositions that we are debating.
  The right hon. Gentleman brought into question such matters as whether we have sufficient faith in ourselves—which was one of his earlier phrases—whether the small and medium-size States of today are viable in the world of today and tomorrow, whether the future lies with large regional blocs which, in the case of Europe at any rate, the right hon. Gentleman admits will not really be a regional bloc of the same calibre and power of the Soviet Union and the United States, or whether the future is to lie with inter-
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  national organisations built not necessarily out of a small number of regional blocs but upon the much more natural module of the nation State. That is one of the great arguments about the future in which all of us who are interested in this matter should concern ourselves.
  At a later stage in my remarks I shall pick up again one or two of the points made by the right hon. Gentleman. Meanwhile, almost with reluctance, I leave his speech to address one or two remarks to the almost empty Treasury Bench where the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster normally are to be found. Both right hon. Gentlemen have played a very important part in the negotiations. Apart from the Prime Minister, they more than anyone else have some very important questions to answer.
  I begin by addressing myself to the absent Chancellor of the Exchequer. It is no good his simply assuring this Parliament and this nation that we can expect the same consequences to flow from membership as have followed from the membership of the original six member States. The reason why it is extremely unwise for us to expect the same consequences from our membership are these. Not one of the original Six was a member already of two preferential trading systems. When Italy, France and Germany came together with the Benelux countries, they did not, as they joined and formed that club, withdraw from other trading clubs in which they were preferentially situated already.
  These trading clubs, in the case of Britain in relation to the Commonwealth and E.F.T.A., account for one and a half to two times the trade which we now carry on with the Common Market. This, as everyone knows, is a major factor in the equation. It is a little difficult to quantify, although efforts have been made to quantify it. The only problem is the reasonable ranges. It is not a question that in principle it is impossible. Otherwise, how do the Government think that negotiations in the past have been carried out with the Kennedy Round, and so on? Were we all in a complete fog? Had we no idea where our national interests lay? Had we no idea at all what the consequences of the lowering of one set of tariffs and the raising of another would

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  be? Of course we had. The right hon. Member for Barnet (Mr. Maudling), who, I understand, is to wind up the debate tonight, knows it better than most.
  So I come to the second point of great difference. When the Six joined together a most important thing happened. They got rid of their tariffs. When they joined in 1958, the tariffs were extremely high. The tariffs of France and Italy over the whole range of manufactured goods were 35 to 40 per cent., and those of Germany, while not so high, were still substantial. As those tariffs came down, those countries enjoyed the benefits of greater competition, greater specialisation, and so on. But those circumstances will not apply to us. The reasons are well known.
  As a result of our successful negotiations to get rid of tariffs, because we are now at the end of the Kennedy Round, the tariffs which we had to get rid of are very much lower. It is not a question of British tariffs being 30 per cent. or even 20 per cent. The average British tariff at the end of this year will be about 10 per cent. Incidentally, the average tariff over which we have to climb in the Common Market countries is 7½ per cent. Therefore, we must be honest. In so far as the dynamic effect depended upon the winning of an open market and on the removal of quotas, tariffs, and so on, we already enjoy from the outside 50 per cent., if not two-thirds of all the benefits which we could reasonably hope to get from entry.
  When the Secretary of State for Trade and Industry, who is not present, in a speech earlier this year, which he had obviously forgotten because he indicated dissent this afternoon, said that he expected that we would do less well in the transitional period because the straight trade effect on the balance of our exports and imports would be adverse, he was speaking of the effect of pulling out of one trading system in which we are preferential members and going into another where the benefits are not so great. The Government know that the calculations show that the balance will not be so good. If that were the only problem we would probably try to live with it, but it is not.
  This brings me to the more important and onerous obligation which the Government have negotiated, which was
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  touched on in the Chancellor of the Exchequer's speech this afternoon. I refer to the commitment from the end of the transitional period to accept the permanent system of financing which the Six worked out and only agreed among themselves in February, 1970, and afterwards. It did not exist in 1961–63 when the Government last negotiated or in 1967 when the application went in from the then Labour Government.
  At the beginning of 1970 the Six worked out this system among themselves, and the Chancellor of the Exchequer, when he was playing the rôle of the Chancellor of the Duchy of Lancaster and went to Luxembourg on 30th June, 1970, to open negotiations, commenting upon that system, said that if he appeared "to labour the point" it was only because unless such a solution is found, a fair solution, a sound solution,
  'the burden on the United Kingdom could not be sustained and no British Government could contemplate joining."
  Mr. Rippon: I am sorry to have missed the earlier part of the right hon. Gentleman's speech. From the outset it has been understood that all that we could seek is what we have obtained—namely, transitional arrangements. If the right hon. Gentleman will look, as he has so far refused to do, at HANSARD of 19th February, 1970, column 187, he will see that the Government of which he was a member—indeed, a member of the Cabinet—expressely stated that their position was as set out on 4th July, 1967, and that they had no further observations to make.
  Mr. Shore: I have indeed looked at all that. I am prepared to run over the ground with the Chancellor. However, if that is his understanding, it is very odd that the Chancellor of the Duchy, from whose speech on 30th June, 1970, I have just quoted, should have gone out of his way to make such a fuss about something which, if he believed it to be the case, had already been conceded and was in his view non-negotiable; namely, that only transitional terms could apply.
  I think that I can speak with some authority on this subject. The permanent financing system of the Six was not accepted by the Labour Government. The paragraph 43 half sentence of the February, 1970, White Paper which the right hon. and learned Gentleman tried

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  to quote to me is refuted in the next paragraph, it is refuted again in the introductory part of the White Paper, and it was specifically refuted by my right hon. Friend the Member for Dundee, East (Mr. George Thomson) in his speech in the debate in February, 1970, and by the then Foreign Secretary.
  I do not wish to labour the point. I understand why the right hon. and learned Gentleman now wishes to try to suggest to me, though apparently not to the Six some months ago, that we had accepted in advance what he has conceded. His right hon. Friend did not concede it. He said, if words have any meaning, that he wanted something special, something different, something which was not just a transitional arrangement.
  Why should the right hon. Gentleman go to such lengths? For the simple reason—the Chancellor of the Duchy knows it very well—that the permanent system which the Six agreed among themselves would result, on the best estimates that we could make, in Britain imposing on herself a three-tax system and handing over the yield of those three taxes across the balance of payments to the Community, to Brussels. It means, to quote our White Paper, the whole of our Customs duties, the whole of our food levies, and a 1 per cent., value-added tax. We found it difficult to put a figure on it, but the best estimate with which we came up was up to £670 million. That was our top figure. That was the prize about which the negotiations were taking place and which the Chancellor's right hon. Friend very properly reserved in full to the Government on day one.
  The tragedy of these negotiations is that the right hon. and learned Gentleman, for reasons which I do not fully understand, obviously thought that he had to accept this system, despite all that it will impose on Britain, and that all he could do was to argue about the length of the transitional period.
  The right hon. and learned Gentleman has been congratulated by his right hon. Friend—I find it difficult to understand why—on his conduct of the negotiations. He came back with a formula which began with a 3 per cent. contribution which at the end of five years was supposed to be between 13 and 15 per cent.
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  Then he wanted three years in which there would be a small increase, and at the end of that, as the third part of his own special package, he was to get a special review. That is what he asked for on 16th December.
  I have costed that package. It is very simple. It came out at about £1,000 million. That was what the right hon. and learned Gentleman proposed we should pay in the adjustment period, the transitional period, across our balance of payments to the Continent. He was proposing that we should pay just £1,000 million, knowing full well that the sum would increase very much after that. The system which he has adopted, even the transitional arrangement which he has accepted, has knocked up the sum—and if I am wrong I ask the right hon. and learned Gentleman to say where—to more than £1,700 million. That is how much we shall pay across the balance of payments between 1973 and 1980 simply as part of our membership fee, as our contribution, on a rising scale, in the knowledge that from 1980 onwards the best guess available is that we cannot be asked to pay less than £400 million a year in perpetuity.
  That is the heart of the matter. That is what the negotiation has been about. The right hon. and learned Gentleman shakes his head. It has never been difficult for this country to join the E.E.C. We could have done it in 1956. If this nation had been prepared to do what even the French could not conceive we would do, and that was totally to accept every possible condition which the French demanded, we could have entered the Community at an even earlier stage.
  It has always been a matter of how to reconcile very different sets of interest which arise out of our histories. There is nothing necessarily wrong or mean about the approach of each side. France has always pursued a policy of self-sufficiency, or near self-sufficiency, in food supply. We, on the other hand, have been an open market for the world's food. We have been part of a great Commonwealth preference system, while the French have been part of a French union. These things are there. They are part of our history, and the problem has always been to bring about a fair solution.
  We have conceded, and the French have got in these negotiations all that

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  they could possibly have asked for, and more. Indeed, one gets the impression that they were so surprised at what they got that they could hardly believe it, and it was not until President Pompidou had spent 11 hours alone with the Prime Minister that he was satisfied. During the meeting he asked the Prime Minister a number of questions designed to find out whether the right hon. Gentleman was really a European—whether he believed in a European Europe and was prepared, in all matters, to give preference to the Continent of Europe over all other claims and interests; whether he saw the future of Europe through the eyes of France; whether, if Britain went in, she would cease to be in any sense a serious challenge to France; whether Britain would be ready to be shackled with enormous burdens at the point of entry, and so on. The right hon. and learned Gentleman smiles in his bland way, but I did not make that speech. That is what President Pompidou said just before he met the Prime Minister for the meeting at which he asked all those questions of him. Those are the questions which he said he would put to the Prime Minister at his meeting.
  What it comes to—and this is why it is so important—is that the C.A.P. and the method of financing it involves this immense payment by us. The system is called the "own resources" system of the Community. It involves the alienation of revenues—a major constitutional matter. These taxes and their yield cease to go to the Treasury. They go across the exchanges to the Community of Europe. British people are taxed by a body over which they have very little, if any, control. This agricultural and financial system involves the cutting back of all the food supplies that we have enjoyed from other countries. It is this, more than anything else, which has made it so difficult to get anything like convincing terms for New Zealand and the Commonwealth sugar islands.
  It is impossible to get those terms securely agreed because they are in conflict with the system of giving preference to Continental supplies, and by the time we come to renegotiate these agreements Britain will not be able to negotiate as Britain. Our negotiating power will have become merged with the power of the enlarged Community. Is not that the
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  essence of the problem? Is not that really why the simple guarantees which could otherwise be required are not given?
  As I said earlier, this is a system which cannot be changed. One thing which the French insisted on before they began negotiations was that the whole of the Six agree with them, and that they agree with them to the point of signing a separate treaty under which their agriculture is to be supported and cannot be changed except by the unanimous agreement of all the member States, which means that there is a veto by France over any such change.
  This is an important development, and the Chancellor of the Duchy of Lancaster and the Chancellor of the Exchequer have both referred to this system. They said at the beginning, and they have maintained it today, that all the arrangements to be worked out would be fair to this country. I say that they cannot be fair to Britain because the very nature of the system which they have introduced—a system which finances agriculture from food levies and from Customs duties—must bear more heavily on this country, which imports half of its food, and which does 70 per cent. of its trade outside the enlarged Community, than on any other member country.
  Does the right hon. and learned Gentleman dispute the figures put forward by his own officials in the summer of last year? They reckoned then that Britain would be paying 46 per cent. of the total food levies, and one-third of the total customs duties, that in all these payments in and out at the end of the transitional period we would be paying £400 million a year net to the Community, that France would be gaining £300 million net, and that all the others would be paying plus or minus, but to a very smaller extent.
  People ask one to explain the fact that France wants Britain in the Community. I have not detected any great change in French policy, but I have detected some big changes in British policy. I should be amazed at any French Government who refused to take in a Britain that has solved the problem of her farm surplus, that has provided a guaranteed market almost to the end of time for French agriculture, that is paying this fantastic annual ransom across the exchanges, and that has accepted, without the possibility

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  of change, an arrangement which I very much doubt has been accepted by any nation in human history, other than a nation at the end of a war. I am amazed that this should have been agreed to by us, but I am in no sense surprised to see it warmly welcomed by France, and that brings me to my last point in this economic argument.
  This is a much more important point, because it spreads over from the economic to the political. I have always accepted that nations with different interests should stick up for their interests, as we must do for ours, but have a reconciliation where this is possible. But given the known effects on us of this system, and given the great losses that we shall sustain by going into the Common Market on the terms that have been indicated, I find it a very worrying and unconvincing demonstration of the meaning of community that the first expression of membership to us should be to negotiate terms which smack more of the Treaty of Versailles than of membership of the Treaty of Rome, membership of a community of friends and allies.
  If I am wrong about what I have said, I invite those on the Treasury Front Bench to prove it. Let them open the books. Let them have whatever form of inquiry they think is right, so that we can put our heads together. If the right hon. and learned Gentleman can convince me that I am wrong I shall be happy to be so convinced, but let us have the facts.
  It is because these terms are so bad that one has to ask why the Government have been so determined to press ahead, why they are in a sense ignoring what I believe to be the facts and evidence of which they are aware? The answers lie very much in the remarks of the right hon. Member for Streatham.
  This whole argument and the attraction that so many people feel for going into Europe is based on uncertainty about the power of this country in the world of today and, as they see it, the world of tomorrow. They are worried about it. They feel that we have less power than we should like to have as a nation and they are trying, perhaps partly because of this, to persuade the British people that we have very little power at all.
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  A lot of this worry about power is a misreading of our situation. It takes two forms. First, there are those who worry about the economic power of this nation. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) had a great deal to say about sitting as one of a group of ten and feeling uncomfortable because he had to wait while the Five sorted things out for themselves. But in many ways the logic of his line of thought is that he should not be there at all. If the Community goes ahead and forms a monetary and economic union, as it intends to do, over the next 10 years, there will not be a British Chancellor of the Exchequer in a group of ten at all. The group of ten will simply become a group of five. What I find extraordinary is that among the nine are countries like Sweden and Switzerland, which will be only too pleased to continue there.
  It is one of the paradoxes of the postwar period that, while a great deal of the physical power that this nation used to possess in the world, based upon our great position in different parts of the world, has declined, the ability of the people and Governments in this country to shape, control and civilise the economic forces which until very recently totally dominated them has grown enormously.
  When we are faced with unemployment today, such as we have had this last year, we can say, and know it to be true, that it is up to the Chancellor to decide whether or not that level of unemployment will continue. Twenty, thirty or forty years ago—certainly in the pre-war period—that power did not seem to lie with economic Ministers at all. Nations were in those days much more the victims or the servants of an economic system than they are today.
  Therefore, I do not believe that our ability to exercise economic power effectively on behalf of our people has diminished. On the contrary, it has greatly increased. I certainly have in mind the kind of worries which still beset so many of my friends when they consider very large international companies.
  Second, political power has been reduced for this country. But where one is concerned with the problems of security and defence, the position is remarkable. One would think that we

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  were an island totally alone, unallied with others. But for twenty years, we have been linked—some of us think over-linked—in vast military alliances. This country is not alone or isolated.
  I have very little belief in the new doctrine, which has been insinuated rather than asserted, that today one needs units of 200 to 300 million people in order to have either prosperity or security. I do not think that this is so. I am convinced that we can have much more effective organisations to deal with genuinely international problems and that there is still plenty of scope for the individual nation States to deal with their own problems.
  I do not fear to be excluded from the Common Market. This fear of exclusion is one of the driving and dangerous forces which is at work throughout the whole of this debate.
  5.55 p.m.
  Mr. Michael Grylls: When the right hon. Member for Stepney (Mr. Shore) talks about dynamic effects, many people will remember his time at the Department of Economic Affairs, and wonder whether he is very well qualified to talk about dynamism.
  Even if some doubts remain in the minds of our constituents today, I believe that a majority of people think that, by 1973, Britain will be a member of the Community. It may not yet be universally welcomed, but I believe that it is universally accepted.
  The certainty of the United Kingdom's entry was evident when a number of us went to the European Parliament the other day. We were not yet European parliamentarians, but we were treated as such, and the warmth of our welcome was very great. It was moving and encouraging for all of us, whatever our politics, to meet these European parliamentarians for a few days. The hon. Member for Gower (Mr. Ifor Davies) rather surprised everyone in one of our discussions by starting to speak in Welsh. I believe that it was welcomed, although it caused some embarrassement to the translators.
  No one can fail to respond to the excitement of that assembly—the ideal behind the Parliament of six independent nations working for a European solution
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  to all their problems, a multi-nation Parliament sitting in party groups and not as national delegations. Britain must be there to play a leading rôle in building that Parliament into an influential and virile assembly.
  Our adhesion to the E.E.C. will do more than just increase the size of the Market—important though that may be. We shall bring with us our unique Commonwealth connections, which will be better for Britain, better for the Commonwealth and better for Europe. These mutual advantages of British entry are clearly recognised by all European parliamentarians, with perhaps the sole exception of the Communists in that Parliament, who alone in Western Europe today have nothing to gain from a strong and unified Western Europe.
  Europe and Britain have suffered cruelly through division and wars, particularly in this century. Most of us can remember the horror of those occasions. But today, the world is dominated by the super-Powers. A united Europe of 10 leading countries will have a real influence in the world. Alone, none of us can be influential. None of us today is powerful enough to wield real influence, but together we can really influence world events, and decisively, for the good.
  Surely it must be accepted—I believe that it is being increasingly accepted throughout Britain—that Britain will wield more influence inside than outside. A Europe without Britain would be unreal. A Europe with Britain will speak with a voice of experience and political stability. Who can fail to applaud such an opportunity and such an exciting prospect?
  But a word of warning. Great opportunities only come once. If, through doubts or lack of confidence, as my right hon. Friend the Member for Streatham (Mr. Sandys) said so well, we fail to grasp that challenge, history will judge us very harshly. Future generations will justifiably say, "They had little faith in 1971".
  As the debate rolls on and people understand more what this issue is all about, let us move forward and have confidence which this great nation has traditionally had in great matters. Let us take our place in Europe. That place is available to us now. Let us play a real rôle in Europe and the world that our

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  civilisation, greatness and experience have undeniably fitted us to play.
  6.0 p.m.
  Mr. Tam Dalyell: My right hon. Friend the Member for Stepney (Mr. Shore) asked why the French wanted us in the E.E.C. I recollect putting the same question to a super-technocrat at E.S.R.O. at its space research organisation.
  Piere Blasel, of the Ecole Poly-technique, replied, "It's like this. Some of us scientists in Europe"—and he was speaking for a wider community than scientists—"are unhappy about the way in which a number of European Governments and institutions are developing. We feel that you British have a great deal to contribute to the whole range of problems, and the style of Government we have in Europe". Such is the relationship between the State and the individual.
  I hope that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will not take it amiss if I say that one of the major contributions that we can make to Europe is to bring to European debate and politics people like my hon. Friend the Member for Ebbw Vale, with his sparkling wit and sense of irreverence. That would certainly be extremely welcome in the European councils.
  Indeed, I would welcome the presence of a cat from Ebbw Vale among the European pigeons. The solemnity of debate is one of the disadvantages for a pro-European, like myself, in envisaging European politics, so that the presence of my hon. Friend on the European scene would be most welcome, and good for Europe.
  If I speak about West Lothian, I do so not out of a sense of narrow parochialism but because I suspect 30 or 40 constituencies are in exactly the same position as we ore. For example, we were an area of coal and shale mining. My hon. Friend the Member for Lanarkshire, North (Mr. John Smith) will agree that his constituency is like mine in many respects. These mines closed down and, in the 'sixties, we saw a remarkable transformation, with many new jobs coming in. A sizeable number of these were brought in by international com-
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  panies.Indeed, what we would have done had it not been for the activities of Hewlett, Packard, Cameron Iron Works, Signetics International, and a number of others I do not know. One can point to British international companies like British Leyland, I.C.I., B.P., B.H.C., and others which are in the same investment bout.
  There is a tremendous problem of conflicting loyalties. One of my strongest loyalties is to the young people of the constituency which has sent me to Parliament for nearly ten years. I dread to think what will happen to these young people and their careers, for fewer of their jobs will be in West Lothian if we reject entering the E.E.C.
  I went along to talk to these international companies, American or British based. They say "We are, if the United Kingdom does not enter E.E.C, not going to withdraw. We do not want to exaggerate the case. Nor do we intend to close down overnight. Perhaps the next time round we will go ahead with our expansion plans, but you must understand that the time after that we will probably want to go to the larger markets, perhaps at Liege or Dortmund". I wonder what development areas like West Lothian will do if possible investment decisions are not implemented as a result of our not going into Europe? The jobs situation would be worse, much worse.
  This may all seem negative, but I have more positive reasons for taking a pro-Market view. As one who has taken an interest in the affairs of international companies, I have seen only too clearly what happened during the six years of Labour Government, and I have no reason to doubt that they will be any different under the Conservatives.
  For example, time and again some companies have threatened that if certain of their conditions were not met, they would go elsewhere, where those conditions would be met. There are some international companies which do not pay as much attention to pollution and the needs of the environment as they might. Other companies are very good. The not-so-good ones tend to say, "If you cause difficulty and lay down stringent conditions about pollution and the amount of waste that may come from our factories,

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  you can say good bye to the jobs that we would have provided, and we will go elsewhere". Currently, such companies are going to Belgium.
  By those sort of arguments they are able to wield a powerful stick. To combat this stick and indeed to overcome postures which trade unions might dislike, we must have a large properly organised and coherent Community, because if we are alone we will be in great difficulties in our relations with the international company. If Socialism in one country has considerable difficulty, so does advanced technology in one country because advanced technology knows no frontier. It is for this and many other reasons that I support our entry into the E.E.C.
  Several Hon. Members Several Hon. Members rose—;
  Mr. Speaker: Order. I understand that there has been an undercurrent of criticism of the Chair in regard to the calling of hon. Members to speak. I am not sure of its extent or whether it goes beyond one particular hon. Member.
  Part of my duty is to secure the equitable distribution of time. In the first two days of this debate, those from the back benches who were for entry into the E.E.C. had 198 minutes, while those against had 204 minutes. Those who were doubtful had 51 minutes. I am keeping a careful eye on the equitable distribution of time. Sir D. Walker-Smith.
  6.6 p.m.
  Sir Derek Walker-Smith: The White Paper is a short document, but this is a wide debate. It seeks to answer the question whether, in the context of the full facts and best estimates, the conclusion arrived at in the White Paper is correct. It is, therefore, a wide issue embracing every aspect, and it is by no means restricted to those matters which the Government saw fit to reserve for negotiation.
  For myself, I have always been convinced that this great issue must be resolved not in the narrow ravines of particular interests, still less in the tortuous crevices of political calculation, but on the great broad plateau of the public interest, not only of this generation but of those to come.
  If that be so, then we observe at once a strange paradox in the White Paper. It
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  is concerned basically with two matters. One is the great abiding question of what is called the case for entry, while the other is secondary and mainly transitional; namely, the outcome of the negotiations. However, the content of the White Paper is in inverse ratio to the importance of the subject matter, with 103 paragraphs on the smaller matter and only 33 on the greater.
  Brevity, it may be said, is not necessarily a defect; and that is so, provided always that it stems from precision and not from omission. Here that is not so. The White Paper, or the part dealing with the case for entry, combines both faults. It is neither ample nor precise.
  Too many glosses and generalisations are contained within it. It has too few firm facts and figures and too many hopes and aspirations, eloquently expressed but imperfectly justified. It makes too many claims, based not on evidence and evaluation but on surmise and speculation.
  It was because I feared—rightly, as it turned out—that there might be a temptation to issue a White Paper more propagandist than informative, more hortatory than analytical, that I felt it right to table 18 Parliamentary Questions asking for the inclusion of certain specific and factual matters. They covered, in addition to horticulture, in which I have a constituency interest, and medical and nursing matters, in which I have a post-Ministerial interest, a number of matters on which the decision should hinge and on which hon. Members have not only a right but a duty to be precisely informed. The answers, I regret to say, were disappointing, negative, unhelpful. I asked for bread, and they gave me a stone. I asked for precision, and they said, "Wait and see"—but wait until it may be too late. In the result, the White Paper is defective and the position is unsatisfactory.
  Time allows only a few brief examples. On cost, the White Paper has been widely and effectively criticised for lack of any proper cost benefit analysis. There is no, or no sufficient, assessment of the balance of payments position; no, or no sufficient, assessment of the gain and loss on the tariff position—the effect of the remission of the common external tariff for a quarter of our exports set against the loss of protection in the home market

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  and the loss of preferences in the Commonwealth and in E.F.T.A.—because how can we expect our friends to treat us better than we treat them?
  These vital matters are, incredibly, relegated to a footnote at the bottom of page 13 of the White Paper. The total effect of increased food prices and of this new pay-more-eat-less principle are not quantified. The inevitable effect on industrial costs and exports is shrugged off. As for the contribution to the Community budget—after all, even an estimated £200 million per year represents a third of the biggest surplus we have ever achieved on current account in the balance of payments. But would it be only £200 million? That is at best the estimate for 1977, but what about the period thereafter?
  What about the optimistic view taken in the White Paper of receipts? Again, I sought to clarify the matter by way of Parliamentary Questions, asking for a statement of any expected receipts from the Community budget, specifying the basis of calculation and the degree of certainty or otherwise. "Wait for the White Paper", I was told. But all the White Paper says, in paragraph 42, is
  "… after allowing for our estimated receipts from the budget …"
  But what receipts, and based on what estimate?
  At present, nearly all that budget goes to propping up the common agricultural policy, an out-of-date, inefficient, costly and socially divisive system. Britain can only hope to be at the receiving end if there is a substantial restructuring of agriculture in the Community. So, once again, I deemed it my duty to ask for a statement on the position and prospects of restructuring and the estimated effect on receipts. But we have not got it. M. Pompidou, however, has obliglingly filled the gap which British Ministers delicately left open. He told his constituents, in effect, that matters had gone far enough.
  We should have known the answer without M. Pompidou's help. Why should Western European farmers change their familiar ways, why should they risk the hazards and assume the burdens of innovation, when the British taxpayer will pay them to stay as they are? Of course, they will not, and their votes will ensure
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  that they cannot be compelled to do so. We shall go on paying, not a subscription, as it is sometimes called—because the principle of a subscription is equal contribution for equal benefits—but a penalty; and if it be right, as we are so often told, that British entry will be good for the Community, why should we pay a penalty to do them good?
  Then there is this wishful thinking on the long-term effects—unproven, speculative, contingent as they are, part of a miscellany of assorted Market myths—that they will put everything right. They will compensate, we are told, for dear food, high costs, lost preferences, budget penalties, and the rest. On this aspect of the White Paper, let us call Mr. Anthony Bambridge, pro-Market economist, writing in the pro-Market Observer. This is what he says:
  "It is in its attempts to assess this dynamic effect that the White Paper falls down. It simply does not bother."
  He goes on:
  "I want to believe it, I really do, but without a shred of evidence how can I?"
  How, indeed, though this is a disability from which some of my right hon. Friends and some right hon. Gentlemen opposite seem to have managed to extricate themselves.
  Mr. Bambridge refers to the
  "… 300 card carrying economists of Whitehall…"
  as he puts it. He says that they should have quantified the dynamic effects. Does anyone think that they would not have done so if there had been any such effects to be quantified? Does anyone think that they would not have been eager to earn their keep, with Ministers breathing down their necks—Ministers who have scratched and scraped so sedulously for every scintilla of evidence that could support their case? Of course they would, but they have not. And they have not because it cannot be done.
  The puzzle is this: how comes such a document from responsible economists at all? This puzzled me until last Thursday, I thought that I perhaps had the answer, when The Times published this list of distinguished names, this advocacy of entry which came by courtesy of the affluent European Movement, this galaxy of the stars of sport and stage. And then I thought, "Yes, elementary, my dear Watson. These

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  are"—and I think I get the idiom right—"the credits for the White Paper. These gentlemen are the authors of the White Paper, what time the Government's 300 economists have gone to try their hand in Show-Biz."
  To say that the case is non-proven is a classic understatement. One appreciates that future prospects may not be susceptible of precise proof, but there must be a reasonable balance of probability. I do not ask, and I have not in the last 10 years asked, for that standard of proof to which I have been accustomed in the courts. But surely we are entitled to the same standard of care and prudence as people exhibit in their own affairs; and who would make a decision, with so much at stake, knowing that even those most ardently wishing to believe confess themselves unable to do so on the evidence?
  Again, time allows only the briefest reference to the constitutional aspect. On this, the White Paper contribution is a travesty. Its authors have taken all the old red herrings out of the larder again and have scarcely bothered to dust them over before serving; really, they should be put in the deep freeze, because they are getting a bit high.
  We shall still have our criminal law and our family law, we are told—as if anyone had ever said anything to the contrary. What we say is that there is a serious and unacceptable sacrifice of sovereignty over a wide range of our economic and social life.
  Nor is the reference to the basic question of commitment in perpetuity any better. The treaty, we are told, contains "… no provision expressly permitting or prohibiting withdrawal". But what the British people want to know is whether, if things turned out badly, as many fear they will, could we then legally and honourably withdraw without the consent of the other members? The answer is that we could only legally withdraw if the other members were to recognise such a fundamental change in circumstances as would vitiate our original consent—and what prospects is there of that when, by that time, the Community budget would be based on a substantial British contribution?
  Much better, surely, if the White Paper had been frank. Much better, surely, if it
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  had said, "We hope that this will not happen: but, if it does, we are faced with the unwelcome alternative of soldiering on or of dishonouring our bond by unilateral repudiation".
  Finally, on the erosion of sovereignty, the White Paper says that there will be no erosion of essential sovereignty. Obviously that begs the question. It depends on what is meant by "essential". The White Paper should have set out the facts instead of taking refuge in that bland and unproven assertion.
  The treaty is quite clear, and the in-stitutions and rules of the Community are geared to give effect to it. Over a vast range of our economic and social life, tariffs and trade, taxation and social services, agriculture and transport, and much else, we would have, in the language of the treaty, to approximate our municipal law to the law of the Community, or, in plain words, where they are in conflict, to subordinate our national law to the law of the Community.
  We should also have to submit to regulations of the Community. Article 189 is quite clear, and there is no unanimity rule, no right of veto, to protect us there. We should have to incorporate those regulations in our law with no power of material amendment. No erosion of essential sovereignty forsooth! There has been no bigger erosion of the power and function of Parliament since Cromwell contemptuously sent the House packing 300 years ago and more.
  The verdict is inescapable. The White Paper has failed, and the failure of its presentation reflects the weakness of the case. Its message is clear, though it is not the message that the Government hoped it would give. The message is one of urgent warning. I ask the Government to pay heed to it while yet they may. Let them now say to the Six, in all dignity and friendliness, "We want close cooperation with you, but not at the price of losing so much we cherish and hold in trust. And so we must seek that cooperation along other, and less stony, paths".
  6.22 p.m.
  Sir Geoffrey de Freitas: I do not agree with most of what the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) said, but I

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  agree that the White Paper is a most disappointing document. In particular, it does not in any way meet the points raised by the right hon. and learned Gentleman, not for the first time today, about sovereignty.
  Having heard all but a few minutes of all the Ministers speeches and having studied the White Paper, I am also disappointed that there is so little evidence of preparation being made for entry into the Community. I illustrate that in this way. I have asked this Government, as I asked the previous Government, what they were doing about new roads linking the industrial East Midlands with the east coast ports in view of the expanding trade. Sure enough, this Government, like the previous Government, have plans for such roads. That is good enough; but it is nothing like going to the heart of the matter and making political preparation.
  Paragraph 76 of the White Paper states that we shall
  "… play a full part in the management and future development of the Community."
  Neither in the White Paper nor in Ministers' speeches has there been any indication that the Government have thought about the problems posed for us by the European Parliament, to which the hon. Member for Chertsey (Mr. Grylls) referred. I am worried about this. In 18 months time, according to the schedule, the first British delegation of Members of Parliament will arrive in Strasbourg for a meeting of the European Parliament. What has been done to study the way in which this institution works?
  Many of us who have taken part in joint meetings of the European Parliament and the Assembly of the Council of Europe have learned a great deal. I have certainly learned that the conditions of European national Parliaments are very different from ours. No Continental Parliament is anything like as demanding on its members as we are on our Members. With this background, we must realise that our Members of Parliament in the European Parliament would have to be at Strasbourg for at least 50 days a year for sessions. I have said Strasbourg, but the committees meet also in Brussels and Luxembourg. They prefer Strasbourg because of the French cuisine in German-sized portions. But they have to go to
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  other towns for political reasons inside the Community. Not only are there the 50 meeting days of the sessions but, for committees, up to another 50; that means 100 days of meetings in Strasbourg, Brussels or Luxembourg. It was rather a left-handed compliment by my hon. Friend the Member for West Lothian (Mr. Dalyell) when he said to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) that he thought he should go to the European Parliament. After all, we sit for only 166 days a year, so we should not have much of my hon. Friend the Member for Ebbw Vale if he were playing a full part in the European Parliament.
  Understandably, the Whips are much concerned because of these absences. What are we to do about it? We cannot possibly work such a system or spare this number of Members of Parliament, 36, for these long periods. Even with the far less exacting Assembly of the Council of Europe there are problems, especially at a time such as 1964 to 1966, when there was a tiny Government majority.
  Two years ago the European Parliament threatened legal action in the European Court of Justice against the Council of Ministers for not having introduced legislation ensuring the setting up of a system by which people were elected directly to the European Parliament. I am told that the Committee of Representatives is studying these problems. But what discussions have the Government had with it? In 18 months' time, according to the present schedule, there will be a British delegation there. The object of any discussions that the Government must have must be to strengthen the European Parliament not only in its legal competence but also in its composition. It must be strengthened if we are to do more than pay lip service to democratic control over the executive organ. We must not forget that in May 1969 the British and Italian Governments made this statement:
  "The European Communities must be sustained by an elected Parliament."
  I do not know how this direct election would be achieved. I complain of lack of attention to the problem.
  Many suggestions have been made and I have read of them in learned journals and in debates of the European Parliament. One of the most widely canvassed

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  is that, to begin with, half the members would be from national Parliaments and the other half would be directly elected from the countries concerned. That would mean 36 people elected from Britain. It would mean constituencies with a population of about 1½ million. We have no experience of that. This is a most serious point. The Americans are the only people I know of who have long experience of this. What have they had there? A situation has been reached in which a millionaire has a very long start in the race for the Senate because the expenses are so enormous. How would we get across even the names of the candidates in a constituency of 1½ million? We are not accustomed to that in our system.
  I hope that one of the points that we would start with in any discussions would be to look at the German system, by which Government funds go to the parties to finance elections. Right from the beginning, we would ensure that no problems were being created which might turn out like the American problem, and none of our people elected to the Parliament would be subsidised by private interests.
  My right hon. and hon. Friends may be interested to know that the Socialist Group at the European Parliament is now the second largest group there. If the Four were to join and there were to be Ten, the Socialist Group would most certainly become the largest group. This is important if there is to be more Left-wing opinion. There are the Liberals, the Christian Democrats and an independent group. It would be very important to have the Socialists as the largest group, and we ought not to overlook this fact.
  Now that my hon. Friend the Member for West Lothian has returned, I shall follow up one of the points that he made. He referred to the difficulty of controlling international companies when it came to their interests conflicting with social amenity, especially in the matter of pollution. A very strong Socialist Group in the European Parliament would be able to play a great part in bringing about governmental control.
  Many hon. Members, especially my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), have spoken about the Community's attitude to aid to developing countries. This subject is
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  important, because there is a great deal of misunderstanding here. There are frequently references to an inward-looking Six.
  Ten years ago I left the House and went to Africa to become a High Commissioner. One reason for that was that I was very concerned with the development of developing countries, especially in agriculture. I had been a delegate at the United Nations in 1949 when it was first established as a point of principle that the rich had a duty to the poor in international affairs.
  I was disappointed that in Africa the Conservative Government, which I served, did not do more. Since I returned to the House, I have been disappointed that the Labour Government, which I supported, did not do more.
  The important fact is that the debates on aid which have taken place in the Assembly of the Council of Europe and in the European Parliament have shown that there is no danger whatsoever of the Six being inward-looking. Its record of aid to developing countries is very good. It has been the pressure that these parliamentarians have brought to bear on their Governments which has made aid part of their political life today.
  U Thant five years ago in the Assembly of the Council of Europe, speaking as an Asian on behalf of a world organisation, warned the European members against the dangers of sinking back into, as he put it, "prosperous European provincialism" when the rest of the world needed Europe's help and experience. We in Europe who have so much have much to give. We must not forget that the world is a living community of our fellow men.
  In my constituency I often speak on the subject of aid. I put the case in two ways. First, it is our duty as a rich country to help the poorer countries. Second, our enlightened self-interest is in raising the standard of living of the poorer countries. We make steel and footwear. I emphasise to my constituents that they cannot sell steel products and shoes to people who live in mud huts and go around barefoot. This important point is fundamental to the arguments which are now going on in the Community itself. There is no sign of any turning in. The Community is looking out.

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  Incidentally, in the direct prospect of employment my hon. Friend the Member for West Lothian referred to his constituency by way of illustration and I will do so, too. For steel, I am content to accept from the Chairman of the British Steel Corporation that there is a great advantage to the steel industry in entry to the Common Market. For footwear, I am content to accept the view of the Director of the Federation of British Footwear Manufacturers who has seen the British industry which was first 10 years ago, overtaken by the Italians and by the French, and now says:
  "The question is, not ' Shall we survive in the Common Market?' It is, rather, 'Shall we survive if we do not enter the Common Market?'"
  [Interruption.] I am talking about the footwear industry in my constituency and about the man who is nationally concerned with this.
  One general point: the anti-Market climate is changing as people realise that so good has the European Community been for the workers on the Continent that all the non-Communist trade unions, and many Communist workers, not only welcome the Community but welcome British workers to share the benefits.
  To sum up, I much regret that the Government have given so little thought to the enormous implications of the European Parliament. I just do not know how we shall work it. I refer not only to the great difficulty of providing representation from the House but to the opportunity of ensuring an elected European Parliament free from private financial subsidy.
  I believe that if we enter the Community there will be advantages to Britain in general and to my constituents in particular, whether as workers in particular industries or as consumers.
  Apart from the advantages to us, there are also the advantages to the Community in democratic development and in what we can do to preserve peace. First, we would bring what is so much needed in Europe—a long experience of peaceful democratic development. We have achieved the rare distinction of a highly-developed society in which most of our restraint is self-imposed restraint. Second, we would bring tolerance. We
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  have always had dissenters, and we have always respected them. Third, British political and economic power strengthens the post-war settlement in Europe, because in that post-war settlement the greater part of Germany was brought into the democratic West and within a few years was allied with us, the leading democratic European country.
  When my hon. Friend the Member for Ebbw Vale, in a brilliant passage, said how much he liked France and drew the consequences from that and how much he liked Italy and drew the consequences from that, I wondered whether somebody would interrupt and point out that somebody—I do not know who it was—said that he liked Germany very much, so much so that he liked to see two Germanies. However, this is a serious point. We are embracing Germany and leading her towards us. We have done so since the war. It has been said today that there is no sign at the moment that Western Germany will break from the West. There is not. However, we must remember that the Germans are by far the largest and most powerful people in Central Europe, and, indeed, in the whole of Europe. Now that we have this chance, I believe that it is very important for us to throw our whole weight into Western Europe.
  My last words are to remind my hon. Friends that it is no accident that our entry into the Community is welcomed by all the Socialist Parties of the Community—that is, by the Socialist Parties of those countries which suffered most under Hitler's Germany.
  6.37 p.m.
  Mr. W. R. Rees-Davies: We have just listened to a very thoughtful speech by right hon. Member for Kettering (Sir G. de Freitas). That is the type of speech one expects to hear from the right hon. Gentleman, but I think that he was premature in inviting the Government in a White Paper or in the general line of debate to explain at this stage how we are to meet the problems of the development of a future Parliament of Europe.
  I accept that they are real problems. They must be met. Having been one of those Members with interests outside the House, I am certainly girding up my loins to forget them entirely if we join the Community, and I think that many

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  other hon. Members, some of whom I see present, may well have to do the same.
  The day of the professional politician in Britain is clearly upon us, by which I mean the person who will have little or no time for outside interests, particularly if he intends to participate in European parliamentary affairs.
  I do not intend to deal with the White Paper, nor the negotiations, nor the other matters which have been so fully and admirably debated over the last three days and which will be debated in the country.
  I intend to state why from the very outset I am so heartily committed to our entry into Europe. I begin with the words which are often quoted which were spoken by Winston Churchill and which certainly set my imagination alight when he said them:
  "If Europe were once united in the sharing of its common inheritance, there would be no limit to the happiness, to the prosperity and glory which those three or four hundred million people would enjoy."
  The White Paper says this:
  "In a single generation we should have renounced an imperial past and rejected a European future. … Our power to influence the Communities would steadily diminish, while the Communities' powers to affect our future would as steadily increase."
  I am convinced beyond the shadow of a doubt that both quotations are entirely true. After the war, when I first entered and took some interest in politics, I remember going to Nottingham and saying that in the diminishing ties of an old empire, we should try to create a new, third empire—a sterling empire lying between the dollar empire on the right and the rouble empire on the left—and prepare for the day when there would be a yen empire of the future. Although those days have changed in that sterling will no longer be the common currency, as it would have been 20 years ago had we then seized the opportunity, I believe nevertheless that the rôle of Britain in the future is historic. I believe, too, that as a back bencher I can say, as many members and former members of the Cabinet on either side of the House cannot say, that our rôle will in due course be that of the predominant partner in Europe, to give it the lead that it needs, first of all, in the development of its political institutions. How true it is that we in this country, because of our long
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  civilisation, have recognised and understood, and have always borne the brunt of, the development of democratic government. I believe that the message from those young men on the television last night was the demand that young people the world over, with Britain, should enter into Europe.
  We give the leadership with a true sense of partnership. This applies, for example, in the legal field. The development of company law which must be similar for all the major countries in Europe, as it will be with us, will demand all the abilities of our lawyers to create a form of corporate law which will have a real influence on the development of the judicial system. We shall play a great part at the Court of The Hague. I believe that in the development of institutions which will create the new Parliament which must come, we shall be able, with our neighbours and partners, to arrive at the right form of partnership in deciding which part of essential sovereignty shall be retained by Britain, by Italy and Germany and which part we as partners feel can properly be surrendered for the common purpose. I believe that we shall be the people who will decide the question which the right hon. Member for Kettering asked—how we can fit into a Parliament in Europe with power, and at the same time continue to maintain our own individuality and sovereign powers in certain fields.
  There is not only the criminal law. In fiscal matters we shall develop corporate taxation. There will be one corporation tax. This will be necessary for the development of the movement of goods and the development of companies—the development of the megalithic company and of multi-national companies which will have to cross all boundaries. It is in the development of that company structure that Britain will undoubtedly give a lead.
  All the leaders of finance in the City of London favour our entry into the Common Market. Why is that? It is because they believe that they will lead Europe, that the City of London will be the leading financial centre, and that all those who serve in the City, whether stockbrokers or in insurance or in merchant banking, will have opportunities to join with their co-partners in friendly rivalry in giving the lead that is needed

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  in the creation and furtherance of these institutions.
  I turn to two particular aspects which I do not think have been mentioned. One of our greatest industries within two years will be not the motor car industry but the tourist industry. This is the greatest growth industry in the country, and within two years it will be our leading industry because we lead in hotel and property development. With the opportunities of co-partnership, all those associated with our major companies will be able to develop in France, Germany and Italy, thus bringing to us a vastly expanded tourist industry. We have the skill and know-how to enable us to be of the greatest value in the development of tourism.
  What about regional policy? It may be that the White Paper did not dot the i's and cross the t's here. In fact, it certainly did not. But under the Treaty of Rome the countries pledged themselves to strengthen the unity of their economies and to ensure their harmonious development by reducing the disparities between the various regions and mitigating the backwardness of the less-favoured ones, to promote better living and working conditions for workers so as to lead to the harmonisation of such conditions in an upward direction. They have undertaken to co-operate closely in social matters, especially employment, labour law, working conditions, occupational training, social security, protection against occupational accidents and diseases, industrial hygiene, the law on trade unions and collective bargaining between employers and workers.
  The Commission has already done a great deal in this field. Those countries have their own regional development programmes, but as the Community develop its economic union there is an increasing need for a joint approach to the problems of regional planning. This is particularly acute at the edge of the Community—likewise in our country—in Southern Italy, South-West France, the areas in Germany along the east zonal border and where the frontiers meet. In those areas they have the same arrangement for industrial development certificates; they have the same machinery as we have. Just as those outlying, underdeveloped backward areas in Italy and
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  Germany are now being satisfactorily developed, there is no reason to suppose that we cannot have regional development existing side by side and effective in the United Kingdom.
  It is true that in the Isle of Thanet, which faces French shores, and which has higher unemployment than almost any other part of the country, we shall get a great constituency benefit in the development of this regional area. I have no doubt that we shall be able to have an exchange of firms and goods across the Channel and the development of a regional development policy which we saw in the late 1950s and early 1960s but which we are now denied. The mere fact of that development along similar lines in Europe means that these developments could take place throughout the whole of the United Kingdom.
  In October, 1969, the Commission proposed that annual reviews of regional needs should be undertaken, and efforts should be made to fit regional development schemes in with other Community policies, that a permanent committee of Government experts should be set up to consider mutual regional problems, and that a joint Community fund and financial incentive scheme should be started to encourage investment in deprived regions. By the end of 1969 it had made loans in the Community totalling 1,245 million dollars.
  With regional development on that scale we need have no fear, whether it be the Isle of Thanet or Ebbw Vale, about getting the development of regional policies along similar lines in this country. But those on the right wing of the Tory Party, those who believe in and are not ashamed of the word "empire", should recognise that we have one last opportunity—not as my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) would think, but the other way; we have the opportunity to regain and lead a new world empire, one of four, which will maintain the peace and will develop the progress of the world.
  6.49 p.m.
  Mr. Roland Moyle: We are debating a White Paper that has been tabled by the Government, and, therefore, I do not regard this as an appropriate moment for unburdening myself of any fundamental articles of

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  faith, and I hope that the hon. Member for the Isle of Thanet (Mr. Rees-Davies) will forgive me for not following his argument even to oppose. It was said earlier this year that there was some danger that the Government would bounce us into Europe on a hot afternoon in August when the nation was paddling at the sea. That danger was averted, but we are facing an equally serious one, in that the Government are trying to seduce us into Europe on the basis of providing information that is totally inadequate upon which to form a judgment and arrive at a decision.
  We are being asked to take note of the White Paper. It is such a paltry document that we can do little else. We can see that it is based on two separate arguments. The first is that going into Europe is necessary in order to protect our prosperity. That argument has been put forward with a great deal of force and detail during the four days' debate. The other argument is that we must go into Europe to maintain our security. Yet, in spite of the fact that that is one of the two major arguments for joining the Common Market and is set out in the very first sentence of the White Paper, I can find just one other sentence on the subject of security, plus one paragraph—paragraph 35. That is not an adequate basis upon which to persuade the nation to accept one of the two major arguments for going into the Community.
  I want to put a few simple questions to the Government. First, if we are talking about our security, we may be asked to accept the view that Russia has ceased to be a military threat to the West, and that negotiations for our security should be developed on the basis of reducing the number of forces in Central Europe, together with the number of weapons. That may be true. It is a judgment of Russia that I would accept at the moment, although I am not dogmatic about it.
  If we accept that point of view we should also accept that there must be an organisation, based on the Western alliance, which can group Western interests together in one coherent pattern and put forward one set of negotiating propositions to Eastern Europe, on the basis of which we can secure such a reduction of forces and weapons in Central Europe.
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  I maintain that we have exactly such an organisation in existence at the moment, in the form of the North Atlantic Treaty Organisation. We see from some of the documents now coming from Brussels that that is one rôle that N.A.T.O. sees for itself—acting as the machinery for negotiations between the Western and Eastern alliances. We are entitled to ask the Government, in relation to defence matters, exactly what they feel we can do as members of the European Economic Community that we cannot do as members of N.A.T.O.? That question has been skated over; it is not even alluded to in the White Paper.
  That is not the present Government's attitude towards the process of security in Europe; their attitude is fairly clearly revealed, in outline at any rate, in paragraph 35 of the White Paper, which talks about the defence of Western Europe being based upon the contribution which the United States of America is making—a contribution which it calls generous. It says that the United States is becoming bored or fed up with the burden and is anxious to reduce its contribution to the defence of Europe, and that membership of the E.E.C. is essential to British security.
  If that is so it clearly means that the Government intend that as we enter the E.E.C. this country will have to make a greater contribution in men, money or materials—or all three—to N.A.T.O. That is crystal clear. If a gap is left by the Americans and we are supposed to fill it by joining the E.E.C, we must make a greater contribution. That would be in accordance with the cold war ambience of the Government's White Paper on defence, issued last autumn. We are therefore entitled to ask how much this increased contribution to the defence of Western Europe will cost in money terms.
  The other question is: will there be an increased contribution to the defence of Western Europe in terms of men? All those who have taken part in defence debates in this House in the past few years will agree that at the moment in terms of men, we are making the greatest possible contribution to the defence of Western Europe, consonant with a voluntary system of recruitment to our forces.
  There are only two solutions to this situation. One is a substantial increase in

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  the salaries of our Service men and women in Europe in order to attract them into our Army, Navy and Air Force. If that is envisaged, we are entitled to ask how much the Government think it will cost—because it will represent a burden on our industry. If they are not prepared to tell us that, they must tell us whether they intend to raise the extra men by conscription. That is not such a farfetched scheme as it may seem. Many of my constituents have noted the fact that we shall be joining a group of six nations each of which maintains its military forces by the process of conscription. The Goverment are to make an extra contribution. From where will the men come?
  The Government must know the answer. Bearing in mind the credibility of this Government at the moment it is no use their saying "No, we are not going to introduce conscription if we join the Community." There will have to be an argued case, showing how we are to provide an extra contribution without any of the consequences that I have mentioned.
  The Prime Minister has always said that he has looked forward to a nuclear deterrent based upon an Anglo-French merging of both countries' existing national deterrents. I have always taken the view that he probably wants this to threaten the U.S.S.R. with a nuclear deterrent which will be European controlled. I shall not pursue that argument. I merely say that the Prime Minister may want it in order that the Western Europeans may have a seat at the S.A.L.T. talks which are now going on.
  There is one basis upon which that may take place. We do not know very much about that basis, but it may be that the Prime Minister has agreed with M. Pompidou that if Britain ties herself to Europe's leg in N.A.T.O.—and therefore comes away from the American leg—and is prepared to make over her resources, in terms of technology, to the French—and most observers would admit that our resources are substantially greater than the French resources—the French will come back into N.A.T.O. In so momentous a matter the Government should tell us whether that was one of the agreements reached between the Prime Minister and M. Pompidou in Paris
  They should also tell us whether the problem of France's absence from
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  N.A.T.O. has been solved. I hope that many years before this Anglo-French merging is brought to fruition the S.A.L.T. talks will have reached a successful conclusion. I say that not because I do not want us to be there but because I hope that if Russia and America have embarked on these fundamental talks they will reach a conclusion within the not too distant future I remain optimistic, although the signs are not good.
  Of all the people who have criticised and commented favourably on the terms reached in the negotiations, none has commented on the defence aspect. When we remember that 5 per cent. and more of the gross national product is committed by this country, the Government need to bring forward much more information before the British people can be expected to reach a decision on the matter. It is all very well saying, "The more we are together the merrier we shall be". That may be one of the merry songs of peace the Prime Minister is always singing, but by itself it does not seem to be a credible defence policy.
  There are many gaps in the White Paper, and that is one of the more important gaps which the Government must fill. They must fill it by producing a defence White Paper so that the great debate may be a whole and meaningful one, not just about the chances of greater prosperity but about the question of greater security, so that we may see where we stand on this matter and understand what the bill will be.
  In the past few months we have had a consensus on defence in this country. Basically, the Government have committed themselves to providing defence arrangements at a figure not substantially greater—this is the formal position—than that left by my right hon. Friend the Member for Leeds, East (Mr. Healey) when he ceased to be Secretary of State for defence. By what amount do the Government envisage that this particular bill will be increased as a result of our membership of the E.E.C.?
  One can go through all the terms on a similar basis. It is said, for example, that the agreement on sugar should not be criticised because the parties to the Commonwealth Sugar Agreement have accepted it. This is expecting us to be very naive. The Commonwealth sugar countries asked for bankable assurances,

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  There must have come a time when assurances were reached and the Chancellor of the Duchy said to the Commonwealth sugar countries, "I can do no more for you". Whether that agreement was acceptable to the Commonwealth sugar countries or not, at that juncture they plainly had to say that they accepted it because the next time they went to their bankers and asked for credit to cover the next crop, they would be told that they had not got bankable assurances. If they themselves had said it, what would their position be?
  In the case of New Zealand, can anyone expect that little Mr. Marshall would have gone back to New Zealand and told the voracious Mr. Kirk that he had failed to get a suitable agreement? It is just not credible, tI would be like taking a five-year-old paddling in the shark-infested Timor Sea without an escort. Mr. Kirk is already in process of gobbling Mr. Marshall up and spitting out the bones like pips. Mr. Marshall had to come back with this agreement reached between the Chancellor of the Duchy and the E.E.C. countries and say that he had a suitable agreement.
  Is it really a triumph that we can go on purchasing only 71 per cent. of the food which we have hitherto purchased from New Zealand, food of as good a quality as any in the world and at as good or better prices. Yet this is the ultimate position at the end of the transition period. It is not good enough.
  I think that M. Pompidou saw us coming. Our criticism on this side, I believe, is that the Government played a weak hand weakly. It was a weak hand at the beginning because, at the outset, we were trying to get in, and because this Government are led by a Prime Minister who is determined to take this country into Europe, no matter what the price may be. [An HON. MEMBER: "Rubbish."] Rubbish it may be called, but I believe it to be true.
  The argument which has been put by my right hon. Friends the Members for Stepney (Mr. Shore) and Battersea, North (Mr. Jay) has not been answered. My right hon. Friend the Member for Battersea, North has put his argument forward consistently for several years. As I say, a weak hand was played weakly. We have not got the appropriate terms.
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  There were a number of levers which the Government could have used with the French Government. We could have pointed to the fact that the French are locked up inside Europe with the Germans, and they want our support. We never exploited that. They want our money to subsidise the departure of many of their farmers and the maintenance of the remainder on the land. They want Britain as the cause for further growth in Europe. We exploited none of those considerations.
  The whole position was largely given away. I regard the terms as totally inadequate. I read a great deal of British history, and I cannot help recalling that William the Conqueror once saw that he had just such an Englishman as the Prime Minister in Edward the Confessor, whom he could play for all he was worth. At the end of the day, the conclusion of history will be that M. Pompidou found that he could add another to the many attributes which the present Prime Minister already shared with Edward the Confessor.
  7.5 p.m.
  Mr. Russell Johnston: I hope that the hon. Member for Lewis-ham, North (Mr. Moyle) will forgive me if I do not take up the defence questions which he raised. We have but limited time, and I do not wish to detain the House for long.
  I have attended the debate for the past three days and more, and it has been for me at least a unique occasion. I have been in the House for about 6½ years now, and this is the first time when I have felt, in the Chamber as opposed to Committee, that one is engaging in a really meaningful debate in which, as the hon. Member for Fife, West (Mr. William Hamilton), I think, put it on Friday, there is a real attempt being made to listen and to influence one another. This is a very good thing for politics, though, unfortunately, rather rare.
  I do not believe that this issue is above politics, above party, or anything of that sort. That is nonsense. But, in a real way, it is apolitical and across party, which is very different. A political party has taken a basic political decision. Although I am in opposition—it will be remembered that the Liberals are, perhaps, more experienced in opposition than

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  anyone else—I regard myself as perfectly entitled, although disagreeing with the Government's attitude and policy on many matters, to agree with them on this issue. After all, an Opposition exist not simply to criticise but constructively to offer views.
  How does one reach a decision in a matter of this sort? In his superb speech today, the hon. Member for Ebbw Vale (Mr. Michael Foot) quoted words of the late Hugh Gaitskell in 1962 when he criticised the then Conservative Government for being unwilling to engage in a General Election when the terms of negotiation were achieved. That may well have been a valid criticism at the time, as the Conservatives won the 1959 election committed against entry into the Common Market. But this is 1971, nine years later, and, like it or not, the British public have elected the Conservative Party to Government knowing that, over that period, it has become committed and been determined to secure entry if it could
  I do not regard that as unreasonable or undemocratic; nor, for that matter, do I go along with the remarks made by the right hon. Member for Bistol, South-East (Mr. Benn) on Thursday night when he argued for a referendum. I should have thought more of the right hon. Gentleman if, during the past few years, he had made more relevant observations about reforming the way in which we elect our Members of Parliament in this country. I hope that the right hon. Gentleman the Member for Kettering (Sir G. de Freitas), who spoke about representation in the European Parliament, will remember that we are to enter a Community in which, just as in the E.F.T.A., all the member countries have forms of election to their Parliaments more democratic than we have.
  We have six Liberal Members in the House. If we had a system comparable with anything in those parts of Europe, we should have 70. Hon. Members need not smile at that. There has been a great concentration on proper democratic representation in the countries of Europe, the like of which we do not have here.
  The basic question is whether we want to join with other European countries in trying to work out common policies which we can all accept and which may one day lead—the hon. Member for Banbury (Mr. Marten) put it quite well at
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  the beginning of the debate—to some form of common government. Like Willy Brandt, whose views the hon. Gentleman queetioned, if asked that question I should reply that that is something which I should want to do, and I should want to do it because I believe that in that way we could ensure a far better living standard and a far greater degree of influence for my constituents and for the people of this country than could ever be achieved in a perpetuation of inter-State rivalries, a situation in which we shall inevitably be more and more dictated to by the super-Powers or by the international companies which have been referred to by more than one speaker in the debate, among them the hon. Member for Ebbw Vale himself.
  We have not seen amongst the anti-Marketeers a campaign against Ford (Britain), which does not have a single British shareholder, and whose essential long-term investment decisions are made not in Britain but in Detroit. That is the sort of thing we should be able better to regulate and control within the European Community.
  If it ultimately leads, a long time distant, to a super-State, let it be so. I would expect that, because I do not agree with the conclusion of the hon. Member for Holland with Boston (Mr. Body) who made a very good speech on Friday. He said:
  "I am opposed to the entry of this country into the Common Market because I have no wish to live, or for my children to live, in what must evolve into a super-State. I do not believe that super-States were made by God for the benefit of ordinary people."—
  I hear the hon. Member for Ebbw Vale applauding that—
  "They are the device of politicians who want to walk the world stage and talk of power."—[OFFICIAL REPORT, 23rd July, 1971; Vol. 821, c. 1888.]
  What sort of country have the hon. Gentleman and his family been living in for the past 200 years, but a super-Power, the greatest super-Power we have yet had in the world, which has moulded the shape of the people we are? That is not a sensible way of looking at the question.
  Like the hon. Member for Cambridge (Mr. Lane) and the Chancellor of the Exchequer today, I accept that it is not a great cataclysm if we do not get in; it is not a question of join or disaster but of join or decline.

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  Last week in my constituency, within the space of a mere hour, I saw a couple of motor cars with a little notice at the back saying,
  "Say ' No ' to the Common Market".
  One was a Peugeot and one was a Volkswagen. Why were the owners who were saying "No" to the Common Market in such vehicles? It was because their cars were cheaper, more reliable and better serviced because of the great development within the Common Market. Their sort of opposition is rather like that of those who sign the petition sent round by small traders opposing the entry of a supermarket into their town but who, as soon as the supermarket comes, buy all their goods there. That is not logical.
  Many hon. Members have said how difficult it is to forecast economic trends, although usually their saying that has been the prelude for asking for a forecast of making one themselves. All I know is that the trend of expansion in Europe is clear and has been for the past 10 years, and that the record of stagnation in this country is equally clear over the same period. I and my constituents want to share in the expansion and the work which goes with it. On Friday the Scottish Nationalist Member for Western Isles (Mr. Donald Stewart) attacked the Common Market. There is 27 per cent. unemployment in his constituency. Will it get worse if we join? I find that hardly credible.
  As a Liberal, I believe that it is necessary to develop devolution, but I do not accept that there will be any worsening of regional policies. I am encouraged by what the Community has done in regional development. It has not gone very far in this regard with the proposals made in 1969, because of the great difficulty of resolving the various economic development programmes, but the intention is clear. Belgium was quoted the other day as an example where regional policy has been prevented. That was a notably bad example to quote, because Belgium succeeded in reducing her coalmining industry by about 50 per cent. with the assistance of the Social Fund.
  There are many other things I should like to say, but I have spoken for longer than I had intended. Just one thing more: at the end of last year I read in the newspapers a statement by Dan McGarvey, of the boilermakers' union.
  Mr. Fernyhough: A good friend of mine.
  Mr. Johnston: He said that in any question as between British boilermakers and French peasants he knew what side he was on. To me, as a Liberal, that is precisely what is wrong with so much of the opposition to the Community. What we want to devise is a system fair alike to the boilermaker and the peasant, and that is what I believe we have begun to work towards.
  7.16 p.m.
  Mr. Michael Clark Hutchison: Like my friend the hon. Member for Inverness (Mr. Russell Johnston), I shall try to be brief.
  I have for long opposed our joining the E.E.C. Indeed, I should never have made an application.
  As my right hon. Friend the Prime Minister has said in this debate, and has said throughout, if we enter the E.E.C. it means accepting the Treaty of Rome in its entirety. It is on that basic point that my case mainly rests. The treaty was designed for six continental countries. They did not have us in mind when it was made. The entire set-up under the treaty appears to me to be very authoritarian. I particularly dislike the immense powers given to the Commission. The whole organisation in the Common Market is foreign to my political beliefs, and I believe that it is contrary to British traditions.
  Why has there not been more concentration on the Treaty of Rome. Why is there no explanation of it? Why is it not in the post offices? We are told that it is fundamental, so it is only right that this background should be made freely available to the British people. If they read it, there would be no further debate. It would end at a stroke.
  Three areas merit attention. Under Article 228 we should not be able to make any trade agreement or other agreements with foreign countries or Commonwealth countries. Such agreements would be made by the Commission. I do not know whether all hon. Members realise that. I am certain that the public do not. I do not like that restriction, and I do not see why we should have it. I should never stomach it at any price.
  Then there is the Community Court. It has wide powers which are likely to

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  grow. Its opinion can be sought on numerous cases, and its rulings can and do affect not only companies but individuals. Disputes involving individuals or organisations in the United Kingdom should be settled in London or Edinburgh and not in Luxembourg. I have a strong notion that that is the view of the vast majority of the British people. That is one of the things that sovereignty is about.
  There is also the common agricultural policy. I have always believed in a policy of cheap food. It is immensely beneficial to our nation, which cannot grow sufficient to feed itself. The idea of placing a levy on good Commonwealth or other imported food, paying customs duties on imported manufactured goods and paying part of that V.A.T. into a fund to bolster continental farmers is so crack-brained, so ludicrous, that it amazes me that it has received any attention. The White Paper gives no indication of the effect that the dearer food will have on wage demands and in turn on the cost of our goods.
  Nor does the White Paper give any figures about what effect entry would have on pensioners and those on fixed incomes. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) did not get a very satisfactory reply when he raised this point last week. It is all very well to say that pensions can be increased. Of course they can. But what is the cost? What would be the effect on people like railway pensioners and others above the band receiving State benefits? The White Paper is entirely silent about this matter.
  I have tried to make it clear that my opposition to going into the Community is total and basic. But let us look at the terms. On fishing, there is nothing—except that we seem to have abandoned the 12-mile limit. Queensland sugar would be phased out. Why? I have always been told by the Conservative Party, and in all sorts of briefs I have received over the years, that the Commonwealth and Commonwealth produce would be protected. Commonwealth sugar would not be protected. I hope that the Government take note of that. After all, we were not just told that the developing Commonwealth would be looked after. We were told that the Commonwealth as such would be looked after.
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  There are some terms for New Zealand, but Mr. Marshall himself told me in this building that he wanted to see the arrangements for New Zealand continuous and as far ahead as man could see. He was not particularly interested in alterations after two or three years.
  I feel that our people should think very carefully about this question of entering the E.E.C. I have heard hon. Members and people outside say that they are thinking of their children and their grandchildren. I have both, and I am quite certain that they would want their father and grandfather to vote for Britain's independence and the maintenance and strengthening of her connections with the great English-speaking nations beyond the seas and not go into a small, restricted part of Europe—because it is, after all, only six nations out of 19 in that continent.
  7.22 p.m.
  Mr. Alan Fitch: Whether one is in favour of going into the E.E.C. or against, I think that we are all agreed on one thing—that we are living in a world of larger and larger units and bigger regions. This country is the only major industrial Power with a home-based market of less than 100 million consumers Japan, Russia, the United States and the E.E.C. all have those larger markets. I suggest that at least in the future, if we remain outside, our economic difficulties will not be overcome but will be made more acute by the very smallness of our market.
  Recently, the members of the Community themselves admitted that their region as it is—the region of the Six—is too small for first-rate scientific and technological developments in comparison with the Soviet Union and the United States. One of the reasons they want us in, and one of the reasons why we should go in, is that, from the scientific and technical points of view, we should be able to compete more effectively with both the Soviet Union and the United States.
  I have not quite been able to understand the arguments advanced sometimes by people who, like myself, believe in world unity. As a Socialist, I must believe in that. But I cannot see how we are going to get a system of world unity, or a system of world government,

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  without going through the stage of regional unity and regional government first. Surely this is man's evolutionary development—cave-dweller, village dweller, town dweller, national dweller, regional dweller and, finally, citizen of the world. I cannot understand the argument of those who wish to leave out what I would regard as an essential part of the process towards world government.
  I am a former mine worker and I am speaking in my personal capacity. I want to say something about the coal industry. I believe that the structure and size of the British coal industry if we enter the Coal and Steel Community will not be fundamentally changed. I accept that both from the White Paper, although I may be critical of other things in it, and from those in the coal industry whose judgment I respect in this matter. The National Coal Board already conforms to the Coal and Steel Community's requirements on the pricing and marketing of industrial coal. I do not want to exaggerate it, but I see a future at least—I believe, a brighter future—for an industry which at the moment is exporting to the Community 2½ million tons of coal at a time when the Community is importing from other countries 22 million tons.
  Mr. Fernyhough: But my hon. Friend will remember that last year there was a great cry because we were exporting duff to France—that is, duff from the hard South Wales coal—and reimporting it after it had been manufactured into bricks. So there is trade both ways.
  Mr. Fitch: I am talking about if we are inside. The illustration given by my right hon. Friend the Member for Jarrow (Mr. Fernyhough) is from the present position when we are not inside the E.E.C. This is the crux of my argument. The fact that we shall have opportunity to export more coal will bring new life to our coal industry.
  Then there is the question of hiving off, which I hope the Government will clear up. I have a feeling that hiving off may be contrary to the Community's rules. I believe that inside the Community the Government would have no power to hive off from our coal and steel industries their most profitable parts.
  I see an enlarged European coal industry producing about 300 million tons a year and depending on Great Britain
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  for at least half of that tonnage. It would strengthen our industry and its potential very much and we should become a vital force in meeting Europe's expanding energy requirements.
  My criteria as a Socialist, in thinking of the coal industry in relation to Europe, are these. First, will it remain under public ownership? My answer is, "Yes". Secondly, will it be given a new incentive to expand? Again, my answer is, "Yes".
  I turn from the coal industry to public ownership in general. If I thought that public ownership in any shape or form or State planning were in any way contrary to the Treaty of Rome, I should oppose our entry. But that is not the case. In 1963 the Italian Government as a member of the Community nationalised the electricity industry. This was challenged by a firm named Costa, and the matter then went to the Italian courts who referred to the Community's court of justice. The court ruled that this was not contrary to the Treaty of Rome, and this form of nationalisation went forward.
  Four of the seven large banks in France are nationalised. The fourth largest bank in Germany is owned by the trade unions. The Port of Antwerp is municipally owned and controlled. One could give many more examples of the operation of public ownership in the Community.
  I turn to development areas. I was recently in Belgium in the province of Liege where there had been great contraction, particularly of the mining industry. The province had introduced, with the aid of the Belgian Government, 24 new trading estates. There is no question about the effectiveness of Belgium's regional policy.
  I do not intend to dwell long upon the question of Commonwealth preference, but I think that it is long overdue for overhaul. We are basing many of our ideas on the old Ottawa Agreement. In the early 'thirties this was an agreement to help the then under-developed countries such as Canada, New Zealand, Australia and others. As far as the present under-developed countries are concerned we must give them all possible aid.
  As for the developed countries, I can think of an example in my own constituency where the management of an

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  engineering firm asked me to visit it. The management complained that engineering valves from Canada were coming into this country duty free. The identical valve was being manufactured by the British company and when exported to Canada was subject to a duty of 20 per cent. This resulted in short-time working for some of my constituents.
  The time has come to take a fresh look at the whole question of Commonwealth preference, particularly in relation to the developed countries.
  Finally, there has been a fear among the people of this country about Europe. I can understand this. Most people are afraid of the unknown, afraid of taking the step which they know little about. This is understandable because twice we have been rejected and rejected people naturally become cynical about things. I do not think that entry into Europe will bring an immediate earthly paradise. But I do believe that it is a challenge which we and Europe must accept.
  7.35 p.m.
  Mr. Derek Coombs: I have given a great deal of thought to my opposition to the Common Market, which has been related not to the precise terms or the specifically economic aspects but rather to the wider political implications of Britain joining the E.E.C. and its inevitable move towards some kind of federalism in the future. The idea of a free trade community in itself must obviously be welcomed, and I sincerely believe that the terms which my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has obtained are the best that could possibly be achieved.
  It is fair to say that nobody should refer to one side of the coin without mentioning the other. So that although there will be some short-term economic disadvantages, the long-term advantages economically speaking can be enormous. Quite frankly, one does not really know. One thing is probably true—that the price we shall have to pay because of C.A.P. will be much higher than if we had been a founder member. But all that is history.
  The big question now is: how will our major industries react to the new wind of competition? Will the loss of
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  Commonwealth preference and the contributions that we shall soon have to make cripple us, or will free access to the hugh industrial market provide the platform for which we have so long been searching and enable our economy to grow at a fast and consistent rate? These are questions which it is impossible for any one to answer with any certainty; but, taking the economic arguments in isolation from the political arguments, I believe on balance that we should acknowledge the risks and accept the challenge.
  My main reservation has consistently been the impact on our political institutions. At the time of the first negotiations from 1961 to 1963 I thought it possible that this problem could be overcome. It was abundantly clear that any form of supra-nationality did not appeal to de Gaulle. It seemed to me at least conceivable that with Britain's entry at that time the Treaty of Rome could have been revised to contain a positive clause which, while enabling member States to merge their economies and foreign policy to a desirable degree, would rule out any possibility of a loss of national sovereignty. But it has long ceased to be possible to entertain any such hopes.
  I believe major political developments are bound to take place in a large Community. My concern has always been that the Eurocrats, the civil servants, the technocrats will progressively take over and that in, say 20 or 30 years' time a one-nation State covering the whole of Western Europe will materialise. It would be both idle and dishonest for me to pretend that anything has yet happened to change that concern. What has changed, however, is what I regard as one crucial factor in the balance of my personal judgment. It is simply that, whereas until recently I believed that Britain's refusal to join would, in effect, block the political development of the Community, I am now convinced that, whether we are inside or outside, we shall ultimately see the gradual unfolding of what will amount to a new super-Power. In those circumstances, Britain herself could well become an offshore island, and this would plainly be unacceptable.
  If this is so, it alters, and alters drastically, the risks and consequences of staying out. On grounds of comparative size alone, real British influence—our

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  ability to exert our national identity—could be much less outside than inside. The dangers of allowing this to happen are obvious at a time when the whole international pattern seems on the verge of major change. For me, and, I imagine, for many others, the recent announcement of President Nixon's historic China initiative brought home forcibly the opportunities that may be opening up, and the urgent need to secure for Britain the most effective influence she can have.
  It is inevitable that Western Europe will respond to these changes. Against that background, it now seems to me that the paramount political consideration for us must be to influence the development of Europe, both to the advantage of this country and in the interests of world peace. We must ensure that our own political ideas help to shape its institutions and its attitudes. We must try to see that the freedoms and values that we sustain in this country are sustained in Western Europe as well.
  I have, therefore, come to the conclusion that the balance of political argument now matches what I have always believed to be the balance of economic argument, and that it is now right for this country to join the Community on the present terms.
  My judgment is influenced also by the very fact that the negotiations have succeeded which in itself now create a situation whereby a mass force of new aspirations, trade patterns and thinking has been set in motion not only in this country but throughout the Commonwealth. This cannot easily be reversed, and the consequences of a straightforward rejection by this country could not be the same as if agreement had never been reached.
  Whether Britain gains or suffers will depend not only on the response of industry, trade unions and the public at large but also on the quality of our statesmanship in the decades ahead. To take an extreme view, I think that we have to guard against the possibility that a weak Government led by a weak Prime Minister in 10 or 20 years' time could condemn the country to a satellite position in a Western Europe whose policies could conceivably be undesirable. On the other hand, it is reasonable and right to have confidence in our abilities to persuade
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  and encourage this great union in the direction which is advantageous not only to ourselves but to the world as a whole.
  For me many doubts and reservations remain. But it is now obvious that the ancient States of Europe will have some kind of common political purpose with or without us. It must, therefore, be right for the people of this country to lend their wholehearted suport. It is a decision on which we shall not be able to turn our backs. I hope and believe that this House of Commons will demonstrate in succeeding years its right to say, "We joined to lead and not to follow".
  7.44 p.m.
  Mr. Denzil Davies: I hope that the hon. Member for Birmingham, Yardley (Mr. Coombs) will not think me disrespectful if I do not pursue his argument, other than to say that I disagree with the conclusion that he seems to have reached. I intend to speak on the effects of entry into the E.E.C. upon regional policies and the development of the regions. As a number of hon. Members have pointed out already, this subject has been treated with scant respect if not contempt, with the White Paper devoting fewer than 200 words to it out of a total of some 20,000, notwithstanding the fact that almost half the United Kingdom is classified as a development area.
  It is in the regions that not only the economic but the political consequences of entry probably are most profound. Unlike some of my hon. Friends, whose views I respect, I am convinced that entry will damage the regions seriously and will represent a major blow and setback to all that has been achieved towards the creation of a viable and healthy economy in our regions.
  There are those, like the hon. Member for Inverness (Mr. Russell Johnston), who say that it could not be worse in the regions. The hon. Gentleman mentioned the Western Isles, with an unemployment rate of 25 per cent. But it could be, and will be, worse in the regions as a consequence of entry. It is precisely because of the short-term disadvantages that the position in the regions could be worse. Even the most fervent advocate of entry will not suggest that, in the short term, matters will get better in the country. It is because the regions

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  are weak at the moment that the short-term policies will be imposed upon them and will hit them harder than other areas. For example, if the prices of essential foods such as bread, cheese, meat and butter go up by between 20 and 30 per cent., if deflationary policies have to be pursued to protect the balance of payments, and if a harmonised value-added tax at a possible rate of 20 per cent. has to be introduced, the regions will suffer much more than the more prosperous South-East and Midlands.
  The so-called long-term benefits, if they should come, in justice should be correspondingly greater in the development areas to make up for the greater short-term burdens. But we all know that that will not be the case. The benefits, if they come, will come primarily to the already prosperous areas and, as usual, the development areas will be at the end of a long queue.
  One of the myths put about by the present Government, not just about the Common Market but also about the internal economy of the United Kingdom, is that the problems of the developed areas can be solved best by boosting investment generally, especially investment in the non-development areas. Apparently, in some magical way, general investment will spill over into the regions and benefit them as a result. It is argued that, if we enter the Community, the extra fillip to investment will act in this way and, correspondingly, be of benefit to the development areas.
  Like all myths, this one does not stand up to analysis and is not supported by our empirical experience. The major effect of a boost to investment generally in the United Kingdom has been a rapid exodus from the development areas into the more prosperous South-East and Midlands. Past experience proves that, without strong regional policies, capital does not follow labour. As a result, labour has to trek after capital investment. The same would happen if we entered the Community, the only difference being that it would happen on a greater scale.
  It is possible to make that assertion with complete confidence. Again, we can draw on our experience to prove it. There is a common market already in existence between the regions and the
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  nations of the United Kingdom. We know what has been the effect on the freedom of movement of capital between Wales, Scotland and England. We know what has been the effect of complete mobility of labour between the regions and the nations of the United Kingdom. We know that, without a strong central Government directing strong regional policies, the depopulation of the regions in the last few years would have been worse.
  That the depopulation and regional imbalance will increase is confirmed by the experience of the existing countries in the Community. If one reads the latest reports of the Commission on Regional Policies, one sees that regional imbalance is increasing in all the countries of the Six, especially in Italy, Belgium and France.
  A recent study of the problems of the regions of Western France showed that one of the main difficulties of those regions was that they were a long way from the axis of the Common Market. If Western France is a long way from it, how much further are West Wales and Western Scotland?
  My hon. Friend the Member for Wigan (Mr. Fitch) referred to Belgium. This same report shows that there has been considerable depopulation and a net emigration of 5,000 people a year from the southern part of Belgium as a result of the troubles of the coal mining industry. The enormous problems and serious depopulation of Southern Italy are well known.
  What has happened in the Community confirms our own experience, which is that labour will always be forced to follow capital into the more prosperous areas. Without a strong regional policy covering the whole area in which capital and labour are free to move the trend which we have seen in this country will continue.
  The Treaty of Rome does not anywhere expressly provide for a common regional policy. It contains some pious words in the preamble, but not one Article expressly or clearly provides for a common regional policy. Indeed, the Commission recognises this. Since 1958 it has made efforts to try to get some kind of common regional policy. It has turned

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  out memorandum after memorandum, but, as usual with a set-up governed by civil servants with no political control, nothing has been done about it.
  It is not surprising that the Treaty of Rome contains no clear commitment for a common regional policy. It is based on the principle, if it can be called such, of competition—the law of the market place. The whose essence of a regional policy is that it intends and aims to distort market forces. We find provisions in the Treaty for the free movement of capital and labour, a common transport policy which emerges against the regions, and a common agricultural policy, which is the only common policy it has. There is nothing in the Treaty to provide for a common regional policy. Indeed, so weak are the provisions of the Treaty that whenever the European Commission seeks to make an advance towards a common regional policy it can never make up its mind under what section of what Article of the Treaty it should proceed. It is strongly arguable that it has no power within the Articles of the Treaty to do so.
  Mr. Alexander W. Lyon: My hon. Friend is right that there is no provision in the Treaty for a common policy, but there is nothing to prevent individual nations taking their own policy. One of the exceptions from the Article dealing with competition is that individual States can take such action, if they deem it necessary, in the interests of the region.
  Mr. Davies: I agree absolutely. The point which I was making was that if we increase our home market area, if we allow capital to move within this much larger area and encourage the mobility of labour within it, we can never solve that problem by individual countries doing their best to try to change the balance. We need a strong centralised regional policy to counteract the market forces which we set in motion as a result of the Treaty of Rome.
  I agree that there is provision for member countries to provide their own aids, and I will come to them now. I believe that my hon. Friend the Member for York (Mr. Alexander W. Lyon) was referring to Article 92 which starts by expressly prohibiting any aids which distort competition. I suggest that it is
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  possible to argue that almost any aid to a company which encourages it to set up its factory not in an area which its commercial and economic judgment indicates, but in an area where aids would be given, distorts competition. The Article provides for this, but it then provides a certain exception. I do not want to go into the exceptions, but they are narrowly drawn. I believe that they were drawn mainly to assist the parts of Southern Italy and the various peasant communities of France which would suffer if the full force of competition were to be allowed to apply to them.
  What is important is that the Commission is enjoined—indeed, empowered—to prevent a member State pursuing regional aids which are contrary to Article 92. Hon. Members on both sides of the House, sometimes in favour of the Market, tend to think that it does not matter than the Commission can prevent a member State acting contrary to the Treaty. But the Commission takes member States before the European Court of Justice, and on this regional issue it has done so. It has successfully pursued the Belgian Government because of some aspects of its regional policy and it has successfully pursued the Italian Government for providing subsidies for transport to and from Southern Italy. The French and German Governments have had to change their regional policies rather than face the disgrace of defeat at the hands of the Commission before the European Court of Justice.
  Mr. John Smith: My hon. Friend mentions the Belgian example. Is it not a fact that the objection which the Commission raised with the Belgian Government was that the aid proposed was to industry all over Belgium and that, therefore, distorted the price of competition between the member States? The Commission would not have objected if it had related simply to under-developed parts of Belgium.
  Mr. Davies: That may be true. My point is that here is a body, the European Commission, which tells the Belgian Government what they can and cannot do and the Belgian Government have to submit. It is at this point that I believe the issue ceases to be economic and becomes a matter of sovereignty.

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  The important question is not whether our existing aids are or are not contrary to the principles of the Treaty of Rome—I believe that some of them are—but whether a future British Parliament and Government will be able to introduce aids, for better or for worse, which they consider to be for the benefit of the British people. They will be prevented from so doing by a non-elected, non-representative body sitting in Brussels backed by the Treaty of Rome. Again, our famous veto, about which we hear so much, will not assist us in this respect, because the Commission is empowered and enjoined and is under an obligation to enforce the Articles of the Treaty. What is not realised is that the Commission can pursue not only member States, but—it has not done so yet—the Council of Ministers before the European Court of Justice.
  I have no doubt that eventually a strong centralised regional policy may come from Brussels. But when it does, I suggest that we shall have travelled a long way down a road, the ultimate destination of which is the creation of a new Western European state. That is a road which I believe the British people would not knowingly wish to travel. In the meantime, the regions will suffer from the harsh winds of competition which are enshrined and codified in the Treaty of Rome and the British people, not only in relation to regional policies but generally, will be governed in ever more increasing areas of their lives by a non-elected, non-representative body sitting in Brussels.
  Those who wrote the White Paper said that accession to the Treaty of Rome does not involve the erosion of essential sovereignty. With respect, both in relation to regional policy and generally, I submit that that statement is untrue.
  7.58 p.m.
  Mr. Dennis Walters: I hope that the hon. Member for Llanelli (Mr. Denzil Davies) will forgive me if I do not follow him on the points which he raised in order that I may keep my speech as brief as possible.
  In a previous debate on Europe I was able to argue why I supported the principle of British entry and to express my fervent wish that acceptable terms could
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  be obtained. I believe such terms have been negotiated inevitably at this stage of the debate the central theme of the argument has been covered extensively.
  Perhaps the most positive aspect to emerge over the past four days is that this debate on the historic issue of Britain's accession to the European Communities has not degenerated into a party political wrangle. It would have been tragic if it had done so, because it would have presented an untrue picture of public opinion in Britain and would have been a stinging blow to those many loyal, patient European supporters of British entry who are to be found in every political party in Europe and who remained constant, throughout—first, when we hesitated and then when we were rebuffed.
  Tribute should be paid to the right hon. Members for Birmingham, Stechford (Mr. Roy Jenkins), Dundee, East (Mr. George Thomson), Manchester, Cheetham (Mr. Harold Lever) and many other right hon. and hon. Gentlemen opposite who have kept bipartisanship alive on the issue of Europe. No doubt they will have noted, among the many comments which have been made, the remarks of that veteran social democratic leader President Saragat of Italy, an old friend of this country.
  Many hon. Members have referred to the origin of their European convictions and to their work for this cause. My hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), in an eloquent speech, did so in a telling way. Perhaps I could refer briefly to my own experience in this connection. For reasons with which I shall not weary the House, at the age of 15, after being interned for three years, I worked for a few months with the Italian Resistance movement behind the Germany lines. In due course, after the liberation of Rome, I returned home, but it was an enlightening experience which left its mark.
  The Resistance was made up of very diverse elements—Communists, Monarchists, Socialists and Christian Democrats. Perhaps the most intellectually attractive, and one of the most active groups, was the Action Party whose political philosophy was Liberal-Socialist, and whose anti-Fascist record was the most impeccable of all.

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  I made friends in all these groups. They had a genuine veneration for Britain, for its parliamentary institutions, for its way of upholding the rule of law, and for its enlightened and civilised attitude to politics. There was among them a yearning for British involvement and for British leadership. I refer to that because it made a lasting impression on me, and because I believe that their feeling, not unique to Italy, but shared throughout Europe by Socialists, Liberals and Conservatives, helps to explain the consistency of support for British entry among so many Europeans over such a long period of time.
  It would take too long to recall the history of European unification after the war and the catalogue of missed opportunities for Britain. When at last we took the plunge, leadership was no longer there for the asking, even membership was rejected. But our friends in Europe did not waver in their support and encouragement. They refused to accept any rebuff as final. They worked to keep the door open and to make it possible for negotiations eventually to succeed.
  I, personally, have supported and worked for British entry for many years but, like many other right hon. and hon. Members, I should not have been prepared to enter at any price. The terms had to be acceptable. I am satisfied that they are. I support the unanimous view of the Cabinet in recommending them. I believe the right hon. Members for Stechford, Dundee, East, Cheetham and Fulham (Mr. Michael Stewart) when they say that such terms would have been acceptable to a Labour Cabinet.
  I am convinced that at this moment in history Britain's rôle lies in Europe and it is from there that we should continue to influence affairs in Europe and in the world. I believe that that is what our children would expect us to do. I believe that it is what the majority of young people in this country would wish us to do and that it is the right decision.
  To turn back now would signify a gloomy acceptance of mediocrity. It would also—and this is the point that I should like to leave with the House tonight—be a shabby betrayal of our friends in Europe who have maintained their faith in us over such a long period of time and through so many vicissitudes.
  8.4 p.m.
  Mr. John Smith: I do not wish to follow the line taken by the hon. Member for Westbury (Mr. Walters). I hope that he will forgive me if I refer briefly to the powerful speech of my hon. Friend the Member for Llanelly (Mr. Denzil Davies), who argued against entry from the regional development point of view. Like my hon. Friend, I represent a constituency in a development area. If I thought that my hon. Friend's gloomy prediction for the future of the development areas would result from entry into the Community I should be a devoted opponent of entry, because any hon. Member whose constituency was to be affected in the vital way suggested by my hon. Friend would have to argue against going in.
  Having gone into the matter as carefully as I can, because of the special responsibility which I, as a Member representing a development area, have, I am convinced that my hon. Friend's prediction is not likely to be correct, and I think that that was foreshadowed by the inexact example which he took from the action of the Commission, when he found that the Commission was acting against indiscriminate aid to a country, rather than to a region.
  The answer to the problem about regional development is to be found in the activities that have taken place within the Six, some of them using techniques which I wish this Government or then-predecessors had used. They demonstrate that it is possible to have a vigorous development policy within the E.E.C. We have been given examples of what has happened in Italy, in Belgium and in France. They do not exactly parallel what is going on in this country, but they indicate that the attitude of the Commission is one of permissiveness towards regional development policies carried out by individual countries, and that was the conclusion at which the previous Government arrived. It was the conclusion given expression to by the Leader of the Opposition in the debate on entry in May, 1967, and I do not think that very much has changed since then in the Commission's attitude to regional development.
  The other argument that is used—and it was deployed by my hon. Friend the Member for Llanelly—is that of the

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  fear about the free flow of capital. There is a feeling among many people that if there is free flow of capital the regional development areas will inevitably suffer. I do not take such a pessimistic view of the future. One reason which prompts me to take a more optimistic view is that it has been clear, particularly in relation to Scotland, that a good deal of the investment that has come in has come from outside the United Kingdom. If the development areas in Scotland had been dependent simply on United Kingdom investment, we should have had very little in the way of investment. We have attracted investment from outside, from Europe and from America. It is that sort of investment that has kept us going, and I think that in future we shall be able to attract investment on that scale.
  One thing that I know for certain is that unless the United Kingdom's general economy prospers there is no hope for the development areas. I say that because of the difficulties that we are facing in Scotland. They result not from the fact that we do not have a set of tools for a regional policy to bite into the problem, but because there is not a generally strong economy to back it up and provide the mobile industry that is missing. I think that in this sense the development areas are even more dependent than other areas upon the general economic health of the community.
  Mr. Denzil Davies: I do not know the experience of Scotland, but our experience in Wales is that when investment is high in the Midlands we suffer a considerable depopulation, especially of our young people, from Mid-Wales. Unemployment in Mid-Wales falls, but not because the problem has been cured; it falls because of an exodus of young people to the Midlands.
  Mr. Smith: I cannot argue about that, but let us consider the general proposition. It seems to me that my hon. Friend is taking an unduly pessimistic view, because I cannot see how it is possible for industry to go to Scotland or to Wales unless there is industrial expansion in the whole country. Industry does not grow out of the ground of its own accord. It comes because of a willingness to invest somewhere in the United Kingdom. It is only if there is a substantial rate
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  of growth in the general United Kingdom economy that one gets growth in the development areas, and that is one of the main reasons why we need to go into the E.E.C.
  The question of economic growth is one which can be argued from both sides. At bottom this is a question of sovereignty, and many hon. Members are reluctant to give up some of the sovereignty which is held dear in this country. I do not take that view, and if there is a diminution of sovereignty, as I think there is, in going into the Community, I am willing to face that. A sovereignty which is not real is not worth having.
  There was an interesting interlude at the end of the speech of my right hon. Friend the Member for Stepney (Mr. Shore) when he referred to the speech of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who had talked about sitting outside meetings of international monetary bodies in Europe waiting until the Six made up their minds. My right hon. Friend the Member for Stepney asked whether he should have been there at all. I am sure that my right hon. Friend the Member for Stechford would have been happy not to be there, but he had to be there, waiting in an ante room even when we were outside Europe, because decisions of great consequence to us were being taken. A country is not in a position to display effective national sovereignty in a situation like that. Ministers are in a better position to secure national interests and bolster up the country's sovereignty when they are inside the conference room, not waiting outside.
  Mr. Elystan Morgan: Whilst my hon. Friend is willing to surrender some part of Britain's sovereignty, is he willing to surrender the sovereignty of democratic institutions? Is he willing to see the essential planning of British industry, for example, vested in the nine Commissioners, who are not answerable to the Council of Ministers or the European Parliament? The issue is not one of the surrender of State sovereignty but the surrender of democratic institutions.
  Mr. Deputy Speaker (Miss Harvie Anderson): Order. Before the hon. Gentleman who has the Floor resumes, may I remind hon. Members that many

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  hon. Members have sat through four days of debate.
  Mr. Smith: I am grateful for my hon. Friend's intervention, but I must try to deal with that point generally, rather than particularly, because of the time. I am about to come to it.
  The key question which we as a nation and Europe will have to face is how best to use the advantages of technology. I am convinced that we shall never be able to get investment on the scale required to build up the necessary technologies on a nation-state basis, or at least on a nation-state of the size of this country. It will have to be done on a European basis. That is something hon. Members on both sides can agree, whether Conservatives arguing for entry for Conservative aims, Liberals arguing for entry for Liberal aims, or Socialists arguing for entry for Socialist aims. All will agree on the necessity to obtain the advantages of technology, and, in my view, they will not be achieved unless we have the enlarged Common Market. It would, of course, be possible if we were not in the E.E.C. for Governments to make ad hoc agreements about various technical developments, like military aircraft, but they are only likely to be in the areas where the Governments are purchasers and consumers, rather than more general areas where we shall have to find our own customers throughout Europe and the rest of the world. We shall need to do it on a European scale.
  Having created that technology on a European scale, we shall need to devise institutions to deal with it. Here, I come to the point raised by my hon. Friend the Member for Cardigan (Mr. Elystan Morgan). I cannot see how it will be possible for us to control the international companies that will increasingly dominate the economic scene if we are all working within a nation-state framework. Some international companies already have assets larger than those of many of the nation-states of the world. They can take their decisions on an international basis and steer their industry away from one area to another because they dislike the policy of a particular Government. A theoretical national sovereignty which can be flouted by the economic power of international companies is a national sovereignty which is not apt to meet the real problems a nation faces.
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  I am willing to give us some national sovereignty to gain a sovereignty which will be able to do something about controlling the international companies of the future. If we create a technology but cannot control it we shall not have achieved very much in the way of political and economic development. The institutions that can control it are in the E.E.C. The Commission, derided so much, can be the instrument to stand up to and control the international companies. That is the difference between a free trade area and the E.E.C. The E.E.C. is not just a free trade area but has Community institutions, two of which could do the job—the Commission, and the European Parliament at a later stage.
  This is a fundamental argument about entering Europe. It is one which I sincerely put, not only because I am concerned about the problems of industry in relation to politics but, more important, because as a democratic Socialist I believe that the fundamental of democratic Socialism is that economic forces must somehow be brought under popular control and be fashioned towards social and political ends which the people determine. If we do not enter Europe we shall not be in a position to control them and achieve those economic, social and political ends which we on this side hold among our main political objectives.
  I have strayed a little far beyond the terms of entry but some of the long-term principles are perhaps the most important aspects of the debate. Younger Members in particular should stress those long-term objectives when we are discussing this vital issue. I hope that when we look back in 10, 20, 30 or 40 years' time—and some of us may be lucky enough still to be in the House then—we shall recall some of the fears expressed and wonder how they could have existed when we see the real achievements of the Europe we shall have helped to build.
  8.16 p.m.
  Mr. Carol Mather: I have sat through four days of the debate and have heard many powerful speeches. I hope that the hon. Member for Lanarkshire, North (Mr. John Smith) will forgive me if I do not take up any of his points, but time presses. I should like to single out in particular the speech of my right hon. Friend and neighbour the

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  Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), which reflected the deep divisions on the subject in the country and in the House.
  I have reservations about entry on political grounds, but it is not right to make a final decision until one has spent some time in one's constituency during the summer months. The White Paper gives the impression that it is over-egging the bun, which rather spoils the case.
  I want to speak about several broad issues to do with our entry which it is our duty to probe. Whatever our views on the issue, it is the duty of Members to investigate the full implications.
  It is generally recognised that entry will be no panacea to cure Britain's economic problems. One wonders whether those problems have to some extent been brought about by the very fact that over a number of years Britain has been trying to enter the Common Market and has been told by successive political parties that our future lies in Europe and there is no future for this country on its own. This must have had an effect on the industrial psychology of the country.
  It seems odd that in these days when the trend is away from the centralisation of government—at a time when we are talking more about regional government, when there is an upsurge of local nationalism and when we are talking about the participation of the people in government—we should be going in the opposite direction and heading for more centralisation. Even in the debates on local government reform the arguments have been about the need to bring the power and functions of government closer to the people.
  My next point concerns super-powers, which it is obvious have difficulty in governing themselves these days. One has the difficulties experienced in the governing of, on the one hand, a country like the United States, and the force involved in governing a country like the Soviet Union.
  A super-Power comprised of six countries is one thing. A political union of six countries is also one thing. An enlarged Community of 10 nations, stretching from the Mediterranean to the Baltic, is something quite different. How one governs an enormous group of nations
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  of this kind I do not know, and I do not believe that anyone has addressed his mind to this sufficiently.
  One also wonders whether superpowers are the right types of organisation for the world as it seems to be developing. We are entering an era which will be entirely different from the one through which we have passed. It will be a question of survival, and I fear that we shall be in danger of breakdown through various causes. There could be a technological breakdown, looking at the United States, or even a biological or psychological one. This will be an extremely difficult era through which to live. We shall need the right kind of political unit in the coming years, and it will need to be homogeneous and cohesive.
  One also wonders whether a huge strategic decision of this kind—a decision affecting the destiny of the nation—can be taken by a single Government in one fell swoop. Looking at history, one is bound to question whether decisions of this kind work out in the long run. Looking back, one has had, on the economic side, five-year plans and the like. On the political side there has been the creation of federations, the majority of which have failed to succeed. We can also look at the results of other mainly political decisions, such as partitions, which we are seeing occurring in the world.
  Perhaps decisions of this magnitude are better solved by evolutionary rather than revolutionary means. I believe that there is an alternative to this step and that this can be brought about by a more gradual process—in other words, by means of a step-by-step policy.
  Looking at the broad issues involved, one must consider the question of loyalty. The people of Britain are loyal to this nation, and this is an important consideration. Are we going to give it up for a wider European loyalty which is as yet unknown and untried, When doing something like this one is on dangerous ground. One is playing with political chemistry the formula of which is extremely elusive, and this loyalty factor is the last resort of statesmen in an emergency.
  The question of sovereignty is not adequately covered in the White Paper. It is difficult to see exactly what the

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  position will be, but in a judgment by the European Court of Justice in 1962 it was stated:
  "By creating a Community of unlimited duration, with its own institutions, its own personality and its own capacity in law, Member States have restricted their sovereign rights."
  An earlier White Paper on the legal and constitutional implications of Britain joining the Treaty of Rome said that
  "we would be restricted in future in our international dealings."
  It also said
  "that it would have an effect on our treaty-making ability and the freedom to negotiate in more direct ways."
  The whole aspect of the effect of joining the E.E.C. on our Parliament here has not been considered in the White Paper. Regulations, directives and decisions will emanate from the Council of Ministers. There will be instruments which will "apply generally" and "be binding in their entirety." They will "take direct effect on each member State." This means that Parliament here will not have any power of veto over such regulations.
  I have been into the experience of Community Parliaments in this respect. An extremely good publication entitled "E.E.C.—National Parliaments in Community Decision-making" studies the whole relationship between national Parliaments and the Council of Ministers and covers the whole period during which the Treaty of Rome has been in force.
  The experience of national Parliaments has been that there has been a greater by-passing of individual Parliaments. Experience has also shown that national Parliaments have been inhibited and hindered in certain respects because of the secrecy of the Council of Ministers. For example, one cannot have the full information that one requires. There is also the time factor; one cannot get the information one requires in time for it to be useful. There is also difficulty in obtaining information of the quality one requires. It is extremely difficult to obtain information about what is going on in the Commission and Council. Indeed, even if one gets this information, it is difficult to sort out what is and what is not important.
  On this aspect, therefore, there is great danger that one of the main democratic links in our activities will be broken.
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  Already there have been major clashes over issues of this kind; for example, between the Italian and German Parliaments and the Council of Ministers. I can foresee great clashes ahead.
  In a way, this is an unnatural process for us. We are tearing ourselves apart from the Commonwealth and from our traditional friends. As such, this seems to be going against the grain. It is vital that before any final decision is taken we realise the full implications of what we will have to face if we join the E.E.C.
  8.27 p.m.
  Mr. Edward Milne: I trust that the hon. Member for Esher (Mr. Mather) will forgive me if I do not comment on the various points he made, though [shall be touching on some of his arguments because he voiced some of the uncertainty that has spread through this four-day debate.
  The Government have a responsibility, between now and October, to fill in the gaps in this inadequate White Paper. A common thread running through this debate on whether Britain should join the Common Market—it has run through the last 10 years during which this subject has been discussed—has been the fact that many hon. Members would be prepared for Britain to join as long as we got adequate safeguards, conditions and guarantees. It is clear from the major speeches that have been made on this subject that the Government have hardly started to consider the basis of the safeguards, conditions and guarantees that are necessary.
  We have yet to negotiate on fisheries, and we have to keep in mind New Zealand and sugar. We must also remember those E.F.T.A. partners which have not applied for entry, and there is a chance that Norway may not enter the Community. That being so, the White Paper is an inadequate document on which to base discussion and decisions between now and October.
  Throughout the debate we have had analyses of the progress made by the countries of (he Six during the Community's 10 years of life. It is well known that the rate of economic development and growth in those countries prior to the formation of the Community was greater than it has been since. In using the formation of the Community as an

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  argument for Britain's entering in order to further her economic and industrial interests we are apt to forget the vital fact that we alone in the post-war period would be entering the Community while leaving behind us partnerships at present providing us with about 80 per cent. of our trade.
  That state of affairs did not face or affect the countries of the Six at all when they entered. Leaving aside the Benelux set-up between Luxembourg, Holland and Belgium, the Community was formed by six separate countries. We, on the other hand, will leave behind us a Commonwealth partnership, as well as membership of the highly successful European Free Trade Association, which was set up at the same time as the Common Market.
  Those who are disturbed about sovereignty must also be disturbed at the comparison between the progress made by the European Free Trade Association and the Six. As partners in E.F.T.A. we had a trading association with Europe, and were in Europe, as well as maintaining our links with other countries and with other groups with which we were associated. To join the Six is to turn our backs on these associations and partnerships and to place our future destiny in the hands of organisations other than our own. If the evidence is right, and it is for the Government to provide more evidence if what we have so far had is not correct, this Parliament and the country's democratic foundations would be greatly undermined by our entry and decisions would be taken that would considerably affect not only the country's future but the future of those areas which require most assistance industrially and economically.
  We have to think of the effect that our entry would have on our areas of high unemployment, and in this connection development policy in Southern Italy has been quoted almost as a showpiece of how the countries of the Six are able to assist areas of high unemployment and those requiring industrial assistance. When one learns that 1 million Italian industrial and construction workers are working in Switzerland one begins to doubt this vaunted prosperity of the Community and to question how its development policy will be able to look after the
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  poorer sections of the countries in membership.
  One wonders whether the Community's development area policy would be of value to areas such as my own in the North-East, and in Scotland and Wales. The Southern Italian showpiece gives us some clue. All the evidence from the 10 years of the Community's life suggests that our own development area policies, critical though many of us have been of them under successive Governments in the last 10 years, have tremendous advantages over anything that the Community has to offer. When Ministers are replying on behalf of the Government, not only in this debate but in the months ahead before the British people and Parliament make a decision, we shall have to have a greater amount of evidence on the advantages of development area policy for the people that we represent.
  The coal industry has also been cited as an example of one of Britain's industries that will most immediately benefit upon our entry into the E.E.C. One of my hon. Friends has mentioned the question of an annual tonnage of about 150 million tons of coal being maintained in Britain if we enter the Community when for the last 10 years the contraction policy in the mining areas of the Community has been fiercer and harsher than it has been in our coalfields. There are much wider things to be discussed, and one does not have the time to develop these at the tail end of a debate such as this, when time is so drastically restricted.
  On the immediate advantages we have to look at this debate merely as a jumping-off ground, not necessarily so much to attempt to satisfy those of us who have always been against entering the E.E.C, against the background of its institutions, rules and principles, as to convince those who feel that there is merit and advantage in entry and that Britain could not survive unless she entered.
  The main purpose and value of the debate will have been served if it can take the Government out of the cloak of secrecy which seems to surround them when it comes to telling us what is needed for entry and make them give us precisely the terms, conditions and safeguards that they are prepared to underline.
  We have not been given a single agreement either on the balance of payments

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  or on the other issues that have been mentioned, ranging from fisheries to coal and other matters. Neither the British people nor the House have been told anything which goes beyond the transitional period. We have to take far too much on chance for the period which lies beyond the transition if the Government are determined to take what they wrongly claim to be this historic step.
  8.39 p.m.
  Mr. John Peel: The hon. Member for Ebbw Vale (Mr. Michael Foot) insisted that unless we can achieve an increase of trade within the Community, the whole point of our joining would be nullified. First, I would not agree with that. He seemed to overlook the fact that between 1958 and 1968 our trade with the Community increased by about 150 per cent.—alas, a great deal faster than our trade with the Commonwealth—and trade within the Community increased by no less than 300 per cent. It is a reasonable assumption that if we join the Community our trade will stand to benefit even more. The hon. Gentleman omitted to tell us any of those figures.
  I want to examine two of the fears which are rightly and understandably held by many British people, fears which have tended to be overstressed and blown up by those who are against our joining the Community. One is the irrevocability and immutability of the Treaty of Rome. I do not believe that any association of sovereign States has in practice been prepared so to subordinate their vital national interests as to regard a treaty as irrevocable or immutable. Any country that signs a treaty accepts obligations as well as rights. There is no provision in the Treaty of Rome for a termination date.
  However, it has been clearly demonstrated by the Community that, where the vital national interests of any member State are at stake, the veto will most certainly be used. France demonstrated this in 1965 over the question of weighted majority voting which was provided for in the Treaty. France made it clear that, where it thought that its vital national interests were being overridden at any point, it would refuse to abide by the wishes of the other members. That is why today in all cases of real importance where member countries consider that
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  there vital national interests are at stake there must be unanimity within the Council of Ministers.
  The other fear which one often encounters, and which is often stressed by my hon. Friend the Member for Banbury (Mr. Marten), is the question of federalism and the danger of Britain being dragged into a federal Europe before she knows where she is, the danger that we shall lose our sovereignty.
  I ask the House to consider some of the institutions in the Common Market. The European Parliament is composed of members of the sovereign Parliaments of the constituent members of the Community in proportion to their populations. The powers of the European Parliament are purely advisory. It has two executive powers. First, it can throw out the Commission, which it has not attempted to do. Second, it can throw out the budget, but it has not attempted to do that, either.
  The main decisions on Community matters are taken by the Council of Ministers, which is composed of the Ministers of the individual countries responsible to their own sovereign Parliaments, where their own Members can tell them exactly what they think about what is proposed. The proposals which are put before the Council are drafted by the Commission administrators in close collaboration with the national administrations of the individual countries concerned. Those proposals are then considered by the European Parliament, where members of the national Parliaments express their opinions upon them. There is not much federalism there.
  Ultimately, it is possible that the Community will be sustained by an elected Parliament, though the whole question of separate constituencies for an elected Parliament is a big question and I do not see it happening in the foreseeable future. There will be no great increase in the powers of the European Parliament unless there is a real European executive power. I do not see much sign of that. It is not likely to come for a long time.
  The time may come when the harmonisation of our foreign and defence policies, our political ideas, and our economies, has reached such a stage that our successors and our descendants will want to create an executive and a Parliament, but it will be up to them. I see no

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  reason why we should be afraid to take bold steps at this stage.
  Meantime, the present European Parliament will have increasingly important work to do. The recognition for a closer co-operation in foreign policy has been accepted. Here again, questions of foreign policy will be discussed between the Members of the European Parliament and the Council of Ministers. We shall, if we join the Community, be entitled to 36 seats in the European Parliament, and certainly we should take them up. The whole problem of servicing these places in the European Parliament was raised by the right hon. Member for Kettering (Sir G. de Freitas) and this is certainly something to which we shall have to pay a great deal of attention. For instance, it is very important that members of the European Parliament in the foreseeable future should continue to be members of their own sovereign Parliaments, and some way must be found to ensure that they can serve in both places. There is no reason why some members should not come from the other place. They are Members of Parliament and they have every right to sit in the European Parliament. We may have to consider electing some more Members of Parliament in order to service this duty.
  However, I hope that nobody thinks that these problems are insoluble. They are not. The important thing is for Britain to seize this historic opportunity to help build not only a greater, more prosperous and safer Europe but a greater and more prosperous Britain and, with Britain, a greater and more prosperous Commonwealth which will be outward-looking and a strongly beneficent power in the world.
  8.47 p.m.
  Mr. Dick Taverne: In the last minutes of the back-bench debate I want to say something about the longer term. It is often pointed out by critics of the decision to enter that we must have regard to the longer term and in particular to the far-reaching plans for a common currency and a monetary union, which I prefer to refer to as a monetary and economic union.
  The argument is that quite apart from the derogation of sovereignty which this implies, this would force us, with our
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  lower rate of growth of productive potential to an economic state of deflation and would condemn us to the kind of situation in which Northern Ireland finds itself within the monetary union of the United Kingdom. The most common defence against this argument is that we need not worry very much, that monetary union is not something which will happen in any event, that one only has to look at what has happened recently in the Common Market, and that even if it did show signs of developing we could, as members, block it.
  I intend to take a somewhat different line in my approach to this problem. I agree that the time scale for this eventual development has been foreshortened in the eyes of those who put it forward. It has been suggested that we should have this monetary union by 1980. It seems to me that that aim is unrealistic. It would mean that as we approached monetary union the exchange rate alterations would become progressively more difficult and would be barred by 1980. Certainly in the light of past experience this is somewhat unlikely. There have been more devaluations and revalutions within the Common Market, despite the existence of the common agricultural policy, than anywhere else in Europe.
  Secondly, monetary union, as first the Werner Committee and more strongly the Commission and certainly the Dutch and Germans have pointed out, implies economic union. It is impracticable without economic union. It cannot work unless there is first a harmonisation of growth rates and a much closer approximation of the rate of inflation in the different countries. Of course, these different rates of growth, or certainly of inflation, were the reasons behind the devaluations and revaluations which took place within the Common Market. So it seems likely that the process towards this union, if it takes place, will take very much longer than the time scale envisaged by the Werner Committee.
  On the other hand, it seems a fundamental mistake to dismiss it in the way in which some proponents of Common Market entry do. In many respects, it is a reasonable extension of the customs union. It has been part of the history of Europe in the past that progress is made, after which there is a temporary

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  halt before further progress is made. We should consider this matter on its merits, and I propose to do so briefly.
  It seems to me that the aim of monetary and economic union is an attractive one if certain points are met. First, it enhances the benefit of membership, in that it eases the flow of trade. One has only to see how much easier it is to sell in the monetary union of the United Kingdom than it is to sell abroad, apart altogether from tariff barriers.
  The second principal advantage of monetary union is a much greater harmonisation of economic growth rates and inflation rates. That is something which cannot but benefit this country. If this harmonisation does not take place there will be no such monetary union. If it does take place, this country stands to benefit particularly.
  Thirdly, it forces a solution of the sterling problem. It has been said that we would run down the sterling balances, but it does not necessarily follow that we would. In the progress towards monetary union there has to be a pooling of currencies. If Europe rejects—as I think it will—the idea of a European reserve currency, or linked currencies becoming an international reserve currency, the Europeans are in a position to assist, and must assist, this country in the kind of I.M.F. solution towards the internationalism of sterling balances that I would strongly welcome. Progress towards monetary union would be of great assistance in solving the sterling problem, which has considerably hampered us in the past.
  Fourthly, one reason for promoting monetary union is a desire for independence from the dollar. It is difficult to envisage the problem of the domination of Europe by the dollar being solved without a much greater degree of monetary union than exists at present.
  Lastly, I must consider the major objection—that we should be depriving ourselves of the right to devalue and therefore of one of the most important weapons of preventing this becoming an area of economic depression, because deflation may seem to be the only alternative to devaluation. That objection seems to me to be invalid. If we begin to approach monetary union, and exchange rate alterations therefore become
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  more difficult, we shall be depriving ourselves only of a weapon that will become increasingly obsolete.
  Monetary union becomes feasible only if there is a much greater degree of harmonisation. This is the purpose of the escape clause—or the prudence clause—inserted at the Council of Ministers' meeting in February. If there is this greater degree of harmonisation there is no doubt that there will be a far greater internationalisation of union contacts. Many people on this side of the House, even including those who oppose entry, would see that as one of the advantages.
  If there is a much greater internationalisation of union contacts wage standards are likely to be set much more on an international scale. In terms of fixing basic wage rates, just as within the monetary union of the United Kingdom we cannot isolate what is happening in one part of the United Kingdom from what is happening in another part, it seems to me inevitable that as the degree of economic harmonisation becomes closer the effects of any devaluation would be much more rapidly undone. We should have to look to substitutes for devaluation—substitutes that would be longer lasting. They would be regional policies of a kind referred to frequently in our debates. We have only to see that the policy of regional employment premiums is equivalent to a 2 per cent. devaluation in the areas to which it applies to see that regional policies, of whatever form, can do the same work as devaluation, except that by reason of the fact that economic harmonisation taking place, they would become much more effective.
  All that development of regional policy is a process which we ourselves can influence. We have the right to see, and we shall have the opportunity to see if we are members of the E.E.C., that progress towards monetary union will not take place unless proper regional policies, including—I say this to my hon. Friend the Member for Llanelly (Mr. Denzil Davies)—Common Market central regional policies, have first been properly developed. It seems to me that, if they have been developed, the attractions of a monetary and economic union are not something on which we should turn our backs.
  8.55 p.m.
  Mr. John Stokes: I hope that right hon. and hon. Members who spoke before me will forgive me if, in the few remaining minutes of the debate I do not refer to their speeches. I wish to appeal to those of my colleagues in the House and to those outside who take a traditional patriotic view, and who, perhaps, in the main, are older people.
  For years since the war in this country, we have seen patriotism belittled and our nation lose faith in itself and be a target of abuse from all and sundry. It has been a long retreat since Dean Acheson said that we had lost an empire and not found a rôle. Some people now think that entry into the European Economic Community will be the final nail in our coffin and that henceforward England will not be the England which we know and love.
  That is an emotional fear, and emotional fears are difficult to allay. I hope to persuade those who have such doubts and fears that at least some of them are not well founded. I hope to show that far from entry into Europe being the last gasp of a dying nation, it will be the first steps to future greatness in a new rôle, a rôle which, I believe, we are particularly suited to play.
  I believe that in the new and larger Europe of 10 nations we can take a leading part. The European nations need us and want us. The part which we played in the war is sometimes better remembered there than it is here. Our vast knowledge of world affairs, our parliamentary processes and our stability in political and social life will all, I believe, be great assets which we shall bring to the Community. In the new Europe, I believe, we shall find ourselves again, and it will be an exhilarating tonic which we badly need. Older people sometimes do not realise that the empire has gone. The Commonwealth is something quite different. Our navy is small. Nor do we have the pre-eminence in trade and finance which once was ours.
  I confess that I do not understand the somewhat niggling criticisms of those who do not like the terms. I fully understand, however, those of my hon. Friends and hon. Members opposite who will have no part of it at all. That, I realise,
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  goes to the heart of the matter. I say to them that I believe they are mistaken. Our basic institutions will remain and will in no way be threatened. The Queen, the Church and the Law will still remain much as they are now, and the sovereignty of Parliament will not be diminished to anything like the extent that some people suggest. We shall still love and take pride in our country, but with an additional new loyalty to Europe—just as now, for instance, in cricketing terms, we can equally back Worcestershire and support England in a Test.
  Our social life will not be threatened. We shall retain, as I see it, all our national characteristics, and if, perhaps, we become slightly more Europeanised than Americanised, I do not see the harm in that.
  From the way some people talk one would think that the local pub and the shop round the corner will suddenly disappear. We shall travel more, and, that, surely, will be good. Our young people will speak more foreign languages, and that, surely, will be good. Since we lost our empire we have become too inward-looking, and Britain was always at her greatest when looking outward.
  People sometimes fear that if we enter the Community masses of foreign workers will come here. I regard that as most unlikely. Much more likely is it that many British workers will find good jobs in Europe, as thousands of them have already done in Germany.
  In a remarkable article recently in the Daily Telegraph, Dr. Luns, the former Foreign Minister of Holland, wrote about what the E.E.C. was like seen from the inside. He has been a very good friend to this country for over 20 years. The Dutch originally expressed many of the fears which opponents of entry do here today. He said that the E.E.C. was rather a decent club, and that the British are a most clubable people.
  Our opponents try to make our flesh creep because they dislike change. I believe that this change will give this country, which has been faltering for over 20 years, just the opportunity it needs and wants.
  9.2 p.m.
  Mr. Denis Healey: The main purpose of this debate has been

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  to discuss those terms of entry to the Common Market which are known at this stage in the negotiations and to consider the Government's case for entry as deployed in the White Paper. Everyone who has sat through these four days of debate will agree that it has been an extremely valuable exchange.
  I congratulate my hon. Friend the Member for Hayes and Harlington (Mr. Sandelson) on an impressive maiden speech. However, the contributions from the Government Front Bench have been most disappointing to both sides of the House in the main. Ministers have confined themselves very largely to reciting speeches they have already made elsewhere and, with the one exception, I think, of the Minister of Agriculture, Fisheries and Food, have notably failed to answer any of the questions put to them. Therefore, we are all anxiously awaiting the Home Secretary in the hope that he at least will add something to the store of our knowledge.
  Although this is only a "take note" debate, most of those who have spoken have sought to define their personal position on entry. Two things stand out. The first is that there is a wide variety of opinion in all three parties, a fact which leads many Members to be rather embarrassed by the allies they find elsewhere. The second thing that has struck me very much is that many speakers have admitted changing their mind on the subject at least once, and sometimes more often.
  It seems to me that only a minority in any party has consistently held very strong views either for or against entry in principle since the issue first arose over the Schuman Plan, and those who have consistently held strong views either for or against entry have changed their attitude very little in the past 20 years despite enormous changes in the world, in the Common Market and in the United Kingdom itself. They also have something which marks them off from the rest of us who have not held the same view so consistently. Those in favour are very eloquent on the benefits as they see them, but they have been silent or evasive on the costs. Those against have tended to be rather cursory on the benefits of entry or the disadvantages of staying out, and have concentrated their attention on the price.
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  In my opinion, in many cases both sides have grossly exaggerated their case and, therefore, weakened its credibility. Many of those who spoke very strongly in favour tended to argue, as the Chancellor of the Exchequer did, that a large market in itself will give us growth. I am surprised that he of all Ministers should take this view, given the advice he must be receiving from the Treasury, because, as has been pointed out many times in the debate, the Common Market countries were growing as fast, many of them faster, before they formed the Community and the other members of E.F.T.A. have been growing as fast as the Common Market countries. Indeed, E.F.T.A. itself provides its members with a market as large as that of Japan, which at the moment is one of the three most powerful trading entities in the modern world. The one country which has consistently failed to share in this growth—a growth common to all other Western European countries inside or outside the Common Market—is the United Kingdom.
  I cannot help feeling that we must face the fact that we in Britain face a particularly intractable economic problem which is unique in Europe. No one who has studied the problem over the last two decades can deny that. There is some evidence that the only other country which faces an economic problem similar to ours is the United States, and the United States of course already enjoys a very large market indeed.
  I believe that my right hon. Friends the Member for Battersea, North (Mr. Jay) and Stepney (Mr. Shore) were right to point out that analogies from the experiences of the Six in the Common Market are not necessarily relevant to us in Britain, because if we join we shall have disadvantages which none of them incurred. We shall have to give up a cheap food policy, which none of them had. We shall have to give up tariff preferences in the Commonwealth and share the preferences we have in E.F.T.A. We shall have to give up an external tariff which is higher than the external tariffs given up by the Common Market countries, and, because of the way in which the budget is framed, we shall get less back from our contribution to that budget in terms of percentages than any other member.

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  It was significant that none of the Ministers, who had these points put to them repeatedly in the debate, attempted to deal with them, although they do, in my view, wreck a very large part of the case for entry as represented by the most enthusiastic supporters. This does not, of course, wreck the whole of the real case by any means.
  I think that those fundamentally opposed to entry equally exaggerated their position. They, I think, in the main were particularly worried about what they think is a loss of sovereignty, a risk that we shall be forced if we join to do things which are against our national interest. This was a tenable fear 10 years ago, but it really is not tenable today and has not been tenable since, in 1966, by threatening to paralyse the Community unless majority voting was given up, France persuaded her partners to accept that each of the countries should be able to prevent action which is regarded as contrary to its fundamental national interests.
  Of course, we have had many examples of this in the last few months. There has been the inability of France and Germany to agree on how they handle their currencies. There is the fact that Italy has defaulted this week, I think for the third time, by failing to introduce a value-added tax by the terminal date fixed by the Commission.
  There is one other general point I would make about the case put by what I might call the extremists. I regret—and I think many people on both sides of the argument as well as both sides of the House will regret—the tendency of both extremes to seek support for their positions by denigrating countries which are outside the particular groups to which they think we should belong.
  Those in favour have tended in this debate to attack the United States or the Commonwealth. Any British Minister and any British Government will often have a troublesome time from a foreign Government when it is defending its interests, but I doubt whether there is any time when the Commonwealth or the United States has mounted a sustained attack on the British currency in the way that M. Pompidou did some years ago. With great respect to my right hon. Friend the Member for Birmingham, Stechford
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  (Mr. Roy Jenkins), I doubt whether he found Mr. McMahon quite as difficult a customer on the occasion to which he referred as he found Dr. Schiller on another occasion.
  It is equally wrong for some opponents of entry to attempt to generate support for their case by attacks on France and on Germany, particularly at a time when the French and German Governments are pursuing a policy more helpful to the United Kingdom than at any period since the Second World War. We must all recognise that, whether or not we joint the Common Market, we shall have to work in politics as well as in trade matters with European Governments, with American Governments and with Commonwealth Governments. There is no argument for making that work more difficult.
  I think it has been clear in this debate that the great majority of hon. Members belong to neither of the extremes to which I have referred. The great majority regard entry as a problem of judgment not of principle—and certainly not of party principle, otherwise the House would not be as widely divided as it is.
  What do we have to judge? We have to measure the cost of entry against the benefits we can expect and then we have to judge our national ability to pay that cost. Even if we decide that the benefit of entry is worth the cost, we may have to decide we are unable to pay. It is as if a commercial traveller wanted to buy a new car in the hope of increasing his earnings. He has to decide whether it is worth the money, whether the terms of purchase are fair, and then whether he can afford it.
  With great respect to those who take a different view, the strength of our economy during the critical years of entry is one fundamental element in the final judgment. I should like to spend a little time dealing with those three areas on which we have to make up our minds: the benefits, the cost, and, finally, our ability to pay the cost. Whatever happens to the European Community in the longer term, it is at present, as its name implies, purely an economic Community. France plays no part whatever in N.A.T.O., though she is a member of the Alliance. She has significant disagreements with all other members of

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  the Common Market on attitudes towards the United States, the Soviet Union and the Middle East—by far the most important three areas of foreign policy. In fact, the United Kingdom Government under different party leadership have proved that Britain can co-operate closely in defence and foreign policy with the other members of the Common Market without being a member of the Community. Indeed, if I may adopt the very telling image used by my right hon. Friend the Member for Stechford, in all discussions in N.A.T.O. on European defence France has been eating her meals alone outside the room, and the sooner she decides to enter the better.
  We must judge the benefits of entry into the Community in economic terms. At the moment—this could and, in my view, will change—the Community is economically a Customs union for industrial goods, with a low external tariff. Therefore, so far Britain has lost very little trade from being excluded. Indeed, our exports to the Six have gone up almost as fast as our exports to one another.
  Colonel Sir Tufton Beamish: Nothing like as much.
  Mr. Healey: Yes, and we have had the benefit of preferences in E.F.T.A. and the Commonwealth at the same time.
  SirBeamish: About half.
  Mr. Healey: The figures to which the hon. and gallant Member for Lewes (Sir T. Beamish) is referring depend on counting in Dutch entrepôt trade to Germany, which, in realistic terms, is not trade at all.
  On the agricultural side, the Common Market is a managed market for agricultural goods at a very high price. It was essentially devised to help the French Government to buy their farmers' votes during a very difficult period of transition in French agricultural policy. From the point of view of the common agricultural policy, no one disputes that we should lose from joining the Common Market.
  The one likely advantage of membership, and it is an important one, will not follow automatically from belonging to a larger market, according to the theories of eighteenth century economists. It is
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  the fact, as Lord Stokes has said, that stop-go policies in Britain under successive Governments in the last quarter of a century have been a serious disincentive to industrial investment. Industrialists believe, though this, too, can be disputed, that in the larger market they can invest today with less risk but that in two years' time the market will have disappeared as a result of the policy of their own Government.
  To my mind, by far the most important argument for entry is a new one. It is what we could lose from exclusion in the future. The Common Market Governments are now attempting to go beyond a common market to a common economic policy on both internal and external matters. Here the benefits of our membership would be substantial, especially if the three applicant countries joined at the same time.
  It is notable that both Sweden and Switzerland, which believe that it is inconsistent with their foreign policy to join as full members, are, if we are to believe the Press, deeply concerned that they, too, should be able to play a part in the decision-making process of the Common Market as it develops over the next 10 years. I believe that by far the most important area in which the Common Market is likely to develop policies, for good or ill, is in world trade and the general context in which at the moment there is a real threat of war between the major trading blocs. I think that this is an important case for entry.
  Let us look now at the cost. The ostensible purpose of the White Paper was to give some details of what it would cost if we joined. Not one speaker in this debate has had a good word for the White Paper in this regard. It has added nothing to earlier statements in the House. It has taken a good deal away. Ministers now deny things that they told the House a few months ago.
  I agree with what the Chancellor of the Exchequer said earlier, that in many of these areas, including those already in the While Paper, one need a range of estimates because many of the factors are highly speculative. The last Government in fact produced a range of estimates, and it is very much easier to do it now than it was then because a lot of the uncertainties in 1970 have been

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  cleared up in the course of the negotiations, above all the uncertainties about the phasing of food costs and the uncertainties about our contribution to the Community budget.
  The fact is that we are getting less information now than we were given a year ago. In a most impressive speech, the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) was right to say that all this work has been done by the Government. It had to be done by the Government if the Government were to make up their own minds on whether the price of entry was worth while. But information which was considered vital by the Government in making up their own minds is now denied the House because it is considered either too complicated or too embarrassing to reveal to the public of Britain.
  No Government in recent times have undertaken an enterprise of so much moment for their people with so shameless a lack of candour since the United States first got involved in Vietnam. My right hon. Friend the Leader of the Opposition and my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) have asked the Government to set up a Select Committee to consider the facts here. That demand has been supported by many right hon. and hon. Gentlemen opposite. I hope that we shall have a reply to that demand from the Home Secretary when he winds up tonight.
  There are three vital areas which the House must consider: the cost in foreign exchange, the cost in resources, and the impact on the cost of living.
  For the sake of argument, one can afford temporarily to accept the Government's estimate of the budget cost in 1973 and 1977 while pointing out that, as the Minister told the House not long ago, it is likely to rise to £300 million net by 1980, and may continue to rise. This is one of the many facts given to the House by Ministers and suppressed in the White Paper.
  For the sake of argument, one can also accept the estimate of £50 million as the extra cost of food on the balance of payments. But the key figure is the impact of entry on our trade and industrial goods. Here, as the Government admit, we shall suffer losses which no other
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  member of the Common Market has suffered or will suffer because of the loss of preferences. The Labour Government gave a figure for this—it was a very wide one—of £125 million to £275 million. The Chancellor of the Duchy gave the House an estimate of £200 million to £300 million not long ago. If we are to believe the Economist last weekend, the right hon. and learned Gentleman confirmed it in discussing it privately with the Press last month. But nobody who has studied the argument in the last White Paper—the Government have rightly based themselves to a large extent on the White Paper produced by the Labour Government—can deny that there will be a substantial cost, and the figure of £200 million to £300 million, falling, as it does, roughly in the middle of the estimate made by the last Government, is the probable one. If we add to that the likely loss on capital exports, it is difficult to see the total coming out at less than £500 million by 1977. This is not the entrance fee; this is an annual subscription which continues to be paid so long as we are a member, although I agree that it might be offset—this is the Government's case—by what used to be called the dynamic effects of entry in the later years.
  It is no good the Government claiming that a figure like £500 million cost to the balance of payments is nugatory, because, as my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) pointed out in an important speech last Wednesday, we have wrecked our domestic economy repeatedly since the war for the sake of deficits far smaller than £500 million. Nobody on the Government Front Bench has given us any clue so far in the debate as to what steps he would take to prevent a similar deficit from wrecking our economy in future. I hope that the Home Secretary, who was Chancellor of the Exchequer at one time, will answer this point.
  The resource cost is not even mentioned in the White Paper. In my view, the effect on the cost of living is underestimated, because it is unrealistic to believe that common agricultural policy prices will not rise faster in the next few years than world prices. Indeed, it is likely that world prices may fall. [HON. MEMBERS: "Why?"] For reasons which we explained in detail in the debate

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  on Friday which very few hon. Members shouting "Why?" bothered to attend.
  The cost on the balance of payments, by the Government's admission, is substantial. It is no use the Secretary of State for Trade and Industry wagging his head, because he is the Minister who told businessmen in the Midlands not long ago that there would be a substantial cost falling on us in our balance of payments before we could expect to get advantages from the dynamic results. The question is whether we can pay this cost, and here my right hon. Friends the Members for Stechford and Cheetham were quite right when they said last week that we could not afford to pay such a cost without a fundamental change in our economic policy such as to guarantee this country sustained growth, something which we have had at no time since the war so far.
  A week ago we were told that the stagnation from which we were suffering was an ideal basis on which to enter the Common Market because it gave us a big balance of payments surplus and a large amount of unused resources. When some of us took the opposite view, we were accused in the Press of trivialising the issue.
  Now the argument is the opposite. Now the Government are arguing that because they have completely reversed the policy we had a week ago we can afford to carry the cost of entry. I do not know what particular term from the menagerie of Establishment polemics I should use to describe this total reversal of the Government's position, but perhaps I could quote the view of the City editor of the Sunday Telegraph yesterday, when he said:
  "… I am delighted that what is, in the best sense, the opportunism of the Conservative Party has shown itself again".
  That was in an article entitled:
  "… Three Cheers for the Chancellor."
  The fact is that we have now seen a total reversal of all the dogma to which the Conservative Party has been attached since the General Election, even to the extent of paying nationalised industries a subsidy of £200 million to £300 million to help private industry to get its power and steel at under the cost price; but the question is whether this will work.
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  This is a consumer-led boom. It is certain to suck in imports very much faster than it generates exports. It is certain to force prices up. I must remind the right hon. Member for Barnet (Mr. Maudling) that when he was Chancellor he gave away £270 million and that that led us into a balance of payments deficit within a year of nearly £800 million. The Government are now giving away £400 million, and I believe that the estimate of the Economist is near the mark when it says that this could lead us into deficit within a year running at the rate of £500 million a year, and this is just at the point when we are supposed to be going into the Common Market and accepting the additional costs in foreign exchange to which I have just referred.
  That is not just my view. It is the view of the economic editor of the Financial Times, of the Sunday Times, of Mr. Nigel Lawson in The Times, and it was expressed by the hon. Members for South Angus (Mr. Bruce-Gardyne) and Oswestry (Mr. Biffen) earlier in the debate.
  What do we do when this happens? We have a choice between going into debt, defaulting, deflation and devaluation and there is no doubt that the course which the Government will take will be either deflation or devaluation. Devaluation is regarded by many economists as certain, even without the Chancellor's new policy. We all know that the Government indulge in the dream that they can have a General Election next October and devalue in December, but there is no chance whatever of them having time to do that, and the cost to the British people and the increase in the cost of entry if the present policies lead us into devaluation, which the overwhelming majority of informed comment on the budget has suggested is likely, will be absolutely enormous.
  The fact is that the only basis on which the Government's policy could hope to succeed—and this point has been made by all commentators—is support from the trade unions in wage restraint. But, although the Government have changed their economic policy, they have not changed their social policy, which is calculated to deny them that support from the unions on which the success of their policy must depend. We face the Industrial Relations Bill, increases in food prices, rents going up by 50p a week, school meals going up again, increases in

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  medical charges, increases in National Insurance contributions, and the introduction of a value added tax.
  There is no chance of entry to the Common Market bringing this country the expected benefits without a change in Government policy far more radical than the Conservative Party can hope or would wish to achieve. That, above all, is why I believe that it could be a disaster for Parliament to accept the terms negotiated by the Government without giving the British people a chance to change their Government in a General Election.
  9.31 p.m.
  The Secretary of State for the Home Department (Mr. Reginald Maudling): As the right hon. Member for Leeds, East (Mr. Healey) said, this has been a debate in which many important speeches have been made and points of view on both sides have been expressed with clarity. It fell to the right hon. Gentleman to express the middle point of view, which must have been uncomfortable for him. The hon. Member for Ebbw Vale (Mr. Michael Foot) said that the fence had collapsed under me. It has not collapsed under the right hon. Gentleman yet, so far as I can see.
  When the right hon. Gentleman quoted the Economist's saying that the measures of my right hon. Friend the Chancellor of the Exchequer would lead to a balance of payments deficit of so many hundreds of millions of pounds, I seemed to remember the Economist's comment on the late Government's White Paper and their figures. We quite rightly have not tried to estimate the impact on our trade. The Economist described the Labour Government's figures as unadulterated rubbish, and I expressed my agreement at the time, because it is not possible to give accurate figures on £18 billion worth of trade.
  The hon. Member for Ebbw Vale proposed a charming limerick about me. I have been trying to think of an answer, but I cannot think of any limerick about him which Mr. Speaker would allow me to use. However, I have thought of something which refers to the attitude of his right hon. Friend the Leader of the Opposition to the E.E.C. He reminds me of the:
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  "… young man of Brent,
  Whose foot was unhappily bent.
  To save himself trouble,
  He bent it back double,
  And instead of coming he went."
  I must apologise for this frivolity. That is a chestnut which has been adapted.
  I now come to the basic issues of the debate. [HON. MEMBERS: "Hear, hear."] That will be a change after the previous speech.
  I have been involved in European problems for over 20 years, since I first went to the O.E.E.C. with Lord Butler when he was Chancellor of the Exchequer. It always seemed to me that there were three essential requirements of United Kingdom policy which are relevant in this context. First, we need the widest possible freedom of trade and payments. This suits us because of the nature of our economy and industry, because by and large what we import is necessary—food and raw materials—whereas what we export can often be postponed or is not essential to our customers.
  The second requirement is the end of strife between France and Germany. The concept of balance of power in Europe is out of date. We have suffered enough from wars and strife in Europe, and therefore it is a fundamental interest of this country to eliminate any cause of tension which might in the future, as in the past, give rise to the sort of difficulty and struggle from which we have repeatedly suffered.
  A third requirement is that any European trading system which we join should be an outward-looking body, not merely because of our maritime tradition or the old Imperial or Commonwealth trading connection that we have, but because it is in the nature of this country to be a world trading and world investing body.
  We can welcome a policy of freedom of trade in Europe, therefore, only if it is not at the cost of restricting trade in the world generally and not at the cost of international interference with traditional patterns of British trade. I agree with the right hon. Gentleman in his remarks about not distorting the broad pattern of world trade. This is one of the important reasons why our voice in the Community would be of great benefit to us and other countries. And

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  as for traditional patterns of trade, particularly in terms of the Commonwealth, I will have something to say about that later.
  Looking back at the historical development of the present situation, which it is important to do, in the post-war years the O.E.E.C. fulfilled all these requirements. We had the removal of quotas, and the European Payments Union brought about a truly remarkable expansion in the prosperity of Western Europe after the recovery from the war.
  We had freedom of trade, freedom from quotas among the European countries, co-operation between France and Germany and, with the involvement of America and Canada, an outward-looking body and trading organisation. But somehow impetus in the O.E.E.C. ran out. With the elimination of quotas, there was not much more for it to do. Tariffs were the business of G.A.T.T. Thus, at that time, the six countries of the Community felt that they should make a further move forward in economic cooperation and integration.
  We at first were sceptical about it—[Interruption.]—and I admit that, along with many others, I underestimated at the time what the developments would be following the Messina Conference.
  However, there is one other reason for our policy. It should not be forgotten that before the Treaty of Rome was signed we had a clear agreement with the other European countries, our partners in O.E.E.C, to negotiate a free trade area embracing the countries of the Six as well as the other European countries. So we set about those negotiations. I remember them well. Unfortunately, they came up against a road block in 1958.
  It was said that a great deal could have been achieved for Europe and the world by the creation of a free trade area at that time. However, looking back, it was probably inevitable that the idea should fail. I believe that the founder members of the Six, including the Germans, were worried that their Community would somehow be swamped in a wider free trade area. As I say, the negotiations for a free trade area at that time collapsed and they were not—and, I believe, could not be—revived.
  We turned, with Norway and Sweden, to the foundation of E.F.T.A., and I
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  recall that there were three reasons why we set about founding it. The first was to extend the freedom of trade, wherever that was possible, in Europe, and to create a market of 90 million if we could not have a market of 290 million.
  The second was to prevent a further fragmentation of the European economic pattern, with individual bilateral deals between non-E.E.C. countries and the E.E.C. The third was because the members of E.F.T.A., when it was formed, envisaged it as part of a future movement of coming together with the Community and forming one single European economic system. Those were the reasons for founding E.F.T.A.
  There have been some big changes in the world since then, and certainly the sort of changes to which the right hon. Gentleman referred. They had led me to believe—as I believe now—that it would be right for us to choose entry into the E.E.C.
  I will list some of these changes. There has been the comparative decline in the economic position of the United Kingdom. I am sure that hon. Members will accept this, whatever the reasons may have been. Then there has been the relative decline in our growth of output, of exports and of investment, along with our relative failure to increase our living standards as fast as many other countries. The reasons for these developments can be argued on another occasion.
  There is, then, the sterling area burden and the difficulty of knowing what to do with it. I agree with the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) that sterling as a reserve currency is, in many ways, a great burden. I also agree that it is not easy to know how to overcome the difficulty of this burden, particularly when it consists of debts owed to friends and trading partners. This is another reason why I believe our comparative trading position has not advanced in the way the position has in other trading countries.
  On the other hand, we have seen the growing power of the Community, first in its own economic growth and what it has displayed, and, secondly, as a competitor with us throughout the entire world. I believe that this aspect has been under-estimated in this debate. We must think not only of the advantages and

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  disadvantages of going in but also of the consequences of staying out, and one of the consequences of staying out will be facing this very severe competition from an economy across the Channel the size of that of the United States but with wage levels akin not to those of America but to ours. This is a formidable competitive situation.
  One must also bear in mind, in looking at that, the enormous power of the Community in international trade negotiations. When these trade negotiations take place—we saw this in the Kennedy Round—the big boys are the big importing economies and the Community, I think that I am right in saying, is the world's biggest single importer. That is why the voice of the Community is enormously powerful in these negotiations. If we are members of the Community, we shall have our part in influencing that voice and our interests will be taken care of by our partners but, remaining outside, we shall have to paddle our own canoe, and our chances then, realistically viewed, will be far less than if we were members.
  The policy of the Community has developed on a far less restrictive basis than I expected. Its tariffs have been lowered. It has taken a full part in the Kennedy Round and is moving towards policies of lower tariffs. In its attitude to other countries it has been, I think, a genuine example, to use a somewhat ugly phrase, of an outward-looking organisation. In its relations with very many countries and in its generous policies of aid for developing countries it has performed very well indeed—much better, frankly, than I expected 10 years ago.
  Then, the drive to early federation or to a federalist system has very much diminished. I do not know to what extent in the initial stages the founders were convinced of the need for federalism—M. Monnet was, I know—or how much Governments were, but the drive to federalism has diminished. Since the 1966 agreement it is recognised that no country's vital interests can be over-ridden by the other countries and there can be no extension of the functions of the Community beyond the Treaty of Rome without unanimous agreement. So the pace of any advance to federalism, in the political sense, or to a common currency, in the economic sense, will be determined
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  by what the member countries believe to be their national interests.
  Next, there has been a change in the trading pattern. The Commonwealth countries have pursued trade with the Community actively in the last 10 years. Many of them are attached by association with the Community, and some have already given preference to the Community over us. The pattern of trade has changed because of a change of pattern in industrial production, and also because, in the case of Australia, for example, of the tremendous pull of Japan and the enormous growth of trade between Japan and Australia. There is also the decisive change in the attitude of the French Government which has taken place in the last year or so.
  For all these reasons I am convinced by experience and reasoning, not by sentiment, that it is better for us and the rest of the world if we enter the Community. I must say that I have never been a "whole hogger". I have never accepted for a moment that it is disaster to stay outside of the Community and automatic prosperity to be inside. Anyone who argues that is quite wrong. The argument, as it seems to me, is that for this country there will be better opportunities, both economic and political, inside, and greater danger outside the Community.
  This is the great decision we have to make—and let us remember that a decision to stay out is just as big a decision as a decision to go in. So often in politics and in economic management a decision to do nothing may be the most reckless decision of all. There is a wide spectrum of views. There are those who say let us go in unconditionally, like the Liberal Party—;
  Mr. Thorpe: No.
  Mr. Maudling: I thought that the Liberals had sophisticated arguments about going in and changing things from the inside. In any case, that argument has disappeared, because the terms available are known.
  The various attitude to this decision can perhaps be analysed in this way. There are the opponents who, for a variety of reasons, are against entry in principle—and we have heard a number of hon. and right hon. Gentlemen on both sides who are opposed in principle. Then there are those who say that there can be no entry

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  on these terms. Some, like the right hon. Gentleman the Leader of the Opposition, say just "No" to these terms. Some, like the right hon. Member for Cardiff, South-East (Mr. Callaghan), say, "Let us try to get better terms". Finally, there are those—I think probably very few—like the right hon. Member for Leeds, East, who say, "Yes, let us go in but only when there is a different Government and a different economic policy". Those are the various arguments.
  Summarising the basic arguments for entry, they are the economic arguments, which my right hon. Friend the Chancellor of the Exchequer dwelt on at some length this afternoon—the economy of scale within a larger market; the possibility of building up European enterprises on a scale and power adequate to compete throughout the world with American enterprises; the means for modern research and development; the means for investment on the modern scale required by the high technology industries, in a very large market; the possibility of more competition within our own market, which is good for us and from which we should not shrink; and the opportunities available to our investors. After all, the City of London remains dominant throughout the Western world. The ability of the City to raise even further its very high invisible earnings will be great within the Community.
  Then there is the evidence of the Community itself, its advanced living standards, internal trade and investment. I say again to those who question these figures: listen, surely, to the evidence of the people themselves in the Six because they, Governments, business men and unions alike, are convinced that much of the growth that they have achieved and the success that has come to them has come because of the formation of the Community. I think that it was the right hon. Member for Leeds, East who said the other day, in an article in the Mirror, that he knew of no Socialist Party and no trade union throughout the whole Community that did not consider that the Community was a good thing and did not welcome British entry. So much for Socialist solidarity.
  The negative arguments I have tried to express must also be considered. It
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  is very important to bear in mind the competition world-wide from a market this size, and the effect on investment in this country, investment both by British enterprises and by American enterprises. People sometimes argue—I think that they are quite wrong—that if we join the Community British investment will flow out into Europe. It is just the opposite. At the moment, firms wanting to make their investment in the Six to improve their market are not, by and large, better off. They have to go there to avoid jumping over a tariff barrier. But once we are inside the Community there will not be the pressure on British business men to expand outside our own shores, as American investment and experience shows quite clearly that the Americans have influences which attract them to investment here—common language and engineering standards. They would be much more likely to invest here rather than on the Continent if there is no longer this tariff barrier which at present is causing them to move away from Britain towards continental Europe.
  My right hon. Friend the Foreign Secretary, with clarity and force, has stated the advantages as have many others who have spoken, and they come down broadly to the argument we know so well, that in a world of very large Powers indeed the question is simply whether we can make our influence felt better by having a wholly separate voice outside the Community or by taking a leading part in the framing of European policies. Of course, the development of a single European foreign policy lies a very long way ahead but surely, despite that fact, the more we can do to concert the policies of Europe, the more we can defend and advance in common a common political purpose for Western Europe, and the better it must be for us and for men of good will throughout the world.
  There is no real alternative. The Commonwealth is no longer credible as an economic or a political system. One must accept that, as I believe the whole House accepts it. Changes in the economic pattern of the Commonwealth have been very great—the growth of competing secondary industries in so many overseas countries, the spread of export in their materials to many new countries, such as Japan—and in political matters there has

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  never been, for many years, any opportunity of forming a common, single political aim among the members of the Commonwealth.
  The alternative does not rest there, nor do I believe that the North Atlantic Free Trade Area which has been suggested is an alternative. The Americans have never shown any interest in this. I do not see why they should; because the offer to them of a market on our scale is nothing compared to the offer they have to make us of a market on their scale.
  As for E.F.T.A., although I agree—this is natural, because of my connection with it—about the value of E.F.T.A. in the economic field, it cannot make any basis for combined or concerted political action. These are the arguments for.
  As for the objections in principle, the first is the question of sovereignty. An international agreement tends to involve some abrogation of sovereignty. Sovereignty is freedom of action. Anyone who joins an alliance accepts some limitation on his freedom of action, as his partners accept limitation on their freedom of action. This is a reciprocal acceptance which has not been adequately realised.
  As regards sovereignty, our activities will be bound by our obligations under the Treaty, and by no more than our obligations under the Treaty, which are basically of an economic and a commercial character.
  Mr. Michael Foot: Will the Secretary of State answer the question I put to him earlier? Will he tell us, first, when an outline will be given of the legislation which would be involved if the Government accepted entry and, second, which of those proposals would be amendable when they are presented to the House? If they are not amendable, would that not be an interference with the sovereignty of Parliament?
  Mr. Maudling: No, because that is a common occurrence when we enter into a treaty. We often enter into treaties which call for legislation. We are obliged by the terms of treaties to legislate; and we are obliged to accept our obligations under the treaty.
  Mr. Foot: Does the Secretary of State say that we have entered into any treaties
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  which would involve such an extensive amount of legislation as will be brought before the House covering taxation, trading relations, and all the other matters?
  Mr. Maudling: I am not sure that taxation is covered by it. In any case, we have already entered into treaties which determine the course of the country in a wider field than the obligations under the Treaty of Rome. Nothing could be greater than the obligation to make war in defence of an ally, should that be necessary.
  As to the balance of payments, the elements in the balance of payments are, on the debit side, the cost of the contribution to the Community fund, the cost of the increase in the price of food imports, and the cost—unquantifiable—between the loss of some preferences and the gain in the so-called dynamic effect and the access to much wider markets. This last is not quantifiable. It is not possible to quantify the effect of a reduction in preferences over a period which is not known. One cannot be set against the other, therefore. The attempt by the Labour Government in their White Paper in 1970 to do that was a dismal failure.
  Suffice it to say two things. First, it is the almost unanimous view of British industrialists that, from their experience as industrialists, this will be excellent for trade and commerce in Britain. I find the confidence of those actively engaged in trade particularly convincing.
  As regards the previous Government, the conditions which govern trade and commerce which we propose should be accepted are precisely those which they proposed should be accepted. There has been no change in this respect. I do not quite understand why such a condition as was acceptable in the conditions of the balance of payments problem of 1967 should not be acceptable against the background of the strong balance of payments of 1970. These are the arguments of principle.
  As to the argument on the terms, there is, first, the budget contribution. I do not believe that anyone would imagine that we could have got a better deal on the budget contribution than that which has been obtained by my right hon. and learned Friend the Chancellor of the Duchy. No one in Europe will believe that for one moment.
  Mr. Shore Mr. Shore rose—;
  Mr. Maudling: No; I am sorry. It is getting towards the end.
  Mr. Shore Mr. Shore rose—;
  Hon. Members: Sit down!
  Mr. Speaker: Order. If the right hon. Member who has the Floor does not give way, the right hon. Member for Stepney (Mr. Shore) must resume his seat.
  Mr. Maudling Mr. Maudling rose—;
  Mr. Shore Mr. Shore rose—;
  Hon. Members: Sit down!
  Mr. Maudling: I am winding up a four-day debate and trying to cover as many points as I can. The objections which are made to the terms which have been obtained are, first, the budget contribution; second, as to sugar, where the terms have been accepted by those most directly affected—namely, the sugar producers; third, New Zealand, where the terms have been accepted by the New Zealand Government; and, fourth, raised by the Leader of the Opposition, as to capital movement, where all that was asked for was the transitional movement, which is precisely what we got. Therefore, the argument on the terms is totally bogus. It is not believed in this country or throughout Europe. Everyone knows perfectly well, as is evidenced by Ministers of the previous Government who know most about these things, that these are the best terms that any Government could have expected to get. If they are now saying that the terms are not acceptable, the enterprise of trying to enter themselves was bogus from the start.
  Mr. Shore: Will the right hon. Gentleman give way?
  Mr. Maudling: Other points that have been raised, and particularly by the hon. Member for Ebbw Vale, related to iron and steel and regional policies. On the subject of iron and steel I would merely say that the hon. Gentleman's Government decided to accept the Treaty of Paris in its entirety, requiring only a transitional period, and what we have got is a transitional period—once again precisely what his Government thought would be suitable. If that be so, and it is true that the leaders of the coal and steel industries emphatically say that in
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  their belief entry into Europe on these terms will be in the interests of their industries—[Interruption.] I do not know whether hon. Members opposite are saying that the chairmen of the iron and steel industries are not fit exponents of the interests of their industries.
  Some of the matters which were raised by the hon. Member for Ebbw Vale about cutting back on expansion programmes and the House of Commons losing control of the nationalised industries are bogus. If they are true, why were they neglected by the previous Government when they entered into this negotiation? It is argued that in the Community we would have to cut back our assistance to the regions. I believe this to be the opopsite of the truth. I am convinced that under membership of the E.E.C. we shall be able to do more to help the regions than we are doing at the moment. Look at the experience of the Community and at the fact that the Community states in the beginning of the Treaty of Rome that one of its main purposes is to establish a balance between the various economic regions, and look at what they have done in Southern Italy, parts of France and Germany, and see the practical results of a regional policy. One will see that the party opposite were quite right in assuming as they did that joining the Community, so far from damaging regional policy, will facilitate it.
  There is no argument on the terms. There remains the argument: let us go back and ask for better terms. This is the most unrealistic argument of all. After all these years of struggle and negotiation under succeeding Governments, after all the efforts of our friends in the Community who have worked hard to get us in, who have believed in our entry, for us to turn our backs and say, "We shall go back in a few years' time when you have learned how much you miss us"—I do not believe that Europe can be run on that basis. The shock to Europe and the Western world would be profound.
  These are the arguments—the arguments of those who say "I agree on going in but the terms are wrong", who say, "Let us try again", which is ridiculous, and who say, "Let us have a political argument about a General Election."
  Mr. Wilfred Proudfoot: On a point of order, Mr. Speaker—;
  Mr. Speaker: Later, I think. I must first put the Question.
  Question put and agreed to.
  Resolved,
  That this House takes note of the White Paper entitled The United Kingdom and the European Communities (Command Paper No. 4715).

BUSINESS OF THE HOUSE
Ordered,
That the Consideration of Lords Amendments to the Sheriff Courts (Scotland) Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[The Prime Minister.,]
Mr. Proudfoot: On a point of order. Since many hon. Members on both sides of the House have been frustrated in the debate because they could not catch your eye, owing to sheer numbers, would it be possible for hon. Mmbers to deposit about 1,000 words in the OFFICIAL REPORT so that their point of view could be recorded, as well as their vote at the end of the debate?
Mr. Speaker: The hon. Member for Brighouse and Spenborough (Mr. Proudfoot) was kind enough to give me notice that he was going to raise this point of order. I have had the opportunity of considering it but I am advised that the OFFICIAL REPORT is a record of speeches made in the House and that it also contains answers to Oral and Written Questions. It has never been the practice to allow speeches to be read into the record, and I could not allow it to be done without a Resolution of the House to that effect.
Mr. Proudfoot: Further to that point of order. The Executive frequently say, "In view of the length of the Answer I shall circulate it in the OFFICIAL REPORT". Surely that is already part of the procedure of the House. I believe that in 1924 Mr. Speaker Whitley suggested that Ministers' Answers which were too long should be deposited for inclusion in the OFFICIAL REPORT.
Mr. Speaker: Any process that might lead to the shortening of speeches has its attraction, but I am advised that
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the procedure to which the hon. Member has referred relates only to Questions, and not to speeches. Therefore, I cannot accept any departure from that procedure without a Resolution of the House. Whether I should welcome such a Resolution is another matter.
Mr. J. T. Price: Further to that point of order. The hon. Member for Brighouse and Spenborough (Mr. Proudfoot) has raised a very interesting proposal, which is often adopted in the United Slates of America. Although I have no intrinsic sympathy with the suggestion that speeches should be deposited and circulated in the OFFICIAL REPORT, I agree that many hon. Members in this honourable House feel disappointed by their failure to catch your eye during this debate—Members of whom I am not one.
I am not complaining, but there are occasions like this when great matters of State are being debated and there is a feeling in the House that far too high a proportion of Privy Councillors and senior Members occupy the debating time of the House. Therefore, I make my protest that although many of us have not had our voices heard in this debate we are nevertheless prepared to make our voices heard when there is a deliberative debate on this issue before the country in the autumn, which is when our voices will really count.
Mr. Charles Curran: May I be allowed to add something to what has been said, and put it to you for a decision, Mr. Speaker? Like many other hon. Members, I have sat here for several days suffocated with incubated impromptues and prefabricated phrases that I have been unable to deliver. I suggest that you should give serious consideration to the plight of those hon. Members—there are many on both sides—who have come here ready and eager to speak, and have been frustrated.
I should like you to re-examine the suggestion by my hon. Friend the Member for Brighouse and Spenborough (Mr. Proudfoot) that we should be permitted to put in written speeches. I draw your attention to a precedent which I think has some bearing on the matter. For over a hundred years it used to be the practice in the House that any hon. Member who put down a Question had to get up and read it. The practice of

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putting Questions in the House seems to have begun in about 1783, and the practice of putting Questions to Ministers was formalised from 1832 onwards.
For more than 50 years it was the unvarying rule of the House that any Member who put down a Question had to get up and read it. In the end, one of your predecessors in the Chair decided that he had had enough of it. The date was 1880, and your predecessor was Mr. Speaker Brand—a very strong, tough-minded Speaker, who, as we remember, put an end to the practice of parliamentary obstruction. [Interruption.] He put an end to one kind of parliamentary obstruction, anyway. I think that the time when we may need a reincarnated Mr. Speaker Brand may not be very far away.
Your predecessor in the Chair, Mr. Speaker, was faced in 1880 not only by the deliberate obstruction which had been begun in the House by the Irish National Party but by the deliberate time-wasting which was organised by Members who put down long and verbose Questions and insisted on reading them out. Mr. Speaker Brand's patience boiled over in 1880 when one Member proceeded to read out a Question running to more than 500 words which he had put on the Order Paper. Having listened to that 500-word epic, another hon. Member, Joseph Cowen, who sat as the Radical Member for Newcastle, made an appeal to the Chair. He asked the Chair—;
Mr. Speaker: Order. The hon. Gentle man has just spoken of the Speaker's patience boiling over. The temperature is rising.
Mr. Curran: I know that you are fireproof, Sir. Nothing that I or anyone else can do can make any difference to your temperature; you have a built-in thermostat which keeps you completely calm.
With great respect, I ask you to consider the precedent which your predecessor created in 1880 when he was faced with the practice of crowding the Order Paper with long Questions which took a great deal of time to read. When the point was put to Mr. Speaker Brand by Joseph Cowen, that the House really
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ought not to have to put up with it, this is what your predecessor said:
"… it was formerly the practice for Members to read their Questions, and the practice has generally prevailed down to the present day. But I am bound to say that latterly the practice has prevailed of putting Questions at such extra ordinary length that I am inclined to think the House would do well to depart from it".
The House proceeded to act on the Speaker's guidance.
Your predecessor, Sir, was prepared to establish a precedent regarding the reading of Questions. Is it not possible for you at least to consider the practicability and desirability of creating a new precedent, namely, that Members who want to deliver long and tiresome speeches should do it on paper instead of inflicting them upon us by word of mouth?
Mr. Speaker: The hon. Gentleman's idea has certain attractions, I think, certainly as regards points of order. The question of speeches is a different matter. What the hon. Gentleman has drawn to my attention relates to Questions.
I realise that, as he says, many hon. Members have been frustrated but no one has been more frustrated than the Chair at the prospect of being able to call only 65 back-bench Members, when there were probably three times as many who wished to speak. I hope that those who consider the organisation of these matters will have regard to that fact and try to ensure that there is rather more time available, particularly for back benchers. There was only one suspension for one hour during the debate just concluded. It is back benchers who gain from a suspension. Front Bench speakers have their time anyhow, whether there is a suspension or not. I suggest, therefore, that if the hon. Gentleman wishes to further the hope of more back benchers being called, he will use his great powers of persuasion through the correct channels. The other matter which he has drawn to my attention relates, as I have said, to Questions, not to speeches.
I think that the time has now come to get on with the other business of the House.

SHERIFF COURTS (SCOTLAND) BILL
Lords Amendments considered.
SHERIFF COURTS (SCOTLAND) BILL
  Clause 36

    PROCEDURE IN SUMMARY CAUSES
    Lords Amendment: No. 1, in page 22, line 39, leave out "of counsel" and insert "an advocate".
    10.10 p.m.
    The Lord Advocate (Mr. Norman Wylie): I beg to move, That this House doth agree with the Lords in the said Amendment.
    This is a drafting Amendment. The effect of the Clause is to enable a party to summary proceedings in the sheriff court to be represented in certain circumstances by someone other than a qualified lawyer, which is already covered in small debt actions. The expression "of counsel" was intended to signify a member of the Bar, but it has been suggested that the expression is more commonly used in England than in Scotland and that it would be more appropriate in a Scottish Bill to use the more familiar words "an advocate" to describe a member of the Scottish Bar.
    Question put and agreed to.

Clause 37

  REMITS
  Lords Amendment: No. 2, in page 23, line 29, at end insert:
  "(4) In this section ' sheriff' includes a sheriff principal."
  The Lord Advocate: I beg to move, That this House doth agree with the Lords in the said Amendment.
  The Amendment is designed to accommodate a highly exceptional situation, but one which might conceivably arise, where a principal may be sitting as a judge of first instance in circumstances which make it impossible for the sheriff, or, as he is at present known, the sheriff substitute, to take the proceedings. Our attention was drawn to this drafting defect as a result of an Amendment put down to Clause 4 by the hon. and learned Mem-
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  ber for Edinburgh, Leith (Mr. Ronald King Murray), as a result of which we scrutinised with great care the further provisions of the Bill. For that I should like to express my gratitude to the hon. and learned Gentleman.
  10.13 p.m.
  Mr. Ronald King Murray: I thank the Lord Advocate for his kind words.
  The Opposition agree with the Amendment. The principle embodied in it that as often as possible the sheriff principal and the sheriff as he is now to be called should have overlapping jurisdiction, is a useful principle, which we welcome.
  Question put and agreed to.

UNEMPLOYMENT, BOOTLE
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
10.12 p.m.
Mr. Simon Mahon: I am grateful for the opportunity to present the difficulties of my constituents in these difficult days of unemployment in the North-West.
The Home Secretary said just now that entry into the Common Market might reduce the tensions caused by unemployment in the regions. I certainly hope that that is so. The Chancellor of the Exchequer said recently that the level of national unemployment was intolerable. A man of his generation must know that any level of unemployment is intolerable if one is among the unemployed.
It was announced today that there has been a loss of 28,000 jobs in the North-West since the beginning of 1971, and that nearly 60 factories have been closed. In my constituency we have had an alarming increase in unemployment. Most of the unemployed are men. There are today 2,556 men unemployed, 184 boys, 397 women and 90 girls, a total, including 35 temporarily stopped, of 3,272. That is over a thousand up on the figure last July, which was 2,225. That is the reason for my concern in bringing the matter to the notice of the Under-Secretary of State for Trade and Industry. Last month, we had a total of 3,041. This is a rapidly ever-increasing figure. It is a 50 per

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cent. growth which is causing my local authority, the local labour committees and employment committees great concern.
We are part of the Merseyside travel-to-work area. The figures for that area show another disastrous increase in unemployment. There are 10,000 more unemployed in the area this year than on 12th July last year. There are 31,164 men, 2,212 boys, 4,485 women and 1,325 girls out of work, making a total of 39,186. This means that unemployment on Merseyside is 5·9 per cent. Last year the percentage was 4·3—a total of 28,656. I am sure that the Minister will agree that this is an intolerable figure which must cause tremendous concern.
We on Merseyside find it startling, and we are wondering whether the position is now out of control in view of the national figure of 829,181, which is an increase of 67,037 since June. None of us who have suffered unemployment can look with other than fear and trepidation at the winter prospect of 1 million people unemployed, although we hope that the figure will never assume such proportions. None of us who remembers the 1930s, who left school then and understand what it was like on Merseyside, wants to see a return to those days in any shape or form.
One of the most disturbing aspects is the fact that so many young people will be leaving school over the next two months. Altogether, 450,000 young people will be looking for work—an increase of 25,000 on last year—and 15,000 are now on the unemployment register. This situation covers the constituency of my right hon. Friend the Leader of the Opposition and other Liverpool constituencies—Kirkby, Scotland, Toxteth, Exchange and others. We in Bootle are also very conscious of our difficult position.
I consulted the figures back to 1965. I could not find since then anything to compare with the present situation. But on 12th July, 1965, we in Bootle had 883 out of work, whereas today we have four times that number unemployed, in spite of action which has been taken. I regret to say that I have had to go back to the 1940s for comparative figures, so I hope that I shall not be accused of overstating my case. Recently, the Government have taken steps which were forced upon
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them because of the unemployment situation and because they realised that we have to have massive investment to create increased demand. We all applaud their action and only hope that it is not too late or too little.
In hearing my plea, the Government must consider the position of the school leavers. They must also consider many of the people I know on Merseyside who would willingly retire from industry. Many of them are men of my generation who fought in the war. Many of them find it difficult to attend work today. These men should be taken out of the labour market and should be able to live in dignity.
When I was a boy there used to be a cry in the Labour Party, "Give us work or maintenance." The cry should have been, "Give us work and maintenance." When people cannot any longer work, they should be accorded a proper dignity. The T.U.C. has given consistent warnings about this matter, and I hope that some notice will be taken.
I have covered the regional and national position in a brief way. To come to the essence of this debate, I should like to say something about my own council, which I am sure the Under-Secretary will agree has been very co-operative with industrialists and with the Government. It has certainly been very helpful to anybody who has come into the town of Bootle, which is at the north end of the River Mersey and contains the largest docks on Merseyside. We have done well. We have utilised small sites for industry. One would think it almost impossible to get a factory on some of these small sites, but with the initiative which has been shown this has been a help in preventing loss of jobs. I congratulate the right hon. Gentleman the Leader of the House on many years ago sending the first Government office to Bootle. We have since attracted other Government offices to that area, and these offices have provided plenty of work, and indeed a different and more dignified type of work for the young women of North Merseyside.
I am glad to say that in recent days in regard to the massive Inland Revenue office, which has been bedevilled by bad labour relations, we have managed to bring about an improvement in the situation. We hope that when that office is

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complete, it will bring some 3,000 or 4,000 jobs to the area.
We have done as much as we can in the way of urban renewal. We are a good education authority and an excellent housing authority. We have completed the new strand development, and have provided as many industrial sites as we possibly can.
Great difficulty was caused by Sir Arnold Weinstock's intervention in Bootle and in Merseyside. It was a regrettable incident. Those of us who helped to establish this massive factory covering 60 to 70 acres are sad to see that in all that area there is now left one man on one machine. When that man finishes his present job, that machine, like all the other machines, will be sold and taken away and this massive factory will be left. We gave English Electric key workers some 750 houses. The company said it would give us 7,000 jobs. However, we are now left with no jobs at all.
I ask the Minister what is to be done about the English Electric factory. We were promised by the Labour Government that initiative would be taken to get somebody to come in to carry on the work that was so violently interrupted. Nothing happened under a Labour Government. I appeal to the present Government to show more initiative in trying to provide some kind of fruitful employment in this factory which, to my mind, has suffered one of the most violent pieces of industrial vandalism by Sir Arnold Weinstock which has ever taken place in this country. I regret having to say this, but it is a fact.
This factory is near the greatest dock in the world. It is on the new Seaforth dock which cost £40 million to build. I have been told by the Minister for Transport Industries that, despite £40 million of new capital expenditure on the biggest dock in the world, not one solitary new job will be provided from that investment.
Very often, one reaches the position where one feels that building grants provide work. However, I can tell the hon. Gentleman that I know of a case where £100,000 of building grant was given to a well known wealthy firm on Merseyside and that the completion of the building concerned resulted in the provision of 46
176
jobs fewer than the firm had provided before the building began.
The area which I represent is still to a degree a great ship-repairing port. My town provided the Gladstone Dry Dock which, two years ago, was converted into a container berth. I believe that we need to reconsider the ship repairing facilities on Merseyside, especially when we talk about the south end docks closure.
I think that I have said sufficient to underline my anxieties. There is work to be done. The tragedy is that people can do it but are not allowed to. Everyone in this House knows how badly the sick, the elderly, the disabled, the mentally retarded and the physically handicapped need help. They could all be helped by people who at present are out of work. People who are at present unemployed could assist in the repair of cities like Merseyside, with its snarled-up transport and its polluted atmosphere. Work could be provided in all these directions. It is the will to provide work which is lacking.
It may be said that I am advocating a policy which sounds easy but which is difficult to put into practice. However, the Ford Company of America, a private enterprise firm, has taken this sort of action in some of its plants. The company says to a person, "Do you want to work?" If the answer is, "Yes", a job is provided.
I have investigated a recent case of a department store in the United States which took 16 youths from a ghetto. All of them had failed standard employment tests. They were put through a course of 10 weeks' special training. After completing the programme, 14 of them became permanent employees of the store and two were employed elsewhere. Those young people had been described as unemployable. As a group, they attained well above the level expected, and all but two of them exceeded the predictions of the sales aptitude tests.
I believe that we shall not have massive unemployment for very long. We need our young people, as we have always needed them. I ask the Minister to consider some of the ideas that we have already for training today's young people who will be badly needed by 1975, with a view to seeing whether we cannot take them out of the maelstrom of unemployment.

177
Finally, will the hon. Gentleman consider receiving a responsible deputation of all parties from my local authority?
10.28 p.m.
The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I have listened with considerable interest to the hon. Gentleman's exposition of the situation in Bootle. I congratulate him on a vigorous and moving presentation of his case.
To deal with his last point first, I shall be delighted to see him and his representatives, by mutual arrangement. I shall be only too pleased to continue the discussion then.
I sympathise fully with the hon. Gentleman's concern about the problems of Bootle, and I am glad to have the opportunity of speaking tonight, because I want to make it clear that the Government are fully conscious of the impact of unemployment in all parts of the country, and especially in development areas such as Bootle.
As the hon. Gentleman says, Bootle forms part of the Liverpool travel-to-work area, which comprises the greatest part of the Merseyside development area, and it is in the context of the Liverpool travel to work area that Bootle's difficulties must be viewed.
The total unemployment percentage rates in this area, after rising in recent months, showed a welcome drop in June to 5·5 per cent. I am very sorry to note that the provisional rate for July has moved back to the May level of 5·9 per cent. As the hon. Member will appreciate, however, unemployment on Merseyside has been persistently above the national average since long before his party relinquished the reins of Government. It goes back a long time. It it precisely because of the persistently high unemployment levels that the Government, following their review of regional policies, decided to maintain the assisted status of Merseyside, with all the substantial Government assistance that this policy involves.
There have, of course, been major closures and redundancies in the area so far this year and earlier. Many of these have been reflected in national trends in rationalisation; others have arisen from the special difficulties of the area's traditional industries, such as shipbuilding,
178
and the reorganisation of the Mersey Docks is likely to result in a smaller dock harbour force as new and more efficient handling methods spread. However, it is good to know that nearly all the workers made redundant by the closure of the Netherton factory, as a result of the G.E.C./A.E.I, merger, have since found other jobs.
The hon. Gentleman raised the question of the disposal of the Netherton factory, which is, of course, privately owned and is exceptionally large by some standards. I can assure him that our regional office maintains a register of all vacant factories in the Merseyside development area, and never loses in opportunity to bring this particular factory to the notice of any potential developer who has expressed an interest in Merseyside.
An unfortunate feature of the current unemployment situation to which the hon. Member has drawn attention tonight is the increased unemployment amongst school leavers. I need hardly stress that this is a national question of great concern to the Government. Whilst the number of school leavers in both the Liverpool travel-to-work area and in the Bootle employment exchange area is higher than those of the corresponding period last year, I understand that it is, as yet, too early to assess how many have left school for employment this summer. Some have already obtained jobs and some may decide to return to school; but I recognise that employment prospects, particularly for boys, have been affected by the closure of firms which have traditionally offered apprenticeships and by the reluctance of other firms to maintain their normal intakes of school leavers. Again, however, this situation reflects national trends, which the Government confidently expect to reverse by the economic measures taken since October last year, including particularly those announced during the past fortnight, to stimulate national growth of the economy.
So much for the "debit" side of the situation. I want to turn now to what I may call the "credit" aspects, as it were, which, in my view, give sound grounds for optimism for the future of the Liverpool area.
Forecasts by firms planning development suggest the creation over the next

179
three to four years of some 14,000 jobs, of which 11,500 will be for males. These exclude estimates of additional jobs arising from industrial projects of less than 10,000 sq. ft., as well as estimates for expansion by firms in their present premises, or indeed new jobs in the service sector. At this point I may remind the House and, indeed, Bootle, that industrial development certificates are freely issued for development areas.
As regards the creation of jobs, apart from projects such as continuance of work on the second Mersey Tunnel, for which £6 million of the total cost of £8 million has attracted Government grant there has been deliberately encouraged growth from disperal of Government Departments centred on Bootle including the Giro Centre, with 3,000 staff, and an Inland Revenue P.A.Y.E. unit providing ultimate employment for 2,000 in 1973–74. There are also expected to be 400 jobs available as a result of the establishment of a computer centre and central pay office for the Department of Employment at Runcorn. To my mind this not only illustrates the Government's concern to alleviate unemployment in the area, but also demonstrates the area's suitability for development in the service sectors.
Integral to the question of employment prospects is the subject of training. As the hon. Gentleman knows, there are Government training centres at Liverpool and Runcorn, with a total of 650 places and vacancies in certain trades, and a new centre at St. Helen's opened in May which, when fully operative, will provide a further 120 places. In addition, the Liverpool area will benefit from measures to improve and extend retraining facilities nationally for unemployed workers, as announced in the House by my right hon. Friend the Secretary of State for Employment on 20th July. These include substantial increases in training allowances, and the greater use of colleges of further education and employers' establishments for training purposes.
As regards the training of young unemployed persons, I am grateful to the hon. Gentleman for his suggestions and for others that we have had but again I draw his attention to the statement by my right hon. Friend in which he referred to consultation about the promotion of
180
more expensive training for the unemployed, including, for the first time, those under 18 years of age, in colleges of further education. Moreover, I understand that, at the request of the National Youth Employment Council, the Central Youth Employment Executive is undertaking a survey of local suggestions for training schemes, or other measures to alleviate unemployment amongst young people.
Over and above all that, however, I emphasise the fact that the Liverpool travel-to-work area is in a most favourable position to benefit from the measures of assistance accorded to development areas, as well as from the tax cuts now taking effect as a result of the Budget provisions earlier this year and, of course, the measures announced on 19th July by my right hon. Friend the Chancellor of the Exchequer.
In Parliament it is often overlooked just how substantial the benefits available to development areas really are, and I should like to draw attention briefly to some of these.
First, there is the opportunity of purchasing or renting a D.T.I. factory new, or previously occupied.
Second, there are the building grants. The rates have been increased by the Government by 10 per cent. to 35 per cent. and 45 per cent. for expansion of existing premises and for new projects, respectively.
Third, loans granted after 27th October, 1970, will reflect a more liberal approach towards general capital expenditure.
Fourth, there are removal grants.
Fifth, there is help for the transfer of key workers.
Sixth, there are three special industrial training schemes for firms expanding in the development areas, which are additional to the national schemes operated by the industrial training boards.
Seventh, there are tax allowances. The arrangements announced by the Government in October last year were considerably enhanced by the Amendment to the Finance Bill agreed in the House on 7th July. The widening of these provisions to cover equipment for services, as well as manufacturing, industries in development areas, as announced in the Chancellor's statement of 19th July, is I suggest

181
of particular value to the Liverpool district.
Still another measure of great potential value to the Merseyside development area in regard to the construction industries is the Government's decision, announced in the House on 14th July by my right hon. Friend the Secretary of State for the Environment, to authorise capital expenditure on infrastructure works in the development areas, which take effect during the present and following financial years, and I hope that Bootle will be able to take full advantage of that.
Apart from the fact that its unemployment rate has been consistently lower than that for the development areas as a whole, the Merseyside development area, despite current unemployment problems, possesses many advantages. The area includes the country's leading port for manufactured goods, and is an important banking and insurance centre, with excellent communications, and absence of severe infrastructure problems. It also enjoys the prospect of part solution of its unemployment problems in the new overspill towns of Knowsley,
182
Runcorn and Skelmersdale. At Knowsley a Department-owned site of 100 acres has been almost wholly taken up.
I know as the hon. Gentleman said, that there are sometimes difficult labour relations in the area, but this is a problem which local initiatives will, I am sure, overcome.
With all the significant varied types of special Government assistance open to industrial developers, coupled with the benefits arising from the Chancellor's measures strongly directed to stimulating the national economy, I do not think we need be too pessimistic about the future of Bootle.
On the contrary, I consider that the area is exceptionally well placed to recover from recent set backs, and I urge the hon. Gentleman and all the people of Bootle to seize the new opportunities that now lie before them.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Eleven o'clock.

TRADE AND INDUSTRY
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Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

CIGARETTE ADVERTISING
LORD PLATT LORD PLATT: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware that a Bill is at present being promoted by the Canadian Government which will have the effect of prohibiting the promotion of sales of cigarettes by advertising and other means as from January, 1972; and when they are going to promote a similar Bill in the United Kingdom.]
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, the Government are indeed aware of the far-reaching measures proposed in this Bill and will be interested to see the outcome of the debates on it in the autumn. As your Lordships are aware, we have only recently entered into a voluntary agreement with the tobacco manufacturers, and it is too early to assess
2
the effectiveness of warning notices on cigarette packets and advertisements.
LORD PLATT: My Lords, while thanking the noble Lord for his courteous reply, may I say that I cannot really consider it helpful, in view of the seriousness of the problem? Can he tell us whether the inter-departmental studies, to which he referred in the debate in March, have yet come to any conclusions?
LORD ABERDARE: My Lords, the inter-departmental discussions are still in progress and have not yet been finalised.
LORD AMULREE: My Lords, can the noble Lord say whether the Government are proposing to bring any encouragement to bear on local authorities to check or stop smoking in places of public entertainment?
LORD ABERDARE: My Lords, my right honourable friend is in touch with various bodies to see what can be achieved. He has been in touch with the broadcasting authorities, and also with London Transport. I am not sure whether he has been in touch with the local authorities. I certainly take note of what the noble Lord has said.
BARONESS SUMMERSKILL: My Lords, is the noble Lord aware that this is the first time that Canada has set us an example in the field of preventive medicine?
LORD ABERDARE: My Lords, that may be so. We still have to see what the result of the Canadian Bill is. It is not yet law, and nobody knows how it will affect smoking. Smoking, like drinking,

3
is a personal matter and more might be achieved by persuading people to give up smoking, than by attempting to do so by legislation.
BARONESS SUMMERSKILL: My Lords, may I ask the noble Lord a supplementary question? How can he regard it as a"personal matter ", in view of the fact that the individual who smokes pollutes the air for those around him to breath?
LORD ABERDARE: My Lords, that is a wider question. I do not think anybody has suggested that there is a danger of air pollution from people smoking.
BARONESS BIRK: My Lords, the Minister mentioned persuading people to give up smoking. Is he aware—I am sure he is—that the Health Education Council, of which I have the honour to be Chairman, has a budget of about £100,000 a year to combat the advertising of the tobacco companies, which is in excess of £15 million to £16 million a year?
LORD ABERDARE: Yes, my Lords; I am fully aware of the remarks of the noble Baroness. In future the advertisements will carry a warning, and therefore to some extent they will be helping our campaign to draw the attention of people to the dangers of smoking.
LORD BURNTWOOD: My Lords, is the noble Lord aware that if smoking is a personal matter so is lung cancer? Are this Government, like previous Governments, bothered about the loss of revenue which a reduction in smoking might cause?
LORD ABERDARE: My Lords, the effect on the revenue is one of the matters being considered in the inter-departmental discussions.
LORD LEATHERLAND: My Lords, as million of our people will soon be smoking French cigarettes, will the Government approach the French cigarette manufacturers to see whether they will print the same warning as the English manufacturers on their cigarette packets?
LORD ABERDARE: My Lords, I think that we are trespassing on a debate which is about to take place over the next three days.
VISCOUNT ST. DAVIDS: My Lords, why are the Government not aware of the danger of smoking to the health of other people? Are the Government aware that, as an asthmatic, I am barred from going into certain places in which there is a certain density of smoke?
LORD ABERDARE: My Lords, I am aware that certain people, like the noble Viscount, suffer from this particular complaint. Is he suggesting further measures in certain particular areas, such as cinemas and so forth?
LORD SLATER: My Lords, is the noble Lord aware that a previous Tory Chancellor stated that the amount of revenue from taxation on cigarettes and drinks enabled the Health and Education Services in this country to be developed? Have the Government in mind anything to replace the revenue that comes from these sources?
LORD ABERDARE: My Lords, this is a matter that is being discussed interdepartmentally.
LORD SOMERS: My Lords, does my noble friend feel that there is any risk that the slowing down in cigarette smoking may lead to an increase in a much worse evil—that of drug taking?
LORD ABERDARE: My Lords, I take note of the views of my noble friend, but I do not think that that situation is very likely to arise.

TAX REPAYMENTS
2.43 p.m.
LORD AIREDALE LORD AIREDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, since in Cmnd. 4729, under the heading Delay in Repayments of Tax, they say,"The analogy with the charge of interest (in certain circumstances) on unpaid tax would be to pay interest where repayment was not made within two months after the amount repayable was agreed. But once the amount has been agreed payment normally follows quickly; delay at this stage is rare…" why in these fortunately rare cases they are not prepared to abide by their own analogy and pay interest.]
THE LORD PRIVY SEAL (LORD JELLICOE): My Lords, the paragraph from which the noble Lord has quoted draws attention to the difficulty of fixing a date from which interest on repayments of tax could run. The Government's stated conclusion is that it is not practicable to devise arrangements capable of being operated by tax offices for applying a financial remedy wherever there is delay in repayment of tax; and in their view it would not be justified to introduce special rules for the very few cases where there is delay in repayment after the amount repayable is agreed.
LORD AIREDALE: My Lords, I am obliged for that Answer, but is it not the case that no similar difficulty arises in fixing the date upon which interest becomes payable if it is the other way round and the taxpayer is required to pay interest?
LORD TEYNHAM: My Lords, is the noble Earl who is replying for Her Majesty's Government aware that the Manchester tax area is particularly bad in delays in repayment of tax due to individuals, in spite of repeated requests, and can he take some steps to improve the position?
EARL JELLICOE: My Lords, I think that the question of the noble Lord, Lord Teynhani, goes rather wider. In answer to the supplementary by the noble Lord, Lord Airedale, all I should like to point out is, as is mentioned in the reply to the Select Committee's Report, that there are something like 5 million repayments a year; and it is my understanding that in the last three years only perhaps one such repayment out of, I suppose, 15 million would have been caught by the sort of rule which he has in mind. Perhaps it would be not very sensible to legislate for a 1:15 million chance.

RATING ASSESSMENTS AND CAPITAL VALUES
LORD JACQUES LORD JACQUES: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will consider relating rating valuations to current capital
6
values so that they reflect more accurately, than at present, the age of the property and the position and size of the site.]
LORD MOWBRAY AND STOURTON: My Lords, the question of using capital values for rating assessments is relevant to the Government's current review of local government finance. A Green Paper on the whole subject will be published before the Summer Recess and the Govarnment will consider, in the light of the public discussion and consultations which will follow, what changes should be made.
LORD JACQUES: My Lords, I thank the noble Lord for that reply. I will rest content and await the Green Paper.

NAVAL DEFENCE EQUIPMENT EXPORTS
LORD BARNBY LORD BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is their present policy with regard to any applications for export of (a) Naval Defence Equipment to (i) South Africa; (ii) Portugal; and (b) Defence Equipment of any character to (i) China; (ii) Cuba.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, FOREIGN AND COMMONWEALTH OFFICE (THE MARQUESS OF LOTHIAN): My Lords, so far as South Africa is concerned, apart from such equipment as Her Majesty's Government have a legal obligation to supply, my right honourable friend the Foreign and Commonwealth Secretary has stated that applications from South Africa for maritime arms will be judged in relation to British interests at the time. Our policy with regard to Portugal remains that laid down in 1961 by the previous Conservative Administration and followed by successive Governments; namely, that we do not supply Portugal with arms and military equipment for use in her overseas territories but we are prepared to supply such equipment in accordance with her reasonable requirements as a NATO ally. We do not at present export defence equipment to either Cuba or China.
LORD BARNBY: My Lords, could the noble Marquess give encouragement to the hope that, in view of the massive commitment of public funds to the shipbuilding industry and the large scale of general unemployment in the country, acceptability of orders will be looked at with favour as regards marine defence equipment, particularly if by our not accepting orders they would go to other member countries of the United Nations? At the same time, may I also ask the noble Marquess whether he can confirm that orders for submarines from Portugal, which has habitually been buying British, have recently gone to another United Nations country?
THE MARQUESS OF LOTHIAN: My Lords, the matters which the noble Lord has raised are just the sort of matters which will be considered if any new orders are received from the South African Government. So far, we have had no requests of any kind.
LORD BROWN: My Lords, is it not a fact that the restrictions on exports to Communist countries are in the interests of United Kingdom security and defence? And is it not a fact that, while restrictions on exports to South Africa are not required in the interests of the United Kingdom security, they are required in the interests of coloured people?
THE MARQUESS OF LOTHIAN: My Lords, there again I think that all these are matters which have to be judged at the time by Her Majesty's Government.
LORD FRASER OF LONSDALE: My Lords, I believe the statement that the Minister made was that no arms shipments are at present being made to China or to Cuba. Is that for ideological reasons?
THE MARQUESS OF LOTHIAN: No, my Lords, So far as I know, we have received no requests from either of those countries. If we did receive a request, of course it would have to be given consideration. But at the moment it is a hypothetical question.
LORD BARNBY: My Lords, in thanking the noble Marquess for his reply, may I remind him that he did not answer my second question as regards sub
8
marines? Would he write me if he is not able to give an answer now?
THE MARQUESS OF LOTHIAN: My Lords, I will certainly write to the noble Lord. I thought I implied by my Answer that all these are matters which have to be considered seriously when, and if, the question should arise.

ALDRIDGE-BROWNHILLS URBAN DISTRICT COUNCIL BILL
2.49 p.m.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, On moving the Third Reading of this Bill, I should like to point out to the House that, although I do not ordinarily put down more than two Private Bills for Third Reading at the beginning of the list, there are four on the Order Paper this afternoon, and three for to-morrow. The reason for this is that these Bills should, if possible, receive the Royal Assent by the Recess. I did not think it would be for the convenience of the House to take them at the end of the late Sittings we are expecting to-day and to-morrow. My Lords, I beg to move that the Bill be read a third time.
Moved, That the Bill be now read 3a.—(The Earl of Listowel.)
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

CHICHESTER HARBOUR CONSERVANCY BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
GREATER LONDON COUNCIL (MONEY) BILL
Read 3a, and passed.
D. & J. FOWLER LIMITED AND ASSOCIATED COMPANY BILL
Read 3a, and passed.
LICENSING (ABOLITION OF STATE MANAGEMENT) BILL
Read 3a, and passed.

MEDICINES (SURGICAL MATERIALS) ORDER 1971
2.51 p.m.
LORD ABERDARE: My Lords, I beg to move that this House approves the Draft Medicines (Surgical Materials) Order 1971. The purpose of this draft Order is to bring certain surgical materials within the ambit of the licensing system and certain other provisions of the Medicines Act 1968 as if they were medicinal products. The surgical materials in question are all intended for use in surgical operations and are capable of being absorbed by the body tissues. They may be ligatures, sutures or other forms of binding material or any absorbent or protective material and they may be prepared from gut or other animal tissue or from synthetic materials. The important point is that they are to be put inside the body otherwise than by means of the digestive tract and left there until they are absorbed. In such circumstances the risk of infection from unsatisfactory materials can be very high. Consequently the greatest of care is essential to ensure the sterility and quality of surgical materials of this kind. By bringing these materials within the field of licensing and other provisions in the Medicines Act that are designed to secure safety and quality of medicines it will be possible for the responsible Ministers to impose and enforce appropriate conditions relating to specification and manufacture.
At present the manufacture for sale or the importation of such surgical materials (apart from the synthetic ones) is prohibited under the Therapeutic Substances Act 1956 except in accordance with a licence. This Act will be repealed when the licensing provisions of the Medicines Act 1968 become fully operative. Accordingly the Draft Order, by bringing these materials within the ambit of the Medicines Act is designed to continue the existing safeguards and extend them to cover similar synthetic materials where the same safeguards are desirable. The proposed date of operation, September 1 next, is the date appointed by the Health and Agriculture Ministers in the Medicines (First Appointed Day) Order 1971 under the Medicines Act. I beg to move.
Moved, That the Draft Medicines (Surgical Materials) Order 1971, laid before the House on June 17, be approved.—(Lord Aberdare.)
On Question, Motion agreed to.

ROAD TRAFFIC BILL [H.L.]
THE LORD CHANCELLOR (LORD HAILSIIAM OF ST. MARYLEBONE): My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to road traffic with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission. The report of the Law Commissions is published to-day and is available in the Printed Paper Office. I shall not be inviting the House to give this Bill a Second Reading until it has been reintroduced next Session, but it is, I think, useful for the Bill to be available at present, at the same time as the Report to which it relates. I therefore beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read la, and to be printed.

FRIENDLY SOCIETIES BILL [H.L.]
2.55 p.m.
LORD ABERDARE: My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Aberdare.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to the first Commons print—Bill 101]
[Nos. 1–22]
Clause 2, page 4, line 1, after"Court"insert or, if the society concerned is registered in Scotland, the Court of Session ".
line 2, after"Court"insert"or, as the case may be, the Court of Session ".
Clause 6, page 7, line 14, leave out"£200"and insert"£400 ".
line 19, leave out from"exceeding"to end of line 21 and insert"£400 ".
Clause 7, page 8, line 18, leave out from"liable"to end of line 22 and insert"on summary conviction to a fine not exceeding £400 ".
After Clause 10, insert the following new clause:—
Increase of certain penalties under Friendly Societies Acts
".—(1) The provisions of this section shall have effect for the purpose of—

(a) increasing the maximum fines on summary conviction of certain offences under the Friendly Societies Acts 1896 to 1968; and

(b) repealing so much of section 90 of the principal Act as provides for imprisonment for a maximum of three months as an alternative to a fine of £10.

(2) In section 88 of the principal Act (fine for falsification of balance sheets etc.) for the words"fifty pounds"there shall be substituted"£400"and in section 89 of that Act (fine for ordinary offences) for the words"£10"there shall be substituted"£50 ".
(3) In section 90 of the principal Act (aiding or abetting amalgamation, transfer of engagements or dissolution of friendly society contrary to the principal Act) for the words from"to the fine"to the end of the section there shall be substituted the words"to a fine not exceeding £200 ".
(4) In section 16(1) of the Industrial Assurance and Friendly Societies Act 1948 (contravention by registered societies of certain provisions of that Act relating to permitted insurances) for the words"fifty pounds"there shall be substituted"£100 ".
(5) In subsection (7) of section 3 of the Friendly and Industrial Provident Societies Act 1968 (failure by member of committee of registered society to comply with provisions of that section as to revenue accounts and balance sheets) the words"under the appropriate registration Act"shall be omitted and at the end of the subsection there shall be added the words"and a person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding £400 ".
(6) No provision of this section shall affect the amount of the fine which may be imposed on conviction of an offence committed before the day appointed for the coming into force of that provision."
Schedule 2, page 17, line 38, after"society"insert"or branch "
line 39, after"society"insert"or branch "
Page 18, line 20, leave out from beginning to"the"in line 21 and insert—
" 23.—(1) In section 80 (dissolution of societies and branches by award) in subsection (3), in the proviso, for the words"being made"there shall be substituted the words"coming into operation, and where within that period the society makes such alterations and adjustments the chief registrar may cancel the award ".
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(2) In subsection (6) of that section for the word"publishing"there shall be substituted the word"advertising ".
(3) In subsection (7) of that section."
line 39, leave out"£10"and insert"£400 "
line 42, leave out"other than those expressed"" and insert"" or withholds""
line 44, after"words"insert"or fraudulently withholds any such property in his possession or fraudulently applies any such property for purposes "
line 46, leave out"£20 with costs or expenses"and insert"£400 ".
Page 19, line 1, leave out from"and"to end of line 3 and insert"any person who fails to comply with such an order made by a court in Scotland shall he liable on summary conviction to imprisonment for a term not exceeding two months "
line 5, leave out from"following"to end of line 14 and insert"subsections:—
(3A) If—

(a) in proceedings under subsection (3) above which do not result in a conviction, or

(b) in civil proceedings instituted for the purpose,

a court of summary jurisdiction is satisfied that any person having possession of any property of a registered society or branch has failed to deliver it up when requested to do so by the society or branch, the court may make an order requiring him to deliver up that property; and any person who fails to comply with such an order made by a court in Scotland shall be liable on summary conviction to imprisonment for a term not exceeding two months.
(3B) if in any such proceedings as are referred to in subsection (3A) of this section a court of summary jurisdiction is satisfied that any person has applied money belonging to a registered society or branch for purposes which are not authorised by the rules of the society or branch or which are not in accordance with this Act, the court may order him to repay to the society or branch the money which he has so applied; and, whatever the nature of the proceedings in which any such order is made, the order shall be enforceable as an order for the payment of money recoverable, in England summarily, as a civil debt.
(3C) Where a court makes an order under subsection (3A) or subsection (3B) of this section, the order may be appealed against as if it were an order of that court made on the conviction of the person to whom the order is directed."
line 19, leave out paragraph 27 and insert—
" 27. In section 91 (recovery of fines) in subsection (1) the words"or by the rules of a registered society or branch"shall be omitted and for subsection (2) of that section

13
there shall be substituted the following sub-subsection:—

" (2) Summary proceedings for an offence under this Act may be instituted by the chief registrar or by any assistant registrar or by any person aggrieved."

28. In section 92 (jurisdiction of magistrates' court) for the words from"and Ireland"to the end of paragraph (a) there shall be substituted the words"without prejudice to the provisions of the Magistrates Court Act 1952 as to the jurisdiction of a magistrates' court, all summary offences under this Act may be prosecuted "; and in paragraphs (b) and (c) of that section for the words"at the place where"there shall be substituted the words"before a magistrates' court acting for the petty sessions area in which "."
line 36, at end insert—
" (2) In subsection (3) of that section for the words from"abstract"to"document"there shall be substituted the words"and valuation report "."
line 37, leave out"At the end of section 99(2)"and insert—
" (1) In section 99 (regulations for carrying out the principal Act) in subsection (1) after the words"this Act ", in the first place where they occur, there shall be inserted the words"including, subject to section 98(3) of this Act, the forms to be used for any purpose under this Act ".
(2) At the end of subsection (2) of that section."
Page 21, line 20, leave out paragraph 41.
line 38, at end insert—
". In the Shop Clubs Act 1902 section 3 and the Schedule (rules of certified shop clubs and thrift funds required to contain certain provisions substantially identical with those required by the principal Act) shall cease to have effect."
Page 22, line 15, leave out"registrar or"and insert"chief registrar or any assistant registrar or by the "
Schedule 3, page 23, line 21, at end insert—

" 2 Edw. 7. c. 21.

The Shop Clubs Act 1902.

Section 3. The Schedule."

LORD ABERDARE: My Lords, I think it might be for the convenience of your Lordships if we were to take these Amendments en bloc. The majority of them are designed to effect minor improvements to the Friendly Societies Act so as to prepare the way for a consolidation measure which the Government intend to present to Parliament at an early stage. They include alterations to penalties for various offences, the effect of which is to bring the penalties more into line with modern conditions and to restrict imprisonment to a penalty of last resort. All these Amendments have been agreed by the Friendly Societies Liaison Committee and, unless your
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Lordships object, I beg to move that these Amendments, Nos. 1 to 22, be agreed to.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Aberdare.)
On Question, Motion agreed to.

BUSINESS: U.K. AND THE EUROPEAN COMMUNITIES
EARL ST. ALDWYN: My Lords, it has been suggested to me that it might be for the convenience of the House if we were to meet at 2 o'clock to-morrow and on Wednesday. I am entirely in your Lordships' hands as to whether this is more convenient, in view of the large number of speakers on all three days of the debate or whether you would prefer to meet at 2.30 p.m. as usual. I would suggest that unless any noble Lords object we should meet at 2 o'clock.
LORD BESWICK: My Lords, I should have thought that, considering the list of speakers, a 2 o'clock start might be preferable, and from this side of the House I certainly agree to it.

UNITED KINGDOM AND THE EUROPEAN COMMUNITIES
2.57 p.m.
THE SECRETARY OF STATE FOR DEFENCE (LORD CARRINGTON): My Lords, on behalf of my noble friend the Leader of the House, I beg to move, That this House takes note of the White Paper, The United Kingdom and the European Communities (Cmnd. 4715).
My Lords, I must confess to approaching this debate with some trepidation. In recent weeks we have been deluged with speeches, information, confrontations, interviews and soliloquies about the Common Market, and it occurred to me, when trying to think of what to say this afternoon, that there can be nothing new to say, no point which has not been mentioned many times, no argument which has not been aired and no elegant phrase which I can construct which has not been used countless times before. The fact that 110 of your Lordships have decided to speak in these next three days only shows that I am almost alone in holding this view. If I can promise nothing else

15
I promise that I shall discuss policies and not personalities, and that I shall be brief.
For ten years we have been seeking to enter Europe, and in those ten years many of us on both sides of the House have made speeches about successive applications and successive failures. Long before that, some noble Lords on both sides of the House were advocating our joining a European Community—prophets at that time, if not exactly crying in the wilderness, at least operating in very arid country. It seems to me that they have every right this July to look back upon what they were saying twenty years ago with the satisfaction of having been wiser and more far-seeing than their contemporaries.
My Lords, I know that there are many people in this country and in another place, but not, I think, so many in this House, who are irrevocably opposed to Britain going into the Common Market, regardless of the circumstances. They believe it to be contrary to the best interests of the country. There are others who would be prepared to go in if they thought it possible to accept the terms which were to be or have been negotiated. I respect these points of view provided that they are come by, as I am sure they are, with a deep sense of responsibility for the future well-being and welfare of this country and its people.
I do not suppose that in anything I may say I shall influence one single Member of your Lordships, and certainly no one outside, but I must declare myself, as I have on many occasions before, to be one of those who feel that the future of this country is inevitably bound up in an association with Europe; that it should be and that for it to be so is a wholly good thing, both for Europe and ourselves. Until recently I have always had to qualify that sentiment by saying that it depended upon the terms. I do not any longer feel that that is so. I am completely convinced that the terms which have been negotiated are acceptable, and indeed that they are just the sort of terms, and in some respects better, than had previously been envisaged. My Lords, I suppose that compared with those wise men who have for so long supported a European association I am
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a fairly recent convert. In common perhaps with all of my generation, and with most of your Lordships, I was brought up at a time when a very large part of the world was controlled by the British. We had a military and political power which, if not dominant, as perhaps it was for a short period at the end of the 19th century, was certainly as great if not greater than that of any other single country. And in passing I may say that I do not think that we did all that badly, either for our colonial territories or in keeping the peace of the world. We entered the Second World War, though not in such a dominant position, as one of the very big Powers.
For two years after Dunkirk we were left alone, and subsequently with the Americans and the Russians we won the war. Europe was devastated and remained so until it revived with the help of Marshall Aid and the skill and inventiveness of the people who live there. I confess that I was not wise enough, or perhaps not old enough, in those days to realise that though it appeared that we were one of the great Powers that had triumphed and had won the war, the situation in reality was very different. We won, but at a great cost. As a result of the Second World War and the rise of nationalism our colonial empire disappeared.
With the incredible rapidity of advancing technology, only countries with a big industrial base could enter into all the various activities which make up our modern world and we did not have the resources necessary. With hindsight, I suppose, these things are obvious, but at that time it seemed unthinkable, and indeed I do not believe that it would have been possible in the state of public opinion at that time that we should ally ourselves in the sense that we are now speaking of with our defeated enemies or indeed our defeated friends in Europe. They appeared to have little to offer, neither prosperity nor stability, and the scars of the war years had yet to heal. But as the years went on, it became clear, at any rate to me, that this indeed was the right thing to do, and the right thing to do on two different levels: on a national and international level, and on a purely materialistic level. All politicians, of whatever Party, are in politics, or at any rate should be in politics, for the

17
purpose of improving the lot of their fellow countrymen, to raise their standard of living, and to make it possible for the mass of the people in the country to enjoy a fuller and more agreeable standard of life. There seems to me no other honourable purpose. Of course we disagree with each other as to how that should be achieved, and dispute vigorously as to the futility and emptiness of our opponents' policies. But at any rate in our fairer moments we do not impugn their motives. My Lords, I have always felt that it was primarily for this reason, as well as for the other one to which I shall come later, for the future material prosperity of the British people, that both major Parties, all three Parties, decided to make application to join the Common Market.
Before the war there was hardly any branch of industry or technology in which we in this country were not in the forefront. Certainly in aerodynamics, certainly in electronics—so far as they existed—and in the new technologies, as they were then, we were as advanced, if not more so, than anyone else. To-day in certain areas we can fairly claim that we are with the leaders, or perhaps in some cases ahead of them, but this is certainly not true taking the whole range of technology, and it cannot be true because we do not have the resources, either financial or human, to do everything. We are hardly in the space business—I do not mean space travel so much as the technology of satellites and communications and the like from which a great many important things are developing, and increasingly will develop. In other fields we are finding it increasingly difficult to find the men and money for research and development, so increasingly important and increasingly expensive. If we go it alone I do not think that we can expect to maintain the level of comparability which we have to-day. We shall become increasingly dependent for advanced technology on the big industrial complexes in the United States and, I believe, in Europe. This is not because we lack inventiveness and skill. We do not. It is purely a question of size.
Entry into Europe would give us the opportunity, with our European friends, in an economic bloc of sufficient size, to compete on terms with the other great Powers, and give the opportunity to
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British industry, British scientists and technicians, to play a proper part in the new Europe. Of course I understand that size is not everything and that the undoubted success of the Common Market in the last ten years has not been primarily for that reason. But success there has been, and the success has been because of the economic collaboration and the impetus which membership of the E.E.C. has given to our friends across the Channel, and as time goes on that collaboration will bear more and more fruit.
Over and over again in these last years we have heard quoted the figures of the standard of living in Western Europe from 1958 to now, as compared with ours, and to our disadvantage. I cannot believe that this is accidental or that our access to Europe will not have the same effect upon us, on our industry and our material prosperity. Certainly the opportunity is there, and it has been heartening to me, and I am sure the same applies to your Lordships, to read of the confidence expressed by British industry in their ability not only to compete but to take advantage of the wider markets available—of the industrialists who signed a letter to The Times the other day, of all the top industrialists who took a full page advertisement in The Times this morning, of the noble Lord, Lord Stokes, who himself took a full page advertisement in all the British newspapers and in all the Common Market newspapers to proclaim and register his faith in his company's ability to succeed.
Of course there are compensating disadvantages which the Government have not sought to disguise in the White Paper before your Lordships this afternoon. The price of food will rise—though not by a very large amount, and nothing like so much as was feared some years ago. Nor does it appear that the effect on our balance of payments will be as serious as at one time was thought. No doubt some industries will have more difficulty than others, but both industrially and financially—for I believe that there is great scope for the City of London in all this—we shall find that the opportunities far outweigh the disadvantages.
Of course, material prosperity is not everything. As honourable men we could not countenance joining Europe on

19
terms which made the economic position in New Zealand insupportable. Nor could we disregard the obligations which we had to our friends in the Commonwealth on sugar. The Chancellor of the Duchy of Lancaster has successfully negotiated on both these points to the satisfaction, as I understand it, both of the Government of New Zealand and of the sugar producers. Of course everybody would like more. Of course one would like to get one's own way about everything. But the terms settled seem to me those which can be accepted by us and they have been accepted by the sugar producers and by our New Zealand friends. The terms are fair for them and fair for us, and he would, I think, be a brave man who would say that he believed that at any time in the last ten years we should have done any better than we have on this occasion.
But I said that there was another level on which the Common Market and our application to join it should be judged. At the time just after the war, and for some years afterwards, it was possible, I suppose, to think of an economic bloc, though not I think of a military bloc, of some similarity to the E.E.C. which would have been formed by the Commonwealth, or at any rate by the larger members of it. It became apparent fairly soon that, though this might be an attractive idea, and certainly one that would appeal to those in your Lordships' House who have lived and spent some time in the Commonwealth, it was becoming increasingly unreal. The developing white Commonwealth was making its own arrangements with its neighbours in economic terms, and the kind of union which we are talking about this afternoon became progressively less possible as the economies of Canada and Australia developed. Nor, I think, would it have been possible to have suggested it, much less to have had such a suggestion accepted by India or Pakistan, or by any of the former African territories. I do not think it would have been welcomed, nor indeed would the economic balance within such a union have proved very easy to achieve.
I have read just recently of some disappointment in Australia about the Government decision to recommend the terms negotiated by Mr. Rippon. I do not know
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how widespread that disappointment is. I suppose I should declare an interest, in I that, both in family and by long association, I am an Anglo-Australian. But I myself would doubt very much whether, generally speaking, the Australians are much surprised at the decision we have taken, or indeed overly criticise it. They have known for some time that successive Governments have wished to join. In the meantime, their economy has greatly diversified and greatly strengthened. As compared with the problems which our joining presented to New Zealand, the problems presented to Australia were comparatively minor. That is not to say that the Australian pattern of trade will not change as a result of our entry—indeed, it is changing now—and we must acknowledge that it comes at a time when their primary industry is in a difficult state. But, my Lords, the Australians recognise, just as we recognise, that a prosperous Britain, an influential Britain, can be of greater help and a better friend to them than if we were to continue our own rather stagnant economic way.
The other thing I know about Australians is this: that they have a very acute and proper sense of national self-interest, as anybody who has had to bargain with them on a Government-to-Government basis can testify. They have an equal understanding that others also have a national interest. If I felt that what we are proposing to do would damage our relationships with Australia, New Zealand and Canada in such a way as to diminish the very close ties that we have with each other. I think I should be very hesitant to go ahead, for I value those ties as highly as anyone in this House. But I do not believe it to be so.
If it was not possible to enter into a Commonwealth grouping, what then were the alternatives? Certainly not a close association with the United States, for the inequality of our economic situations and our respective sizes would inevitably mean Britain's becoming a very junior partner: and none of us would relish that. What then of Europe? I once ventured to say to your Lordships (and I do not think I was too unkindly contradicted) that almost everything that was any good in the world—whether it be art or poetry, or philosophy or invention, or the science of politics or government—had come from

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Europe, and almost everything bad as well. From Europe in the past hundreds of years have sprung the seeds of unrest and war, of conquest and cruelty and greed. Surely no collection of people can ever have been so quarrelsome over so long a period as have our near neighbours and we ourselves, culminating in the catastrophes of the First and Second World Wars. And now, because of the vision of a few men, six countries of Western Europe have decided to collaborate together in an economic union, abolishing tariffs and passports and barriers and forswearing the enmity and rivalry which had moved them for so long.
Of course it cannot all disappear in a short time. Of course there will be difficulties in the years ahead. But here is an association between six sovereign countries determined to collaborate one with the other in a new pattern of international friendship. It has always seemed to me one of the most extraordinary paradoxes of the postwar world that, while all the lessons of history and modern technology point to bigger groupings, as the world has got smaller and as life has become more complicated, the tendency has been exactly the reverse: for countries to split up into smaller and smaller units, for tiny islands to become independent, for minorities to seek to declare their independence as economically non-viable States.
Here in the E.E.C., in a very important sense, the reverse is happening, and now there is a possibility that the original Six can be increased to ten, with all the consequent advantages that that will bring to each of the countries concerned. We in Britain, I believe, can add political stability to the partnership of our European friends. We can, I believe, add an outward-looking approach to the Community, for if we just concentrate on getting rich and leave the Third World to become poorer we are only storing trouble ahead. We can bring to the Community our not inconsiderable industrial skills. We can bring with us our long traditions of stable Government and political know-how; not to lose any of them in a bigger Community, but to contribute in a bigger Community to the welfare of all.
My noble and learned friend the Lord Chancellor will, I think, be talking about
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the various aspects of sovereignty, so I will not touch upon them except to say that those who feel that this issue is vital to them cannot surely have failed to observe that the national institutions of our friends in Europe have no more been watered down or eroded than have their national characteristics. Sometimes we forget that we have for over twenty years been a member of NATO, contributing and assigning forces to that Organisation, and accepting an American as Supreme Commander and, in time of war, having the whole of the British Army of the Rhine placed under the command of a German General. I do not think that as a result there has been any diminution in our independence in foreign or defence affairs.
And as for defence—and your Lordships may expect me to say just a very few words on this subject—I do not accept that our membership of the Community would lead to any dramatic impact or action in that regard. It has been said that there will be immediate repercussions on our nuclear arrangements. That is not so. They will remain exactly as they are now. As your Lordships know, defence is excluded from the Treaty of Rome. The North Atlantic alliance provides the essential background framework for the defence of Europe. It may be that the closer association with Europe in a Community of Ten may well lead to closer collaboration, but it would seem at any rate in the foreseeable future to be related more to collaboration on arms production and rationalisation than anything else. I do not believe that, in the future, Europe, or any part of it, should or could seek to acquire a nuclear armoury on the scale which the Russians and the Americans, and no doubt soon the Chinese, find it necessary to maintain. I do not think we would wish to afford it, nor think it appropriate, for certainly it is my hope that Europe will always be allied to the United States for its defence against the Communist world. But we can be powerful economically as well as militarily, and in this way we can exert our influence and pressure in our own interests. In this enlarged Community we should have the opportunity to create a bloc which can by its size and economic strength, not dependent for its technology on anyone, by itself compete on equal terms with the giants.

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These, then, are the prizes which are there for us. It will be up to all of us in the next few months to make up our minds whether we wish to take this bold step. We could of course continue as we are, though I have no doubt that comparatively our power, our influence and our standard of life would suffer a gradual but steady decline. I have no doubt where I stand: on the side of those who saw clearly what should happen in those far off days in the late 'forties and early 'fifties. I think they were right, and I think the Government are right; and when the time comes we should take that momentous step and start to write a new and even more successful chapter for the British people. My Lords, I beg to move.
Moved, That this House takes note of the White Paper, The United Kingdom and European Communities (Cmnd. 4715).—(Lord Carrington.)
3.22 p.m.
LORD SHEPHERD: My Lords, the noble Lord, Lord Carrington, said that he rose to speak with a sense of trepidation. I ask the noble Lord to have some sympathy with me, since clearly the noble Lord, Lord Carrington, spoke with deep conviction, whereas I quite genuinely stand in the middle of the road, deeply uncertain, and have yet to make up my mind. The noble Lord referred to an advertisement in, I think, to-day's edition of The Times signed by leading industrialists. I saw an advertisement in the same paper last week signed by many notable sportsmen and entertainers, but I also saw on Saturday morning a letter addressed to the Editor pointing out the fact that Lester Piggott had been omitted but that, so far as the writer was concerned, the advertisement was worthless.
My Lords, early in July there was a real risk that, in the event of Her Majesty's Government being able to put suitable terms before Parliament, Parliament would be asked to approve those terms before the Recess. I think the Government are to be congratulated on the fact that they have resisted that temptation and have adopted the sensible and democratic course of giving adequate time to Parliament and to the country to carefully consider the terms,
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and during the period of the great debate to make up their minds on an issue which could change the whole course and the character of this nation and, in particular, our relationship with the Commonwealth. The debate we start to-day in your Lordships' House is part of that national debate, and I should like immediately to express our appreciation to the noble Earl the Leader of the House for the arrangements that have been made for this debate. The fact that three whole days could be set aside at a very difficult period of our Parliamentary Session is indicative of the noble Earl's desire to meet the wishes of the House and of the importance of the occasion, and I think we can rest assured that in October, when we are called upon to make the momentous decision, the noble Earl will have very much in mind the wishes of this House. The noble Earl could of course help the House immensely if, before we rose for the Recess, he were in a position to announce the dates of the debate and, in particular, the date on which the decision will be made.
As I have said, we regard this debate as part of the great national debate. So how should we approach our discussions? In a few moments I shall seek to remind the House of the official position of my Party, both in Government and in Opposition, towards our possible entry into the E.E.C. To-day, my Party, like the Party opposite, is divided. This is not surprising, since the nation as a whole is divided. Not only is it divided, but, in the main, there is deep confusion as to what is involved. Those of us who have served in public life are are only too well aware of the deep and sincere views, of very many years' standing, that are held by friends and colleagues on the issue of Britain joining the E.E.C. This conflict of view existed long before the question of terms arose; but with the passage of time and with the approach of the moment of decision those deeply and sincerely held views have sharpened and hardened. I have always respected those views, but I am bound to say that, with the passage of time and with the sharpening and hardening of them, they have to me become more open to the criticism of over-statement and exaggeration. I believe that the advocates on

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both sides have overstressed the advantages and the disadvantages, and in particular the economic and political disasters if we were to enter or not. I believe that the argument is far more finely balanced than we are led to believe. But these views are held, and if this debate is part of the national debate it is right and proper that they should be expressed.
The Labour Party, in the country and in Parliament, is slowly proceeding through its democratic processes to an assessment of the views of its constituent members. So during to-day and the next two days we on this side of the House shall be speaking for ourselves. There will be no restraints or limitations on any one of our Members, whether he be on the Front Bench or on the Back Benches. But, in view of the fact that some 110 noble Lords wished to speak, my own Front Bench thought it right that there should be some restriction on the number who speak from this Box; therefore my noble friend Lord Shackleton has sought, I hope successfully, to ensure that the right balance of view is put forward from this Bench. I should like to express appreciation to those noble Lords who sit on our Front Bench, and who hold very deep convictions one way or the other, who have agreed not to speak.
There seem to me to be two issues in this debate. First, is there a real case on political or economic grounds for Britain's joining the E.E.C.? Secondly, are the terms negotiated by Her Majesty's Government good enough for this country, for our EFTA partners and for our friends and allies within the Commonwealth? I think it would be fair to say that, on balance, the Conservative and Labour Parties, in office and in Opposition, believed and believe that for political and economic reasons Britain should enter the E.E.C. I said deliberately"on balance ", for there are some within our Parties who accept the economic case but are deeply concerned about the political consequences, and there are others who support the political arguments but express doubts on the economic question. There are some who agreed, with the greatest of reluctance, that negotiations should be started, perhaps in the belief that the approach would again fail and that suitable terms might
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not emerge. I think it is also right to say that at the last General Election the Conservative Party as well as the Labour Party sought no mandate from the electorate on the question of entry. The Prime Minister could not have been more explicit when he said on behalf of his Party,"Our sole commitment is to negotiate; no more, no less."
My Lords, I think it is right at the outset of this debate for me to state what is the official position, as of now, of my Party and what it was at the last General Election. We said this in our Party Manifesto:
" We have applied for membership of the European Economic Community and negotiations are due to start in a few weeks' time. These will be pressed with determination for the purpose of joining an enlarged Community provided that British and essential Commonwealth interests can be safeguarded."
There is a clear commitment for entering into the E.E.C. provided the terms were satisfactory. The important words in regard to the terms are these:
" Unlike the Conservatives, a Labour Government will not be prepared to pay part of the price of entry in advance of entry and irrespective of entry by accepting the policies on which the Conservative Party are insisting for levies on food, the scrapping of our food subsidies and the introduction of the value added tax."
These three provisos which we put into our Manifesto are clearly part and parcel of the terms which the Government themselves are prepared to put before Parliament—and let us be quite clear, the position of my Party at the General Election was that these three aspects of the terms were not acceptable.
I should now like to turn to the political question, since the problems of entry have a direct bearing on the economic question. While it is true that the E.E.C. has concentrated on economic and trading matters, the long-term intention of the Treaty of Rome is to create some form of political unity. There is no doubt, whether we enter or not, that Europe intends to proceed in a great new move forward to political unity. Speaking for myself, I am deeply convinced that such a move is essential and that only good can flow from it. As one who has been deeply committed to the concept of collective security and who has always been a strong supporter of NATO, I believe that it is impossible to be otherwise. But

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I should like to make clear that NATO must remain the instrument of defence; and since NATO is ill-equipped, and by its membership unsuited to represent the European point of view, it should not be involved in any negotiations with the Soviets and their allies. May I also say that I do not believe that NATO policy or matters connected with nuclear weapons should play any part in the moves to create a political unity? I was grateful for the assurances of the noble Lord, Lord Carrington, on this aspect.
I have an open mind about how quickly and in what form the political institutions should be set up, but I believe that through an enlarged Community we shall be able to devise ways and means of reaching a consensus view which can have a real influence on the major issues in Europe and well beyond. The Prime Minister spoke some two weeks ago about his vision of Europe. My vision is a different one. I have a vision of a united Europe embracing East and West, a Europe deeply involved with the settlement of world problems and united in solving the economic and social problems of the undeveloped world in partnership. Some may say that this is a pipe-dream; certainly it may appear unobtainable in the near future. But I believe that it would be wrong to appear content with an enlarged Community, leaving the remainder divided and fragmented.
I have no doubt that the E.E.C., now clearly an interim arrangement, is beset by its weaknesses and national interests. An enlarged Community will be a very different organisation. In all its aspects, it will become more self-sufficient and, correspondingly, there is a real risk that it could become inward-looking. We have no reason to believe that now; but there is no doubt that there is an air of protectionism spreading throughout the world, and particularly in the United States. This, in my view, would be a real tragedy. I would hope that future Governments of the United Kingdom will seek to move the enlarged Community towards progressive measures towards disarmament, détente, co-operative action overseas and a liberalisation of world trade. Having this doubt, but recognising the extent to which the E.E.C. countries participate in overseas aid as indicative of their desire to participate in affairs outside and be
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yond Europe; given the fact that there will be some form of political unity in Europe; and given the fact that in isolation, as a middle Power progressively losing influence to the super-Powers, and later I believe to the E.E.C. if we fail to enter, and to Japan, I have no doubt that on the political argument we should enter the E.E.C.
My Lords, one could dwell much longer and in more detail on the political question, but in order to keep this speech as reasonably short as possible, I will leave it now and move to other aspects. If you are a passionate supporter of entry, providing the terms are not harsh to the point of being intolerable, I think you will have no difficulty in accepting the terms that have been negotiated. If you are opposed to entry on principle, then the question of terms hardly arises. As I say, for myself in the middle ground, the terms present some real difficulties. The Labour Government laid down four principal conditions: first, the terms affecting the balance of payments; secondly, the question of capital movements; third, guarantees to the sugar producers; and, fourth, long-term trade with New Zealand. So far as the last two conditions are concerned, Her Majesty's Government have obtained, on the face of it, what appear to be satisfactory agreements, sufficiently satisfactory for no Commonwealth Government publicly to criticise them.
I think it will be agreed that an offer to New Zealand of safeguards phrased like the safeguards offered to the sugar producers would not have been acceptable to our Parliament or to New Zealand. It was undoubtedly clever strategy to leave New Zealand to the last; and to obtain a more closely worded and specific commitment than was possible for the sugar producers. Of course we should all have liked an agreement that left our long-term arrangement with New Zealand unaffected; but perhaps that is asking too much. New Zealand trade is changing; new markets are opening up and will continue to develop. Dependence upon the United Kingdom market is less to-day that it was 10 years ago, and will continue to become less whether we enter the E.E.C. or not. The Government of New Zealand were at all times closely involved in the negotiations and have accepted the arrangements. They, in the end, are

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answerable to the New Zealand electorate. However, I think that the speech of the President of France, M. Pompidou, to the French farmers did not help matters. It raised considerable doubts in the minds of the New Zealanders.
My Lords, so far as those terms are concerned, I think it is difficult to question them. One could say that they are reasonably acceptable. I wish I could say with equal confidence that this was true of the sugar agreements. The words of the arrangement appear satisfactory; but they depend upon a determined Government in the United Kingdom to ensure that the spirit is made reality. Cane sugar is slightly more expensive than beet sugar and, through the Commonwealth Sugar Agreement, we have given overseas aid by deliberately buying cane sugar at higher prices than beet, and in consequence we have restricted production of beet growing in this country.
My Lords, the farming lobby is a strong one and one must anticipate continuing pressures for increased acreage and increased refining, but in the end the arrangement depends on adequate cane sugar refining capability in the United Kingdom and willingness to pay more for the new material. Will Her Majesty's Government give an assurance that they will ensure adequate cane sugar refining capacity remaining available in this country, and can they give an indication of how this will be provided? To what extent this arrangement is bankable, in the sense that growers overseas will continue to get bank loans overseas for the estates, is questionable, bearing in mind the long period of investment involved. Here again, I wonder whether the Government can help us. Provided the Government give firm guarantees to the sugar producers and assure adequate refining capacity, to me the arrangements appear satisfactory, but without these particular guarantees I must say that in the long term the arrangement may well prove worthless.
The noble Lord, Lord Carrington, spoke about Australia. It is true that Australia is in a different position from the other sugar producing countries and New Zealand; but there are some 9,000 farmers in Australia, and clearly in Queensland there will be great difficulties. There may be special troubles involved if that sugar is put on to the world market.
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I wonder whether the noble Marquess, Lord Lothian, or whichever Minister winds up the debate, can say what assistance can be given to the international sugar organisation to remove what could be a serious impact on sugar which is in big supply?
My Lords, I have tried to give a fair assessment of the terms negotiated to meet our obligations towards those in the Commonwealth. I now turn to that part of the negotiations about which most people feel very uneasy, with complete justification. I refer to the economic and industrial questions. What are we presented with? On the one hand, it is claimed that our long period of economic difficulties and declining fortune will be over and that within the enlarged Community we shall never again need to worry about balance of payments difficulties, that there will be higher wages and longer holidays and a bigger selection of goods to buy. On the other hand, we are told that there will be dire consequences if we enter. It is claimed that soaring food prices and rising industrial costs will cripple our competitive position, that we shall lose out in the United States and within the Commonwealth and that in the end we shall turn up among the poor and neglected relations of Europe. This sort of generalisation is in my view unworthy of the real case that can be made for or against. But how can we assess the advantages or disadvantages of entry when we are overwhelmed by conflicting statistics and figures?
The White Paper of 1970 was rightly criticised because the variations given were so great that the Paper was next to worthless. The present White Paper avoids that criticism by providing scant information. If we take the figure for balance of payments in the White Paper of 1970 we find that the Labour Government, using the same base figures, and no doubt the same statisticians, hazarded a guess over a very wide range. The present White Paper suggests some £200 million by 1977. Shortly after that publication, we had reports in the Press that the figure was really £500 million. Is there any point in pressing the Government on this matter? I suspect not, for I do not think anyone really knows. Reliable forecasts are impossible, for this will depend on how quickly British industry responds to the opportunities. It will depend also on the movement of

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world prices and whether the gap between world prices and those within the E.E.C. continues to narrow.
The size of the budget is important and is clearly imponderable. Her Majesty's Government cannot say with any certainty whether the budget will grow further or decline. If one hazarded a guess one would say that the budget will increase. Anyone seeking a judgment on any of the figures given should, I suggest, treat them with the utmost reserve. In making a judgment one must recognise the very strong and conflicting counter-balancing considerations, and the trouble is that these considerations are all imponderables. No one will dispute that trade barriers hinder trade, restrict investment and prevent growth. An advanced industrial country like the United Kingdom requires a large and open market and a large Community of 290 million people enjoying an advanced industrial and social standard is clearly very attractive.
Those who support entry point to the dynamic effect on our whole economy if we enter the E.E.C. It is impossible to quantify that dynamic effect. Much will depend on how we adjust during the transitional period of five years. But those who oppose entry can still with some justification ask why should there be such a change in our fortunes in joining a market of 290 million people when we have apparently failed in a free trade area of 100 million. The answer here is that, apart from size and the possible inclusion of a rich and industrially powerful country like Germany, the E.E.C. is a very different organisation from the free trade area. The E.E.C. has adopted coordinated policies and Member States are required to adhere to them. To some extent there is a loss of sovereignty or restriction of Parliamentary power. But I think it is also fair to point out that even if we remain outside the E.E.C.—and certainly over past years this has been the case—there will be some restriction on Parliamentary sovereignty.
But, my Lords, I accept that in a dire national crisis Member States may react contrary to regulations, as the French did when they devalued twice and Germany did when she revalued the mark. But clearly this must be an exceptional circumstance. In past debates we have
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spoken of the need for more industrial development, regional development and the growing need for investment. I was most impressed by the figures given by Mr. Jenkins concerning export costs and prices and home prices within the E.E.C. which have all fallen since 1960–61, whereas ours have risen. I thought this a very important point, but then I read in Saturday's newspaper a letter from Mr. Enoch Powell which challenged this view and showed figures which were even better of countries which were outside the E.E.C.
Be that as it may, it must remain clear that if we remain outside our existing export markets could be eroded progressively. We shall require all the investment we can lay our hands on in the transitional period and beyond, but I have real doubts about the period agreed for the freeing of capital movement. Capital investment in industrial production, like all investment, is attracted by profit. I strongly suspect that in the next few years industrial profitability is unlikely to rise but is more likely to fall whether we enter the E.E.C. or not. If we free capital movements too soon that may well lead to a drift of United Kingdom capital to more profitable enterprises in the E.E.C., with a subsequent loss of employment and a further weakening of our own economy. It may lead us to continue our present rates of interest which, in all conscience, to-day are too high.
We on this side of the House attach very great importance to regional development and the need for special measures to encourage industry in the regions. I note that in the E.E.C. there is no specific policy towards regional development. I hope that the Government will be able to make a full statement on this matter during the debate. We have very special problems here, and I believe that special arrangements will have to be made. I think it is certainly true that by October we shall need a full statement on fisheries; and we should expect an agreement to be reached before Parliament is called upon to make a decision.
There is one aspect of economic and regional policy which has not yet been mentioned, so far as I know, in any of our debates. It is easy to talk about increased production and larger sales in

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Europe. Transport and handling costs are to-day a major factor in our export prices. Our ports and roads are inadequate for even the present flow of trade. Costs are very high, and there are big delays. Have the Government any new policy in regard to port development, particularly on the East Coast? And have the Government anything further to say about the Channel Tunnel? It may be that the Chancellor of the Exchequer when he speaks in another place to-day, will make a statement on the whole question of sterling. Most of us will look forward to the day when this country will not be called upon to support a reserve currency and we are free from the present severe restrictions. Sterling holders need to be protected, but it is vital that there should be no fixed or harsh repayment programme. I wonder, again, whether the Government can let us know what thoughts they have on this subject.
Speaking of safeguards, my Lords, the White Paper gives assurances about pensioners and those who are on State benefits. There are many who are on the borderline, and particularly those on fixed incomes, for whom the impact of higher food prices and the consequences of a value-added tax will be most severe. We shall need great flexibility in our treatment of these people. Can the Government give us any information about their present thinking in this matter? There are many other matters that one could raise on the economic aspect of entry, and no doubt they will be raised in the course of the debate.
As one who has not the comfort of deep conviction either way on this question and who, when the decision has to be taken, will have to act perhaps more on faith and hope than anything else, it seems to me that one thing is clear: that the great new future that is claimed will be opened out before us if we enter will not come about through an accident or by infection. The problems of balance of payments and unemployment, and the inequalities that exist within our nation, will not disappear overnight. Entry into the E.E.C. will not solve these problems, but may well aggravate them unless Her Majesty's Government commit themselves to policies which will provide sustained growth in the economy; policies which make it possible for all sides of industry
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to co-operate in greater efficiency and higher productivity; and, equally important, policies which more equitably distribute the benefits of our labours and endeavours. Here the Parties are divided. We on this side of the House, whatever may be our views on the issue before us, lack confidence in Her Majesty's Government so to order our affairs that we shall be able to respond to the undoubted challenges and opportunities of the wider Community.
My Lords, if I were called upon to express a view on the terms negotiated, it would be as follows. Taken as a whole, they are not harsh or intolerable; but, on the other hand, they are far from generous. One would have thought that there would have been a greater recognition of our material and financial burdens and of all we have done to sustain defence in Europe. It seems to me that there is another question to be asked. Can we afford these terms in our present economic position? It is the misfortune of this country that we are called upon to make a decision during a period of economic stagnation bordering on depression; when unemployment stands at the highest figure for some 31 years; when there is a real possibility, as a consequence of the Industrial Relations Bill, of industrial unrest, such as we have not seen for many years; when investment remains at a low level; and during a period when research, both private and public, continues to be cut back.
These terms would be bearable if, when we enter, the economy was buoyant and confident. But what confidence can we have when we look at the present policies? It is claimed that the Chancellor's actions last week will boost the economy and provide us with a sustained growth. The Prime Minister is confident; but I do not find this confidence in industry to-day. The present view of the measures announced last week is that they were too much, and certainly too late. If we get the anticipated boom, is there any reason why we should not get the traditional balance-of-payments difficulties in 1973, perhaps with the traditional deflationary policies, just when we are about to enter? I feel bound to say that I have a deep sense of foreboding about the condition of our economy when we enter, and that the impact of our entry will be grave indeed.

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My Lords, I would support our entry, and would accept the terms negotiated, provided that there could be confidence in the adoption of policies that brought about sustained growth based upon the export-orientated sections of our industry, and policies that brought about co-operation throughout the nation. But, for myself, that confidence does not exist, and certainly I shall need to wait until October to know what I shall do when the Division is called.
3.57 p.m.
LORD GLADWYN: My Lords, I suppose that in simply"taking note"of this White Paper we are nevertheless expected to stand up and be counted, in the sense of saying clearly whether we approve of its proposals or not. Speaking on behalf of the Liberal Party, I need hardly say that we do. Though we have a few dissentients, the party as a whole has never wavered on the question of principle. As in other instances, it was years ahead of the other Parties in accepting that principle. And for a long time it has also recommended the sort of terms for our entry that have now been more or less agreed.
Since it seems to be in order to say a word about one's personal attitude on this matter, perhaps I may say that, so far as I am concerned, I was not actually what is called a"European of the first hour ", of whom there are happily some representatives in this House. No doubt therefore the collective wisdom of the Party which I have the honour to represent was originally superior to my own: I would not dispute that. During the war, and after it, it is true that I was strongly in favour of some close association of all the Western European democracies; though I was at the time, quite frankly, opposed to some of the conclusions of the famous Hague Conference of 1947. I was opposed because I did not think that the type of federal solution there proposed was then practical politics. Besides, it was always completely unclear to me whether the intention was that Britain should actually form part of such a federation or not.
But it is also true that ever since the coming into force of the Treaty of Rome at the end of 1957 I have consistently said that we should inevitably
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one day have to join the European Economic Community, if we could. Since then, two British Governments of quite different political convictions have come to the same conclusion. Twice an attempt to join was simply vetoed by General de Gaulle, who was a great one, as we know, for trying to arrest, if not indeed to reverse, what most informed people might conclude was a logical and historical process.
My Lords, these vetoes did great harm, partly because they actually held up the development of the E.E.C. itself; partly because they resulted in the Six adopting a Common Agricultural Policy without what might be called the"advice and consent"of the other Western European democracies, in particular our own; and chiefly, perhaps, because they cast our own proud nation in the role of a sort of rejected supplicant. Even now it is not absolutely certain that we shall not on the rebound reject the Community and try to pull ourselves up with our own boot straps, in accordance with the pure milk of nationalist doctrine. Nationalism is one of the strongest instincts—only rivalled, perhaps, by aggressiveness or sex. But all are instincts which, however natural in themselves, must be directed into constructive channels if our civilisation is to survive in a very dangerous age. In France extreme nationalism, in the shape of the Right Wing Gaullists, nevertheless persists. In Britain, the exact analogue of these Gaullists is the anti-Common Marketeer.
Happily, as we all know, there is now a new spirit abroad on the other side of the Channel, and in spite of the now outdated and increasingly unconvincing activities of our own nationalists, there seems to be a growing feeling in Britain that isolationism in the modern age makes absolutely no sense. I must say that for the last 14 years or so it has made absolutely no sense to me. Ever since 1957, I have repeated that if we did not join the European Economic Community—provided always that it did not break up—we should become more and more isolated and thus in a world of super-States or potentially super-States increasingly second-rate. The Free Trade Association of the Seven, which only gave us an additional home market of some 40 million or so, was not designed to last and had no political content. The

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Commonwealth was, economically speaking, obviously a wasting asset. Union with America was out of the question; undue dependence on her would turn us into a simple satellite. Therefore, as it seemed to me, the longer we stood outside the European Economic Community, the more probable a decline in our standard of living as compared with those nations inside the Community, the more frequent our periodic"stop-go"crises, and the more likely that we should in the long run have to support a large number of unemployed if we were to avoid some disastrous inflation.
Although, naturally, a number of economists can be found to dispute some or all of these contentions—after all, it is always possible to find economists to contest any contention—the fact obvious to all but the blind, is that all these chickens have now come home to roost. Since 1958, in fact, British Governments of varying political complexion have all struggled with an economic situation which was bound, as I believe, to get gradually worse, whatever domestic policies were pursued by whatever Party. It is not, therefore, so much our politicians who have been to blame; it is surely something vicious in the whole post-war system. Take France and Italy, for example; both had empires before the war. Italy was deprived of hers, that of France were slowly liquidated after the war, and it is greatly to de Gaulle's credit that he in no way prevented—indeed, he actually encouraged—that process. But neither country then tried to support a world currency and behave as a world Power, although it is true that France pretended to do so under General de Gaulle. They joined the European Economic Community and in so doing harnessed themselves to a great coordinated Western European effort, largely dependent, of course, on the vast economic potential of Western Germany. As a result—or at least partly as a result—the French, with 12 per cent. fewer people, are now superior to us, even if slightly superior, in all relevant economic respects: gross national product, real wages, standard of living, full employment, social benefits—or most of them pensions, holidays, aid to underdeveloped countries, anything one likes to mention. Even Italy is rapidly catching up, in spite of the huge historical burden of the Mezzoqiorno, and
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Germany of course is far ahead. If France and even Italy could do all that, why could not we? The answer is perhaps that the British people have not even now realised that nobody owes them a living, and if they want to preserve their standard of living they simply must abandon their illusions and old-fashioned industrial practices and move with the times.
But it is not only our standard of living that is now in question, unless we turn over a new leaf. It is, quite possibly, our whole way of life. All over the world free societies—that is to say, countries in which expression of opinion is free and the people are entitled to elect their own representatives in Parliament freely—are in danger. Outside Western Europe not a great many genuine democracies survive. If a country's economic situation deterioates to a certain point for a certain period, there is considerable reason to suppose that some"strong"Government will take over. It could be of the Left or of the Right. But the appeal will be undoubtedly to the nationalist sentiment, as in war time, and the essential feature will be that everybody will just be told what he has got to do.
What reason is there for thinking that our own economic situation will not continue to deteriorate, relatively at any rate, if we fail to get into the Common Market? The present Tory deflationary policy—now, as I understand, temporarily discontinued—may succeed in the short run, as we must all hope that it will. But failing some major change in, so to speak, the structure of our society, I am afraid that it is only too likely that improvement will be followed by further stagnation—in fact, the old phenomenon of"stop-go ". The need to protect the pound, the insufficient rate of growth, the burden of the sterling balances, all these things will still be with us and there is absolutely no reason to suppose that, confronted with a grim reality, a Labour Government would be any better qualified to cope with them than the Tories—unless, as I say, under the influence of the so-called"Left ", they had recourse to the rather desperate alternative of a directed socialist economy.
So we come to the prospects of a real recovery if we do succeed in entering

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the Community, and this admittedly depends—I do not blink this fact at all—to a considerable extent on the terms for entry which have now been largely agreed. There is no need for us to dwell on the conditions affecting New Zealand and other members of the Commonwealth. They have been accepted by all those concerned with the exception of Australia, whose Government is any case has not formally protested, as I understand it, and whose general attitude towards this country has been rather well described recently by no less a person than Mr. Roy Jenkins. It is evident to all that they would also have been accepted with enthusiasm by a Labour Government and it is best, at any rate in this House, to draw a polite veil over the utterances of all those who suggest the contrary.
What may in the event prove unduly burdensome, of course, is our necessary acceptance of the Common Agricultural Policy of the Six and all that that entails in the way of possible loss of certain markets, dearer food and a very considerable subscription to the Central Agricultural Fund. But here we must also remember, as the noble Lord, Lord George-Brown, and many others have told us, that Mr. Wilson's Government were prepared to negotiate on the basis of acceptance, in principle, of the Common Agricultural Policy; so it can hardly be denied that they too were willing to accept any unfavourable consequences indirectly arising therefrom, in return for the long-term benefits which were also confidently expected. Nor can it reasonably be maintained that they would have succeeded in getting the Six to agree to a smaller subscription to the Fund and one more spread out in time than that just negotiated by Mr. Rippon.
Whether the net result will be an intolerable burden on our balance of payments is something that no one can possibly say—and here I would follow the sentiments just expressed by the noble Lord, Lord Shepherd—because, after all, it depends on a number of quite unknown and unpredictable factors, such as changes in the world prices of foodstuffs; the terms of trade generally; the possibility or otherwise of a recession or increased protectionism in the United States of America; the extent to which our own
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farmers may increase their production; and, above all, as I think the noble Lord, Lord Shepherd, also said, on the extent of the fillip to our national productivity which will be given by joining.
The fact is that if things go well, the burden on our balance of payments will not be noticed. If they go wrong, we shall just have to concoct remedial measures with our partners, as the French did when things went wrong for them in 1968. What I say—and this is one of my chief points—is that it would be far better for us, if things go wrong, to negotiate inside a great Community of which we shall be a leading partner than it would be if our rather isolated economy once more gets into rather a sad mess and we are again at the mercy of the International Monetary Fund. In other words, the whole operation, as I see it, is economically speaking a dash for freedom; and this is where Mr. Douglas Jay's statistics fail to impress. He has compiled a formidable dossier of figures—some of us may think that they are unnecessarily inflated figures—showing that we shall be bankrupted if we join the Community on the present terms and things go wrong. But he completely ignores the figures indicating that we are likely to become an increasingly down-at-heel offshore island if we do not join, irrespective, I fear, of whether outside factors are favourable, as they often have been in the past, or the reverse. All the probabilities are, indeed, that in the course of our dash we shall not be shot down by Mr. Jay's statistical machine gun, given only that we pull ourselves together, work hard and make use of the great new opportunities which will certainly be afforded us.
But, my Lords, if we are to gain anything very much from our dash for freedom there is one aspect that we should consider very carefully before we jump over the barbed wire. For the whole new extended Community just cannot develop its huge potential—that is to say, it cannot unleash the great power at its disposal—unless it so organises itself as to permit some decisions to be rapidly taken in the interests of the group as a whole. And if it is to do this it must employ certain supra-national techniques. There is no other way, and I think the Liberal Party has been consistent in so

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maintaining. It is no use pretending that the Community can work satisfactorily—if indeed it can work at all—if every member in all respects preserves absolute freedom of action. It is dishonest to suggest it. In other words, there must be a Commission which is permitted to function, broadly speaking, in the way laid down by the Treaty of Rome. There must be a Parliament which is awarded greater power over the Community budget than which it now possesses; and, above all, there must be acceptance in principle—and I say only in principle—of weighted majority voting in the Council of Ministers in certain well-defined, though limited, spheres. Those are the essentials.
None of these things means that we shall be entering a federation in the usually accepted meaning of the word. It simply means that our ancient nation States, while preserving their identity, their traditions, their political institutions and separate ways of life, must agree to take certain decisions in common in accordance with a recognised democratic procedure. If they do not, it is not a Community that we shall be joining, but a Customs Union. On the whole, it would probably be better to be inside this Customs Union than outside it, but it is quite unlikely that entry into such a Customs Union only would give the necessary fillip to our ailing economy. We shall, we know, be starting off on the basis of the famous"Luxembourg compromise ", but once we are in it must be in our own interests to do our best to see that this is modified in the right direction by common consent.
It is not only in the economic sphere that we shall have to be thinking about new techniques regarding creating a real economic European unity. I know that when one speaks of defence in connection with Europe it is, as it were, anathema to some members of the Labour Party, including perhaps, judging from his recent remarks, its Leader. But we really should not bury our heads in the sand. Defence is not only a question of NATO, though it is of course chiefly a question of NATO. It is also a question of a United Europe, and so it is a question of the defence of the European Community; and one of the first problems with which we shall be faced when—because I think I really can now say"when"and not"if "—
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we join the E.E.C., is how the extended Community should as a body react to the obvious intention of the Americans to reduce their forces in Europe over the next few years, perhaps in the light of some bilateral deal with the Russians on SALT or strategic arms limitation, but quite possibly in the absence of such a deal.
Unless we simply want to throw in our hand, in which case we shall be at the mercy of the Russians, we shall have to work out and then agree with the Americans within the sphere of the Alliance a common policy on the"conventional"defence of Western Europe and improve our machinery for arriving also at a common foreign policy, noticeably over such areas as the Middle East. To the embattled members of the British anti-Common Market Left, a bald statement of this sort is a kind of abomination, as I understand it—pure cold war. As they would say, why not disarm, withdraw from Europe and let our great neighbour in the East extend his brotherly influence over neighbouring States in accordance with the socialist doctrine of Brezhnev? Why not break with the Americans and accept the so-called"Finlandisation"of Europe? It is not members of the Labour Party sitting here on the Front Benches who hold those views, but they are certainly held in Left Wing socialist circles.
My Lords, if we cannot soon work out a new political and defensive system in Western Europe within the framework of the Western Alliance, this may be the sort of fate that will shortly confront us. But the necessary machinery is there, and by adapting and enlarging the present Western European Union structure it would be perfectly possible to transform it into what might be called a political and defence wing of our extended European Economic Community. It is not a question of leaving NATO and setting up a sort of Third Force. Of course not. But it is very much a question of forming a new democratic community which, within the Alliance, will to a large extent be responsible for its own defence. I do not say that it will be a nuclear body that will have to be thought out. But it must be responsible for its own defence. If we have a common defence policy, involving the standardisation of our weapons, there is no doubt that we shall

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he able to save a great deal of money into the bargain.
Finally, let us not imagine that by formally approving the terms next October and joining the E.E.C. we shall be entering a sort of Promised Land, still less a Garden of Eden. The growing pains inherent in this operation will be considerable. There will undoubtedly be rows and crises. Often we shall be annoyed with our new partners, and they with us. Nobody can say exactly how we shall eventually settle down. For a time it may even appear that the short-term sacrifices outweigh the long-term gains. But what there will be, if only, as I say, we accept a minimum of supra-nationalism, is an atmosphere of experiment, of high endeavour, of great new transport plans; of common educational projects; of vast and outward-looking schemes for organising international trade with, and aid to, the underdeveloped countries on a new basis; of group proposals for saving the environment and cleaning up our society by common accord. Western Europe, where the whole process of industrialisation started, should be the place where it achieves its final and, we would hope, triumphant consummation. If it does, its influence will undoubtedly spread further and further towards the East. It is for us to recover the optimism of the 19th Century and demonstrate the essential soundness of the civilisation of which we, rather than the great nations of the periphery, shall no doubt represent the final stage.
It may be that considerations of this sort will scarcely appeal to some of our more elderly nationalists—and certainly not to all noble Lords; but they will, I am sure, appeal to the younger generation. There is strong reason to suppose that, once we provide the framework, they will move in and will be able to make it function in ways which we are not able now to imagine. But, first, we must construct the machine.
I have little doubt that the proposal which we are now examining will eventually be approved by Parliament. This, as I understand it, is the conviction of about 80 per cent. of the British people who, even if 70 per cent. of them admittedly know little or nothing about the details, are nevertheless pretty shrewd
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when it comes to judging how things are going to go. Even that great comfort of the anti-marketeers, the recent large majority in favour of saying"No"to the Market, has now sunk to a mere 42 per cent. of those interrogated, which is not even a majority if the"Don't knows"are taken into account. After the holidays, unless perhaps too eager politicians on both sides bore people stiff by their efforts on the small screen, the figures may even be better. By then it may quite possibly not be the Marketeers but the"Antis"who are out on a limb. Can it be that even Mr. Wilson, conforming to a change in public opinion, might swim back to the ship which he has just rather inelegantly abandoned? At the very least, he might be prepared to allow his supporters the liberty of the vote. If the Prime Minister, while urging his own supporters to follow his example, could adopt in this last respect a broadly similar line, that would be perfect.
In any case, my Lords, nothing can shake my own conviction, and that of my colleagues, that in joining the European Economic Community, even at this late hour and on terms more onerous than we could have obtained ten years ago, this country will at long last have discovered its true post-war destiny and that, whatever disappointments there may still be, we shall before long be heading towards a happier, a more prosperous, and indeed a more honourable future.
4.25 p.m.
LORD SHERFIELD: It was fairly recently—in January in fact—that I spoke in this House in favour of Britain joining the Common Market if fair and acceptable terms could be negotiated. I have no intention of repeating what I then said—it is on the Record—except to observe that in my opinion the terms now recommended are in general better than I personally expected, and I therefore follow the noble Lord, Lord Carrington, in finding them acceptable. I do not see in them anything which will impair our sovereignty, upset our economy, undermine our social policies, or pollute our culture. On the contrary, the terms give us an opportunity to improve our prospects of economic growth and resume a role in the world commensurate with our political experience and our industrial and technological resources.

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Having said so much, I shall not roam at large over the wide pastures of the White Paper, or try to compete in breadth of treatment with the three preceding speakers. I shall limit my brief remarks mainly to one point on which I have some little knowledge and which has not, I think, figured largely in the great debate, though it has been touched on here and there. I refer to the consequences of joining the Communities for the small and medium sized British firms; that is to say—depending on definition—firms constituting between a quarter and a third of British industry and commerce.
The large British multi-national and national companies and financial institutions have, for some years, been on record as favouring our entry, and a number of industrial leaders have recently reaffirmed their belief and confidence in letters to The Times. The opinion of smaller firms is not so clear cut. They are less vocal, and many of them may not yet have given the prospect their full attention. It is obviously dangerous to generalise about so large and diverse a group of companies, but I have some contacts, both direct and indirect, with a large number of smaller firms, and perhaps one or two inferences can legitimately be drawn. To some extent, the prospect for successful growth within the Common Market depends on the industry of which the particular firm is a member, but, by and large, it appears that an efficient and well-managed small firm has nothing to fear from entry and much to gain; while the inefficient small firm has very little future inside or outside the market unless it improves its management and its performance. The efficient firm will be poised to take advantage of the wider market, but the inefficient will face more intense competition from the rest of the community.
I have recently taken a fairly broadly-based sample of some small firms, and the reactions to a direct inquiry have varied from enthusiasm to optimism as regards the effect of membership on their business prospects. Their replies usually refer to the advantages of larger markets, lower entry tariffs, and increased opportunities for the efficient. Nor do they seem to be very much concerned about the effect of increased competition at home. I think there is a general realisation
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throughout industry, large and small, of the advantages of access to a market of 300 million people. I have been rather surprised by the strongly positive nature of this reaction. Of course, it is a relatively small sample; some firms expect to do better than others; and some may have misjudged the situation. But I have encountered no opposition, and what is good for the firms is good for the employment in them. The fact that I have found no opposition to entry in this sector does not mean that it does not exist. But it is perhaps not unfair to suggest that opposition is likely to come from inefficient operators, whether in industry or, indeed, in agriculture, and not from alert and enterprising managements.
The competitive advantages of small firms are flexibility and speed of reaction. The Common Market represents an opportunity to be exploited, and the good firms, the ones which react quickly and decisively to changes in their markets, will prosper. Many smaller firms are already selling effectively on the Continent. Others could and should follow their example. As for the increased competition in this country, to which I have just referred, it must be remembered that the Six offer a better and larger additional market to us than we offer to them, and it seems likely therefore that the British market will be less attractive for small Continental companies than the Continental market will be for our small companies. The point is that small firms sometimes compete with large firms, but their chief competition is from other small firms. So to that extent the danger of some of our small firms being stifled by increased competition in the United Kingdom will be mitigated.
Many small and medium-sized firms are already prepared, or preparing, for our entry, but the realisation of the opportunities has not perhaps in general been translated often enough into action: into market research, into analysis of competition, into training of staff, and so on. Chairmen and managing directors are disposed to favour our membership, but perhaps without doing enough about it. There is no time to lose if the many remarkable and enterprising small firms in this country are to get off to a start that their products merit. Recently small firms have been exhorted

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by, among others, the Confederation of British Industry and the Institute of Directors, to study the effects and the opportunities of our entry fully and seriously, and I must say that I hope that these exhortations will be heeded.
My Lords, perhaps you will allow me to add a few general words in conclusion. I have never felt emotionally about going into Europe: I have not been, like the noble Lord, Lord Gladwyn, who has just spoken, for many years a committed European. For a long time I kept an open mind, which is probably a euphemism for sitting on the fence. But as this country fell economically behind its industrial competitors, as conceivable alternative policies were revealed as failing for lack of political support or changing patterns of world trade or politics, I came to the firm conclusion that it was in our long-term interest to become a member of an enlarged European Community. I formed this view not just for the negative reason that we had nowhere else to go, but on grounds of positive advantage. I concluded further that it was not only in our long-term interest, but in the interest of our allies and friends in Europe, including EFTA, in the United States and, indeed, in the Commonwealth, that we should join Europe.
I believe that most well-informed people in these allied and friendly countries realise that this is so, and that if their own country is likely to suffer a measure of commercial disadvantage in the short term, they are ready to accept this. Let me say, on a point raised by the noble Lord, Lord Shepherd, that I believe it will assist in developing relations with Eastern Europe as well. My Lords, we now have an opportunity of entering the Community on relatively favourable terms. I do not think it will recur. I hope we shall take it.
4.35 p.m.
LORD POLWARTH: My Lords, the prospect before us to-day is nothing new. Two hundred and sixty-five years ago, in 1706, Scotland was faced with a decision every bit as important, relatively, as that with which Britain is faced to-day; namely, whether to enter into a Union with her larger and more prosperous partner to the South; a decision which once
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taken was to affect the whole history of Britain, just as such a decision will do in the case of Europe to-day. The circumstances were remarkably similar; there had been at least two previous abortive attempts; the concept was unpopular in many quarters in Scotland, among the public, the Church and elsewhere: there was fear that sovereignty and national identity would be lost; and it was not much more popular in England either. Just like to-day, differences of opinion seem to have cut across the usual political, religious and other lines. The preliminaries, too, bear a strong resemblance: the proceedings of the Scots Commissioners appointed to draft the terms; the late-night sittings of the Scots Parliament. All can be compared to the recent comings and goings in London and in Brussels; there was pamphleteering and politicking, and many of the arguments used were very similar to to-day's.
It may seem remarkable that, despite so much opposition, Union came about. But why was that? It was because the leaders of the day saw that Union was both necessary and desirable if Scotland was to win her share of the world's prosperity, and keep pace with the growth of other nations. They knew there would be drawbacks, and they knew that the advantages would be slow to bear fruit; but equally they saw that in the long term there was really no possible alternative—and with that conviction they were prepared to act as leaders, rather than bow to vested interests and heed the murmurings of the uninformed. That they acted in the interests of both countries alike is shown by the state of Scotland to-day compared with what it might have been, and by the contribution which Scotland has made to England and the world at large. In passing, it is relevant to note the shrewd observations on the opponents of Union made at that time by Daniel Defoe, who was installed by the English in Edinburgh as an"undercover"observer (and I think that was something of a euphemism) of the Scottish deliberations. He said that the opponents never dreamed that in deciding to unite:
"…a new national interest was to be created; and that giving or conceding rights, advantages and interests, whether in commerce or in privileges, was losing nothing at all, but

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was like a man giving presents to a lady whom he designs to make his wife."
My Lords, with that historic event in mind, perhaps, I may concentrate briefly on Scotland's hopes and fears in these negotiations of 1971.
That there should be anxieties is not surprising. Farming, for example, is of great importance to us in the North, and we pride ourselves on its high standard. Others better qualified than I am will be speaking on this subject—but it seems as if some of our worst fears with regard to the effects on our agriculture, and particularly on our hill farming, have been allayed in the recent negotiations. The subject of fisheries will, I know, be raised by others, but it seems clear that the present policy of the Six would be most harmful to the inshore fishing industry, and I sincerely hone that the Government will not give way on this policy, even if it means reserving our position till after we have joined.
Turning to industry and its development, we in Scotland have two main concerns. The first is the need to maintain and develop regional policies which will enable us, and other similar areas, to attract and hold our share of those industries which will gain most from the Community's growth and prosperity. Scotland owes much to existing policies developed over the years by successive Governments of both Parties, with the help and advice of many of those involved in different fields of Scottish life.
But the battle for a better spread of industry and development is not yet won, as witness the severity of the present industrial set-back in Scotland; and it would be a tragedy if anything in the policies of the Community were to frustrate Britain's efforts in this field. It has been said recently by Government spokesmen that, in their view, our present policies in this field are fully compatible with what the European authorities would approve. I hope, like the noble Lord, Lord Shepherd, that we can have a categorical assurance on this subject in the course of the debate. I understand that as yet no common policy for regional development in the Community has been drafted, far less agreed. Therefore, by early entry we have an opportunity to influence the shape of those policies and to contribute the great experience we in this country have acquired in this field.
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Our second main concern arises from our geographical position. In some re' spects this is of course a blessing. We are spared some of the horrors of the overcrowded Midlands and South. But there is no doubt that our distance from the concentrations of population and the centres of decision-taking in the South has been one of the obstacles to our growth—even if in many cases the obstacle has been more psychological than real. So we have always worked to secure better communications, and not without some success. Now, however, with entry into Europe we shall have to press for far better communications direct from Scotland and the North to the Continent, without passing through the frustrating bottleneck of London. It is not surprising that thinking in the South should have turned first to a Channel tunnel and to motorways converging on the Channel ports, all of which, while they may well help industry in the area, will distort the distribution of industry within the country and make life in the South-East increasingly unpleasant. What we must do—and this is our Government's responsibility is to give every encouragement to the development of alternative routes. At sea, as has been suggested already, we must develop our ports in Scotland and the North-East and services in Scotland from them. I see no reason why these should not be eligible for official help as part of the"infrastructure "—a form of aid which is apparently approved within the Community at present.
We also have in Scotland a unique asset in the deep water of the Clyde Estuary, which with encouragement and foresight could become a gateway to Europe, enabling goods to be transhipped from Scotland to smaller vessels to cross the North Sea to their several destinations, and so avoiding the crowded and increasingly hazardous passage through the Straits of Dover to the Continental ports. The Scottish Council's Study of these possibilities, under the title Oceanspan, is in the Government's hands and I commend it to them for thought and action.
Above all, there is the question of communication by air, which is so vitally important to business to-day. Our air routes in this country have developed just as our railways did over a hundred years ago. British European Airways sit at

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London Airport, rather like a spider in the centre of its web, and, with the exceptions of, I think, only two flights a day, in order to reach any destination on the Continent from Scotland one must change 'planes in London, with much frustration and delay. For example, practically all connections from Edinburgh to Paris involve one hour and 40 minutes between flights in London, and an elapsed time of nearly four hours from airport to airport, which in these days is quite ludicrous. If we are to have the best chance of attracting European industry to Scotland and developing our markets as we should, we must ask the Government to give the most active encouragement to the development of direct air links with the Continent.
I have spoken of Scotland's concerns so that the Government may be aware of them and reassure us on them. What I am convinced of, however, is that they fade into insignificance beside the benefits which entry can bring to the United Kingdom and to Scotland as an integral part of it. West German investment here, for example, is already growing. One of their Ministers at a recent meeting in London forecast a dramatic boost to such investment in Britain after we join the Market; and Scotland, with her industrial skills and experience, stands to attract a great deal of this. Scotland has, by history and tradition, ties with many European countries which the closer bonds of the Community will encourage and revive. We know by experience that, important though regional policies and incentives are to Scotland and to other similar regions, a far more powerful influence on their prosperity is the prosperity of the country as a whole and of the world outside. When the economy is sick, as it is just now, it is Scotland's pulse that is the weakest.
And who can doubt that our future prosperity lies in casting in our lot with the Continent of Europe? Who can seriously believe that we can prosper alone, or in association on the one hand with the might of America, concerned with its own ends and problems, and on the other the Commonwealth, still a grouping of value in the world but with such a diversity of outlooks, both economic and political? Who can believe it who has travelled regularly on the Con
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tinent and seen with what single-mindedness and success they have rebuilt their countries after the ravages of war, and the community of purpose which they have already achieved?
My Lords, this is one of the greatest decisions this country has ever been called on to make—probably the greatest outside a declaration of war. Such decisions cannot await the hammering out of every detail in advance. If they did, those decisions would never be made, or we should all be in our graves first. Of course there will be disadvantages. Concessions must be given as well as advantages gained. In what bargain was that ever not the case? I have no patience, however, with those Weary Willies who say we should not go in because the price of butter would be too high; the Doubting Thomases who say that our economy is too weak to stand the shock, or those in industry, in the unions, in politics or anywhere else, who are opposing entry because they see their own little empires threatened. I say to them:"Have some faith. Think honestly. Where does the greatest benefit lie?—not just to our own pockets, but to the happiness and prosperity (as the noble Lord, Lord Gladwyn, pointed out) of our sons and daughters and their descendants in turn." Surely there can be only one answer. And it is not only for our own sakes and those of our descendants that we must give it.
Throughout history our greatest achievement has been our leadership to the world outside. The Elizabethans carried our influence across the seas; the North American settlers laid the foundations of a New World: the Empire took British progress and ideals to a great diversity of peoples; and the Industrial Revolution spread our products and techniques to what is now the civilised world. Here, my Lords, is our next great chance to influence the course of civilisation: to go into Europe, not in a carping or grudging way, but with enthusiasm and hope, ready to contribute our long experience and many skills and to give the leadership which we are uniquely qualified to do. That is surely something eminently worth while doing, and we in Scotland for our part will welcome the chance to contribute our share as we have so often in the past.
4.49 p.m.
LORD GEORGE-BROWN: My Lords, I am very glad to follow the noble Lord who has just sat down because, knowing the West and Central belt of Scotland as well as I do, and having been greatly involved with it for two hectic years in trying to help to restore and encourage there some industrial virility and development, I was glad to hear the ringing tones in which, on behalf of Scotland, he accepted that it was right that the whole community, the whole country, and the whole of our islands, should in fact join the European Economic Community. This House has many attractions over the other one. One of them is the frequency with which, just before one rises to one's feet, one receives a number of hastily written notes in even more hastily sealed envelopes, regretting deeply that the writers will not be able to stay to hear what one has to say. I now have a pocket full of those. May I say, I wish you all the best, wherever it is you are going. I trust you do not regret more than I do that you have got your priorities wrong.
My Lords, I feel I owe an apology to the House for intervening again in a debate on whether we should join the Common Market, whether we should help to form a wider and more integrated Europe. One seems to be doing it all the time and one has an awful feeling that maybe folk are getting a bit fed up with hearing the same old candidates for recognition every time. I do it again this time partly because of my personal sense of involvement, which is very great and very deep, and partly because other people do not seem able to expound their own views without dragging me into the subject. Last night, so the newspapers inform me, on television the Leader of the Opposition in another place declared that"he"(meaning me) was a dedicated European, willing to go in on almost any terms, whereas he (meaning himself) was in favour of joining only on the right terms. I should have said that that was a collection of the most emotive terms one could possibly use about the other party while, as always, giving himself the benefit of any doubts going. On the contrary, the other day in the other place he occupied columns of their Hansard with hitherto confidential quotes to show that I made the harsher, the tougher, noises on
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New Zealand. Somehow it does not seem to me that both those things tie up, and there are only a few days intervening between those two statements.
It is a bore to be continually putting the record straight on the events of 1967. It is a bore to the one who does it and, I suspect, a bore to those who hear it. I have recorded elsewhere my recollections of the attitude of the then Government's approach and my view of the comparison with the present terms presented to Parliament by this Government. This Government claims to have played the hand which we prepared for the negotiating table—and I like to remember that I was the Chairman of the Ministerial Committee responsible for so doing. We must have been fairly good at preparing, and they must have stuck very closely to our brief, because, my Lords, it has worked out pretty well exactly as we thought it would.
Before I come to my view of the present position, may I, with your permission and, optimistically, for the last time, attempt to dispel any confusion by setting out as clearly as I can the steps by which the Labour Government reached the conclusions that they did and prepared to negotiate—and I promise not to quote from any security document. The first step was when the then Prime Minister and I persuaded Ministers in the Cabinet of the need to accede to the Treaties if acceptable terms were negotiated. We did that. In some cases it was not easy. It is fair to say that some Ministers were not ever persuaded, but we did persuade the Cabinet, and we did it on both economic and political grounds. I think it is fair to say of the then Prime Minister that he was rather more persuaded by the economic considerations than I was, and I was rather more persuaded by the political considerations than he was.
In the course of this operation we set out to our colleagues the major areas that we could see of possible difficulty. I do not pretend to give them all but I think I can give the major group: the effect upon our balance of payments—and, as would befit my right honourable friend's past and experience, that weighed heavily with him; the effect of the Common Agricultural Policy—again in terms of our overseas expenditure as well as in terms of what it would cost

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people here at home; the movements of capital—of course boundless; the financial contribution we should have to make—the"key ", we called it, and so I see it is called in the present White Paper; our Commonwealth obligations, and our ability to apply regional policies because of our regional imbalance—the very thing that the noble Lord, Lord Polwarth, has been speaking about; the mobility of labour, and the transitional periods—and we emphasised"periods"and did not speak of just one; and our position as a nation in the discussions that would be going on in the Community meanwhile—in other words, before we got in. Whether that is a total list I do not know, but it is a fair list of the areas we identified for our colleagues before they made any decision at all. Having done all that at great length, the then Prime Minister and I obtained authority to talk to each member of the Six on these issues, and of course to talk concurrently with EFTA and with the Commonwealth. That was the first step.
The second step was the tour which he and I made from capital to capital in Europe. I did not quite like the description given last night on television of the"soft-shoe shuffle ". One of us was walking in hard shoes. As we went round the capitals we went over all this ground, speaking in every capital, as those in this House who were then with me in one capacity or another know, and speaking from identical briefs in every particular capital, because we knew that by the time we arrived at number two, or number three or number four, the record of what had been said in number one or number two would already have arrived. And of course we emphasised the serious problems for us and others. We did not do any minimising at that stage; we did not do any trimming at that stage. We were finding out whether people wanted to negotiate, and we took trouble to emphasise the difficulties rather than to do a"soft-shoe shuffle ". We were not negotiating there.
The third step was when we returned, at which stage we were both apparently convinced, (a) of the need to pursue this to a successful conclusion and to obtain membership; (b) of the apparent willingness on the part of the others to negotiate seriously—and while there were different
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degrees of enthusiasm apparent there was no evidence that anybody was going to put up a black ball at that stage; and (c)—this is very important—that the troublesome issues, the really difficult ones, were fewer than we had foreseen, and that on the really troublesome ones solutions which would be acceptable appeared to be available. This was a view we jointly formed.
And so we went to the fourth step, and we jointly put this to our colleagues, and after exhaustive—if I may say so, exhausting—discussions over many, many meetings and more than a few weeks, and with all our colleagues having before them the fullest records of our discussions and our conversations in every capital, we jointly recommended, and ultimately persuaded the Cabinet, by what is I think said to be a substantial majority, that we should be authorised to table an application to apply unconditionally for entry. Applying unconditionally, of course, did not mean entering unconditionally, but it did mean applying unconditionally. This we did at a Chequers meeting—I remember it so well—and we recorded our strong view that if Britain's entry were conceded a satisfactory solution for New Zealand would emerge.
So we got authority to recommend to Parliament that we should thus move, and seek negotiations to arrive at solutions acceptable to us on the main issues, leaving all other subjects for later decision after we had joined. This was then put to Parliament, was authorised by Parliament, in that enormous vote in the other place, and this was the course I then followed at The Hague, using a little sleight of hand in order to get it on the table at a meeting which was not properly constituted so to take it. Having done all that, we were then in business for negotiating, and. I repeat, jointly and collectively responsible.
We then took the next step, which was to prepare the negotiating briefs. These were prepared by joint committees of officials, presided over at the highest official level, responsible to the highest personage in the Government; and they were prepared under Ministerial guidance all the time. On each of the main issues briefs were established on the basis of which the negotiators were to operate, whether they were Ministers or whether

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they were officials, and within which they were to operate. This was done by the end of June in 1967, and I assert to this House that there can be no gainsaying of the joint and collective responsibility of the two Ministers then carrying major responsibility. There can be no gainsaying, either, whether it is convenient or inconvenient, that the issues covered in this White Paper are the ones we ourselves identified as being the main issues.
There can, in my view, be no gainsaying, either, that the terms negotiated and recommended in this White Paper are in line with the terms we were prepared for. There can be no gainsaying, either, that while the then Cabinet's final position was, clearly and obviously, reserved, as of course it had to be, till they saw the outcome, those of us responsible, in my view, would have been bound in honour and in every other way to recommend these terms, or as I have put it before, something not significantly different, unless we, or one of us, had never meant the exercise seriously in the first place.
I therefore take my stand with those who say these are not"any"terms, they are not"almost any"terms, these are the terms, or are very similar to the terms, that we thought would be right and acceptable. One always tries for more, but we were prepared for these. For myself, I can see, no reason why, if they were right then, they become wrong now. The economy is not weaker now; the balance of payments is not thinner now. There may be many things wrong with the economy, but it is not weaker than then. I cannot in all conscience and honesty and dignity find it possible to deny it.
What is the change? I am now on these Benches instead of those Benches in another place. There is the little matter of a very temporary, as I trust—and quite unnecessary, as I know—Conservative Government over there. But as I always say to my friends in the City and elsewhere: do not blame me, I voted Labour. Neither did I choose the point of the Election either; that is another story altogether. But I do not believe that vast issues like this can be decided, or should be decided, on a basis of, or by a reference to, which Party is temporarily in power at a given moment. This decision, however settled, will condition
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Britain, will condition the Continent to which we belong, will condition the world in which we live for more than decades, for more than generations. On the assumption that we are still going to keep our democratic system, I trust that there will be more than one change of Government in that period!
I think we must now decide some questions that have nothing to do with who is sitting on the Benches opposite. First, do we believe that a wider and a more integrated Europe is urgently necessary? Secondly, do we think Britain would benefit from that, if it were to come about? Thirdly, are these terms, and the price that they call for, acceptable for that purpose and for those compensatory benefits? For myself I think we must all stand up and be counted. My noble friend who opened talked so much about not being able to make up his mind and waiting for October, but I think we all have to stand up and be counted, and the sooner the better. For myself, I believe that the terms are acceptable. I believe that the purpose is right. I believe that the price is within our capacity. I believe that the compensatory benefits are well worth paying for. No speeches, no writings that I have heard or read have managed to shake me one bit. Indeed, I say this. The absurd exaggerations, the distortions, the prejudices and the sheer frightening xenophobia that so many of them reveal would, I think, have persuaded me to my present position if I were not already persuaded. For those who will read the White Paper's figures, whether on the balance of payments issue—the pluses and the minuses—whether on the cost of living consequences, or on the effects on our Commonwealth partners, or on our capability to operate regional policies, or on our status as a nation, as a country, as a Government or as trade unionists and industrialists in the various institutions of the Community, and on our ability therefrom to influence future decisions in a way which we cannot currently do, must, I submit, surely answer the exaggerated and shrill prognostications of doom and gloom!
The sovereignty argument never was a runner. Under this proposal we keep what matters of our own sovereignty and we gain, in addition, a vital and powerful share in the much wider sovereignty of

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the Continent of Europe as a whole. We gain, too, the opportunity to share in a much wider, prosperous and growing market. What, I ask myself, makes that such a fearful prospect to some trade union leaders? Is not that what we need? Is not that what will spur industrial investment and economic growth, and create the very job opportunities that we are so worried about? Or are some of them determined to prevent that happening, or afraid to face up to the industrial changes for which it calls?
But, above all, is not this move to join the absolute requisite for gaining a role for Britain? I have long smarted under Dean Acheson's remark, that we"lost an Empire and failed to find a role ". Is not this the absolute requisite for finding our role, for ensuring that we influence the political developments on the Continent of Europe? It is all very well exercising our minds and our thoughts and our fears about Germany, or about another Rapallo or about the danger of the Ost Politik. If we are there, cannot we influence; whereas to-day we cannot influence what is done and what goes on? Is it not a requisite for being able to prevent the emergence in Europe of undesirable blocs, undesirable attitudes, undesirable policies in our own Continent?
We are not joining Europe. We have never been in China or Asia. The issue is that we have always been involved, always too late and always with deep suffering. What we are discussing now is not joining. What we are discussing now is getting there while we can influence the policies, and, maybe, avoid the payments and the suffering. Is it not an essential requisite for being able to prevent the domination of the world by the super-Powers settling all over our heads, much of it against our interests? Is it not an absolute requisite for increasing the ability of this Continent really to assist the developing world with its urgent, tragic, frightening problems? I speak only for myself, but I believe that it is. I regard the purpose and the opportunities as justified and justifying. I am prepared to accept the price and the terms as being right and within our capacity. I do not believe there is any alternative available to match what this offers to Britain. And, as I am not a little Englander, I can only from these Benches
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commend this White Paper as I should have done from those opposite.
5.19 p.m.
LORD BOOTHBY: My Lords, the noble Lord who has just sat down has made a characteristic and most courageous speech, which I am sure has been listened to with fascinated interest by all of your Lordships. I think we must accept his account of what happened under the last Administration, just as we accept the fact that he has stood up to be counted here to-day as a full out-and-out supporter of joining a united Europe and the Common Market. Unequivocally he has declared where he stands, and I think the time is rapidly coming when we must all do that because there is too much shilly-shallying going on now, and the discussion has lasted for a very long time.
My Lords, at least I am on the record for the last 25 years. During the last two days I have been looking up my speeches, both here and in another place, on the subject of European union. I find that I have already said almost all that otherwise I might have said this afternoon, and I am not going to repeat myself. If any of your Lordships doubt my credentials, I would venture most humbly and respectfully to appeal to your Lordships to look up in Hansard the speech I made just over ten years ago, on June 30, 1960, to your Lordships' House. That shows where I stood then, and that is where I stand to-day.
In a debate of this magnitude one has, I think, as a mere Back Bencher, to be very selective. Past figures can be accepted because they are subject to proof. Future figures, with which we have recently been deluged both in the White Paper and elsewhere, can at this stage be only pure guesswork; and I do not think that too much importance or value should be attached to them. There is only one issue on which I have doubts and anxieties and which I am going to mention to your Lordships. Apart from that, like the noble Lord, Lord George-Brown, I wholeheartedly accept the terms that have been negotiated by the Chancellor of the Duchy of Lancaster. I believe that they are acceptable to this country; I think they can be borne by this country; and I think they are the best we could have expected. Indeed,

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in some ways they are better, and the Chancellor of the Duchy of Lancaster ought, in my view, to receive more congratulations, publicly and in both Houses of Parliament, than he has done for the magnificent work he has done and for the results he has achieved in Brussels and in Luxembourg.
Your Lordships are no doubt familiar with my anxiety, but I must mention it again, because somebody has to speak on behalf of the fishermen, and it is a matter of great importance and concern to many of us. Mr. Prior, the Minister of Agriculture, said in another place the other day, in their debate on this subject, that he hoped
" that fishermen will not allow themselves to be used by unscrupulous people who are jumping on to the fisheries bandwagon to grind other axes."—[OFFICIAL REPORT, Commons, 23/7/71, col. 1851.]
I really think that that was a little unfair. As one who has taken a leading part in the campaign on behalf of the fishermen, I can say that I have no axe to grind except the one I have been grinding for a quarter of a century, to bring about what Churchill once described as,"a kind of United States of Europe"in which we should ourselves play a full part.
The primary responsibility of the Minister of Agriculture and Fisheries, and indeed his duty, is surely to protect and foster our agriculture and our fisheries, and he should sympathise with their fears and anxieties at this moment. Because, my Lords, we have to face the fact that the E.E.C. fishery regulations were rushed through on the very day that we started negotiations to join the Common Market, and despite the fact that, if the Community was enlarged from the Six to Ten, the whole character of the fishing industry would be completely changed and the E.E.C. regulations could not possibly apply. In fact, we should be a net exporter rather than an importer of fish, as the Six are to-day. Under the E.E.C. regulations, all foreign trawlers, with their beam trawls and small meshes, would be allowed to fish right up to the beaches all round our coasts, and that would certainly lead to the total ruin of our inshore fishing industry. I say to your Lordships, if I may, that that would be too heavy a price to pay, even for entry into the Common Market.
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My Lords, we should stand, I suggest, and in my submission, on the Fisheries Convention of 1964, which, in the words of the Minister of Agriculture, is,
" the only internationally agreed régime for the waters with which we are concerned ",
and the basis on which a future agreement between the Six plus the Four should be reached. It took years, my Lords, to achieve this; and it has worked very well from all points of view, including that of the Continentals. I think Her Majesty's Government would have been well advised to say that we stand by the Fisheries Convention of 1964 as the basis of all negotiations—and the Minister himself came very near to saying that in another place last week. But now they appear to have given some ground. Let me spell out—and it will not take me more than two or three minutes—what I think are the minimum requirements. The limits as drawn from the base lines must ensure the complete protection of the prolific breeding grounds around the long coast of this country, and I mention specifically the Minches, the Clyde, the Moray Firth, the Solway Firth, Cardigan Bay, Morecambe Bay, Devon and Cornwall, the Wash and the Isle of Man. The fish breed all around those coasts, and we must ensure absolute protection of these breeding grounds. We must see that whatever limits are drawn beyond the base lines ensure that protection. There is a separate problem so far as the herring industry is concerned, which affects the Shetland Islands and the Yorkshire coast, because off those coasts most of the herring shoals usually swim within the area between 6 and 12 miles. They must also be protected by any arrangements that are made.
Finally, on this issue, I would suggest that there can be no temporary agreement covering a period of, say, five years, after which it will all have to be renegotiated, when we are a member of the Community and in a minority. Because I do not think that that will work: we must have some permanence. I very much hope that, before we are finally asked to take a decision in October, the Chancellor of the Duchy, of Lancaster and Her Majesty's Government will be able to come down to Parliament with a pretty firm agreement about fisheries covering an indefinite future. Because, my Lords, if adequate

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protection were not to be given to our inshore fishing industry, and if it were to be sacrificed altogether to the present E.E.C. fishery regulations, I should have no alternative but to vote, with a heavy heart, against our going into the Common Market. I have fought for a united Europe for a quarter of a century, but I have fought for our inshore fishing industry for half a century, and I am not now prepared to see one of them devoured by the other.
But I am not at all unhopeful. I think the Chancellor of the Duchy of Lancaster is well seized of the problem. I have been in continuous touch with him during recent weeks, and I do not think he will give way to the point at which our inshore fishing industry will be ruined; indeed, I have had letters of assurance to the contrary from him. Moreover, I suggest that there will be no need for him to give way, because if the European countries really want us in, as I believe they do, they will not insist on ruining our inshore fishing industry as the price we have to pay for entry. I do not believe they will do that, and therefore, as I say, I am not at all unhopeful. But I hope the Government will take a very firm stand upon this issue, because, although it affects a not very substantial proportion of our population, it affects the way of life in many parts of this country, and above all in my native country of Scotland.
That said, I should like to conclude by saying that in its present form the E.E.C. is a pretty shaky structure, mainly because it has as yet no political foundation. My experience of your Lordships' House over the last eleven or twelve years has been that the noble and gallant Viscount, Lord Montgomery of Alamein, is very often apt to get to the heart of the matter, and I am going to give two brief quotations from what he said and wrote quite a number of years ago which seem to me to get to the heart of the problem. He said:
" The task before the nations of the West is primarily political. Economic fusion and military strength will not be obtained until the political association between the group of nations concerned has first been defined."
The second quotation—and it is even more relevant today—is this:
" Europe must render to the United States the help she is entitled to expect as leader
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of the Western Alliance by standing together as one united whole."
We cannot in fact give to the United States the defence assistance which she is entitled to demand unless we are united, and that is one of the most formidable arguments in favour of unification.
If I may suggest it, we really have got to get back to the ideas and ideals of Strasbourg and the Council of Europe in the 1950s; because they were right. They have been proved to be right. Full economic and monetary union on a constructive and expansionist basis, and effective co-operation in the fields of foreign policy and defence, cannot be achieved without a political foundation. A European political authority with limited functions but real powers was approved unanimously, with Churchill's approval, by the Council of Europe in 1949; and we are still waiting for it. I suggest to your Lordships that new forms of organic political union, which are not a surrender but a joint exercise by consent of certain defined sovereign Powers, must be devised. If this E.E.C. conception—and I prefer to call it the"United States of Western Europe "—is ever to achieve a real, lasting success there must be a political basis to the whole thing. It is our mission and our task, as I see it, with our vast political experience, to bring what we can to the councils of Europe in order to assist in this development and ultimate achievement.
My Lords, in the 1950s there could have been a marriage between this country and the Continental countries of Western Europe based on affection and gratitude. The Continental countries, without exception, in the 1950s begged us to take the lead; to give them the necessary leadership and to form this"United States ". We turned it down absolutely ruthlessly. In the 1960s there could have been a marriage of convenience; but again we turned it down. We did not even send a delegate to the Messina and Brussels Conferences which resulted in the Treaty of Rome. Now we find ourselves in 1971 confronted with a marriage of necessity. I see no alternative. But marriages of necessity do not always fail. Sometimes they can turn out to be a great success, and ultimately end up as marriages of affection and gratitude. That is what I should like to see.

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I have nothing but admiration for the steely determination of the Prime Minister. I only wish that his predecessors during the last 20 years had shown the same steely determination in pursuit of this great and fundamental objective, which is certainly the greatest issue of our time. But I would say this in conclusion. I hope that he will realise that this issue really does transcend Party politics—as I think the speech of the noble Lord, Lord George-Brown, proved conclusively this afternoon. When the decisive moment comes next October, I should very much like to see a free vote in both Houses of Parliament—both on the Tory side and on the Labour side. I have little doubt of what the result of that vote would be. We cannot have a referendum. I do not like referenda; and, anyway, they are not in the tradition of this country. A free vote of Parliament on an issue of this magnitude seems to me to be immensely desirable; rather than to turn it, as some people are now trying to turn it, into a Party issue. It is not a Party issue; it is far bigger. I would make an urgent appeal both to the Leader of the Opposition and to the Prime Minister to consider giving a free vote to both Houses of Parliament—in which case, as I have said, I have little doubt what the result would be, if that result does come this autumn, then I shall feel that all the years of misery and frustration, from 1949 to 1957, that I spent at Strasbourg as a delegate to the Council of Europe were not, in the long run, in vain.
5.35 p.m.
LORD McFADZEAN: My Lords, the two noble Lords who opened this debate referred to the trepidation with which they spoke. Believe me, the word is wholly inadequate in my case; for this is my first verbal contribution to your Lordships' debates and I therefore crave your indulgence. To follow the oratory of this afternoon is not easy for a newcomer and I feel that all that I can do is to bring out the industrial aspects of this great problem as I see it. I think we have to satisfy ourselves in industry and in the country over the answers to these questions. Have we examined all the courses open to us? Is the decision we are going to take right?
Emotionally, one turns to the possible creation of the Commonwealth into a
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viable economic unit. But, sad as I am to say it, it is not a practical proposition. As only one example, I would suggest that we glance at the position of three of the oldest members of the Commonwealth. In spite of differences of opinion from time to time between Canada and the U.S.A. there is an established and growing affinity, culturally, economically and in many other ways, between them, through sheer proximity and mutual interests. As regards Australia and New Zealand one has just to study the fantastic increase in trade and growing inter-dependence over recent years between them, Japan and South-East Asia generally, to realise that there is economically a natural regional grouping developing there. By all means let us do everything possible to increase cultural and trade relations between Britain and the Commonwealth; but to create this as a viable economic unit is a pipe-dream in the world of to-day. The clear message which conies to so many of us in the Commonwealth is one of increasing understanding of our position and an acceptance that one of the greatest present contributions that Britain could make to the strength of the Commonwealth is to become economically strong herself and thus be able to play her rightful part in world and Commonwealth affairs. A strong and competitive Britain, and only a strong and competitive Britain, will recapture her rightful share of Commonwealth trade.
My Lords, I turn briefly to the North Atlantic Free Trade Area or to some special relationship with, say, the U.S.A. and Canada. Again, emotionally, this must appeal to us with so many of our kith and kin in these countries and with almost a common language between us. But this, too, is not at present realistic. Certainly, from my frequent visits there I cannot find any real desire for such a relationship existing politically or economically. It could only lead gradually to domination, to our being the 51st State. I am all for partnership; but I am fundamentally against domination.
So I come to the third possibility, that we"soldier on"ourselves as we have done successfully in the past. But the past is not the present, and even less the future. If industry decides to carry on we must pursue that course with a full appreciation of the facts; because.

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apart from our native skills, we have few of the essential natural resources to fight successfully for world markets against other countries who are richly endowed. We should also be fighting from an increasingly restricted base, for the trend in the world to-day is certainly towards regional grouping of increased economic and technological strengths. The effects of this, to some degree, have already been experienced in the 1960s and I am sure will be increasingly felt in the 1970s. Here I would suggest that we must recognise that Britain could not overnight, or indeed in any practical time, adjust her economy to become a highly specialised one like that of Sweden or Switzerland. We are equipped to be a major world Power and, certainly, an exporter and we must have the environment to oporate as such to win our vital proportion of world trade, to attract investment and not to repel it as would a restricted economy and a curtailed scope of operation.
So, my Lords, we come to the last of the courses open to us; that is for Britain to join the European Economic Community. I suggest that before any final decision is taken we must ask ourselves some searching questions. The first is, has the E.E.C. economically been a success? Surely there can be no doubt about the answer—Yes. Discount, if you like, that some factors, such as the growth which has been taking place in world trade, have helped, but one cannot dispute that between 1958 and 1968 the E.E.C.'s internal trade increased fourfold, its world trade grew twice as fast as ours and is to-day almost twice that of the United States of America and accounts for nearly one-fifth of all world trade. Look also at the vast capital investment that has taken place and the increasing power of the Community in world economic affairs.
Secondly. I ask myself, by comparison how has Britain fared? Of course there are always some extenuating circumstances, but Britain's performance, to put it at its mildest, has been extremely disappointing. We have had a much smaller growth than any other major country has had; a fall away in some of our industries; a serious decrease in vital new investment and a loss in our share of world trade in manufactured goods from
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16 per cent. in 1958 to 11 per cent. in 1968; and our standard of living which, measured in terms of gross national product per head, exceeded in 1958 every country in the Community except Luxembourg, is to-day lower than any except Italy.
The third question one asks oneself is, what are the reasons for this deterioration in our position? My Lords, there is a whole host of them, but to me the major one is the erosion in our competitive position. To remedy this I believe two things are essential. The first is that in this world of to-day, and even more so to-morrow, we must have a larger home market and be able to attract essential new capital if industry is to exploit to the full the latest technology, production and commercial techniques and recapture her appropriate share of world markets. The second requirement is that we must work more effectively. I yield to no one in my admiration for the great majority of British management and people—and I have said so throughout the world—but let us be brutally realistic with ourselves. There has been a loss of sense of purpose and direction by far too many people in this country, an over-readiness to take and a reluctance to give.
So, fourthly, I ask myself what should the course be, and I feel that it must be to join the E.E.C. Of course it will increase competition, but that is no bad thing and something we shall experience whichever course we take. Of course it has its disadvantages, but in any worthwhile partnership there must be give and take. But how overwhelming are the potential advantages—having a home market five times greater than at present, the basis on which to regain our position as a major industrial country, to improve our standard of living, to restore the objective and effort of our people through giving them a new horizon and to retain our vital voice in world affairs in this new era of super-Powers and large regional groupings when economic strength will certainly determine how much our voice is listened to.
On terms, admittedly an accurate financial assessment of some of the items cannot be made, but on any reasonable overall assessment I believe the terms are equitable and I am confident that they compare favourably with any realistic

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assessment of not going in. Has any momentous step ever been taken in history, or indeed in business or private affairs, that has not demanded a blending of economics and hunch, a belief that the contemplated step is right? There are, of course, other aspects to this great question, such as the political one that I must leave other speakers to deal with, but, taking all such factors into account to the best of my ability, I believe there is no practical alternative to our joining the Common Market and that it will also prove to be to our advantage to do so.
My Lords, I first came into national life at the time of Messina and I witnessed then the tragedy of Britain not participating in the talks that led up to the Treaty of Rome. I subsequently watched at close quarters the inception and development of the Common Market. Of course it has had, and will continue to have, its problems, but it is an inspiring conception and has achieved much not only economically but in so many other ways, as, for example, the dedication of its people. How many European industrialists and other people we all know were frightened to death when their country joined it but who today thank God they did? It will in time fulfil, I am confident, all its high objectives. Do not let us lose, certainly for some time ahead, another opportunity of joining. Let us also bear fully in mind what a contribution Britain could make to an even greater Community and what a contribution Britain could in turn receive.
My Lords, I thank you for your patient hearing. I"take note"of the Government's proposals regarding Britain and the European Community, deeply conscious of the great challenge they present but convinced of the infinitely greater potentialities they give and which we must grasp.
5.47 p.m.
LORD SOPER: My Lords, I am happy to congratulate the noble Lord, Lord McFadzean, who has just resumed his seat, on his maiden speech. We were seized with the deep sincerity with which he spoke, the care with which he had prepared his speech and the urgency which characterised his utterance. We shall hope to hear from time to time more from the noble Lord who has
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already put us under a sense of obligation to him.
My Lords, I have the onerous responsibility, as it now appears, of being the first in this mammoth debate to take an entirely opposite view from those which have hitherto been expressed in your Lordships' House and to disturb the somewhat placid pool of controversy which has hitherto characterised the opening speeches of this debate. Perhaps that calls for one or two preliminary observations. I hope to behave myself in the same spirit of irenical and persuasive argument of which you have received ample evidence in the speeches preceding mine. I hope that there will be no suggestion in what I say of a parochial or Little England attitude although, rather unlike the noble Lord who opened the debate and who in excessive modesty felt that he would not be likely to influence anyone who listened to him, I hope that I may be able to influence some of you. Although the trumpet may be of a very indifferent character, I hope that it will go forth in no"uncertain sound ".
My Lords, this particular debate on a White Paper can conveniently, and I do not think arbitrarily, be divided into two parts. The White Paper itself makes a clear distinction between the economic reasons for which it is desirable in the, view of the White Paper that we should enter the Common Market and political reasons why we should do so. I should like first to refer to the economic reasons and preface what I have to say by a condition of mind in which I find myself, which I dare say is not peculiar. I read the arguments of those who are convinced that it would be to our advantage to join the Common Market and the furrows in my brow clear and my mind is set at rest. I feel that the last word has been spoken. Then, unfortunately, I read an article by someone taking the entirely opposite view and deploying with equal certitude a number of economic propositions which seem to be equally coercive, and I rather feel that that from which I suffer as a layman in these economic minefields may well be something which is characteristic of a great number of people. Therefore I have looked rather more carefully at the actual substance of the economic argument, and I find certain indisputable flaws in it which I would dare to relate to your Lordships.

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There is a great deal more eschatology than economics in the proposition that we are going to see certain things inevitably flowing from the decision to enter the Common Market. I do not know, and I do not think anybody else does. I think there is nothing more dangerous than to be prophetic on a very few hard facts. The more I read of the economic position, the more does it seem to me, in any case, a thoroughly inadequate reason, if it were the first reason, for deploying our resources in this new and revolutionary field; and it encourages me to look even more deeply, if I may say so, and to question the economic debate at its source.
It would be obscene to pretend that an increase of productivity and wealth would not be a blessing to those who are underprivileged, those who are hungry and those who are illiterate. But I wonder whether it has struck your Lordships that there may be an optimum to the kind of affluence which can go hand in hand with the true dignity and amenity of a civilised life. We have already been warned of the characteristics of pollution. Many of us have read Galbraith and the Consumptionist Society, and the warnings that go with it. Not too professionally, I am inclined to say this: that there is, I believe, a grave danger in assuming that there is an arithmetical or a geometric progression which accompanies an increase in the means of life: rather the quality of life may suffer. It does not seem to me that this country would necessarily be better off if we were immeasurably or considerably more wealthy.
It may well be that the future, such as it now invites us on this planet, may be a future in which we deliberately are prepared to discipline our accretive, predatory and certainly our acquisitive natures, for the very reason that otherwise we shall be imposing upon the very world in which we live insufferable and intolerable pressures. It is for that reason that I am sceptical of the precedence of the argument that we should go into the Common Market because we shall be better off. And if indeed it be argued that we are not well off now, I, as a Socialist, would claim that a proper redistribution of the available wealth might fill all those gaps which now we deplore, and there would still be more than enough
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to go round; in which a community might live in amenity, comfort and dignity, and might pursue, I think, those higher virtues, which are not necessarily the same thing as the acquisition of a considerable number of propensities to enjoy oneself, or commodity and other amenities.
It is, however, on the political issue that I would dare to delay your Lordships, because here I am irrevocably opposed to our entry into the Common Market. I am irrevocably opposed to it whatever the particular conditions, because I see in it a menace to those things which are nearest and dearest, I am sure, to the hearts and minds of all your Lordships, as they are to me. This has nothing to do with the religious argument which I see has appeared occasionally in the Press: and I noticed in The Times the other day a number of letters deploring the possibility of our entering the Common Market because we shall be under the heel of Rome. This prospect of ecclesiastical ultramontanism is, I think, a waste of time. If we were not capable of dealing with it at the time of the Reformation, your Lordships might like to know that the Methodists have since been added to the forces of freedom, and therefore there is less chance of such subjection now than ever there was before. This is a ridiculous argument, and I treat it with amiable contempt.
But the argument that I would seek to put before your Lordships belongs to another field altogether. I am sick to death of the nation State. It is the most predatory violent institutiton that man has ever contrived. It is, I suppose, part of the deposit of the Reformation in the West. The prospect of seeing a number of super nation-States, to which already has been added those of Japan, in the near future will be added China, and now perhaps an increased E.E.C., is, to me, a deplorable one. I do not take any comfort from the assurance that we shall then have a balance of power. Being trained at the better of the two great universities, I read my Cambridge modern history, and I know full well that the balance of power is the promise of wars every 25 years. We may have avoided that for the time being, but I have no comfort whatsoever from the assumption that the proliferation of the super-States will in itself be a guarantee, or even an

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augury, of peace: I think the very opposite is likely to happen.
Secondly, my Lords, I am a Socialist, and you will not expect me to deplore that fact or to apologise for it, any more than noble Lords on the other side would want to apologise if I were to ask them whether they are Conservatives, or whether others are Liberals. I am proud of being a Socialist, and it is because I want to see Socialism in Europe that I am extremely dubious whether the entry at the moment, or in the foreseeable future, of this country would not be a marriage of convenience for capitalists, rather than the inception of a truly Socialist community throughout Europe. I take the view that we shall support the capitalist case; and the very fact that, with such tremendous enthusiasm, the capitalist Powers, both in this country and elsewhere, are already heralding the prospect, seems to me a grave reason for having the most profound suspicions about it. The best way in which we can serve Socialism, if we believe in it, is to turn this country into a Socialist community, first of all, and then we can begin to exercise a proper influence on other people. If we go in now, I very much doubt whether the forces of Socialism will be increased: in fact, I think they will be diminished. And it is for that reason, again, that I am extremely hopeless when I think of the prospects of our entry into the Common Market.
I am not particularly impressed, my Lords, by the arguments about sovereignty, because sovereignty, if it is unharnessed power, does not exist anywhere except in the supernatural field; and in any case, we have already had our sovereignty eroded in many ways, and it will be eroded again. If we are to surrender our sovereignty, I want to see that sovereignty surrendered in the interests of something that by-passes the nation State and the super-nation State.
In conclusion, I would invite your Lordships to consider what to me is a prime matter of supreme importance. I do not believe that the normal process, or the peaceful process, is from the State to the super-State, in the hope that, through the super-State, we shall arrive at a time when we shall emerge into the area of world government. I think the super-State is a retrograde State, and
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for me the imperative need in the world to-day is that we shall move out of the super-State, or out of the super-nation State, into a concept of world government. We have talked about world government; we have doffed our hats to world government; we have sent our representatives here and there; and we have the instruments of world government in the United Nations. I should have thought that now is the time for us in this country to make this tremendous effort, which I believe we are particularly and peculiarly able to make, of by-passing this iniquitous business of the nation State, and beginning to cast our sovereignty, if we are going to make it a gift, to the interests of world government.
I prophesy—and I bet my cassock I am right—that if we go into the Common Market, it will not be long before this new super-State will want an independent nuclear threat weapon. If that happens, we shall be in a mess; we shall be in an even worse mess than we are now. Therefore I hope that, whatever else is done, we shall avoid considering only those matters which lie behind the personal desire for better conditions—the very proper desire for a wealthier and happier community here. This is not the way. It is not the way because it bypasses, or in fact circumvents, those particular avenues of approach to a better life, a happier world, and particularly a happier Britain. I am quite sure that what has happened in this debate already, and what will happen, is that we shall proceed with the fellowship of controversy. In that fellowship, I at least believe that first principles must take a primary place: and those first principles, for me, are world government within a Socialist community; and neither of these objects are served by the present attempt to get into the Common Market. For those reasons, I am hostile. I hope that sooner or later we shall repudiate the idea, and we shall then be free to move into a better and more peaceful world.
6.0 p.m.
LORD BURGH: My Lords, in rising to ask the indulgence of your Lordships' House, I should first like to thank my fellow"maiden ", the noble Lord opposite, for such a fine example in how to overcome trepidation, trepidation which

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I think is very natural in view of all the expert knowledge and political experience which is massed to-day and on the two days following for this debate. This is expert experience which I cannot hope to match. However, there are some rather general considerations which I feel are relevant and, indeed, important. I was encouraged by some of the things which the noble Lord, Lord Shepherd, said to think that perhaps these may be very important.
First of all, I think one has to recognise that European people from the Continent of Europe do not generally look on the United Kingdom as being really a part of Europe. I suppose that is because of our island position. Certainly, it is true that some nations or groups in Europe may feel more friendly towards us than towards other continental European groups or nations, and they may want to trade with us; but these friendly feelings are not quite the same as belonging to a group. To take an example, in Belgium there is friction between the Flemish and the Walloon communities; so much friction that there may well be many Flemish people who feel more friendly towards the English than towards the Walloons. However, when it comes to a question of who belongs to the family of Europeans, I think the Flemish would recognise the Walloon as perhaps a detested relative, whereas the English as pleasant outsiders. I think one finds that with all of the groups; whenever there is a group there is a counter-group which is excluded.
That is not to say that one cannot join a group. Of course that is possible, and one can become fully accepted, but that takes time. For a really united Europe, economic and political arrangements are not the whole story. Each nation in the group must have this feeling of belonging vis-à-vis each other. It is a question of people's attitudes. It is the attitudes, not analysed, which are formed over a long period of time and which begin to be instilled in childhood. These attitudes do not change overnight. At the same time, this feeling in Europe that we are really outsiders could carry with it an advantage, and I hope that it may turn out to be a very great advantage.
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When an outsider is absorbed into a group, at the beginning he is generally allowed to have certain idiosyncrasies. When he first enters the group, these idiosyncrasies are tolerated for the time being. As he becomes fully absorbed, the group may recognise his idiosyncrasies as being useful and valuable to the group as a whole, so he is allowed to keep them and is even encouraged to develop them. Our idiosyncrasies on entering the European family is that we are involved in a very extensive network of cousins; if we enter Europe, we enter without severing our ties with the Commonwealth. I feel that that could be a vital contribution to international relationships, not just within the European Communities but on a world scale.
I am not looking at this in any way as the first step towards a World Government or anything like that. Centralisation on that scale in my view would be a terrifying idea. But it is coming to the point, I believe, where the survival of the world as we know it—the survival of the civilised world—may depend on finding a satisfactory way of integrating human activities, not just within one continent, but on a world-wide basis. In this case, I do not think that integration means universal homogeneous government; I think that is something that can be carried on between groups which are self-governing. That would include both developed and developing nations. I do not think I am being Utopian in feeling that in this combination of Europe and the Commonwealth we have at least the germ of a real world network of communication and co-ordination. Here I think communication is the key. It is hard to communicate with someone one looks upon as alien. If he is completely alien, communication is impossible. There must be a common ground, common assumptions, common aims and common attitudes. Here we come back to these attitudes of feelings which are not analysed, that an outsider is an outsider.
During the debates on the Industrial Relations Bill we heard of the problems which were caused by a lack of real communication. I think it was the noble Lord, Lord Brown, who spoke with great authority when he made the point that the most effective communication networks are precisely the informal ones;

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that is, communication between one individual and another individual who know each other rather than between points in the hierarchy or in the organisation. This is a matter of by-passing official channels and having a word with an old friend who works in a different part of the organisation, and it is often the best way to get things done. If we enter Europe, there is the opportunity to combine existing, informal communications within the Commonwealth with the communications that are arising within Europe and will arise between Europe and the United Kingdom. This is not something that would come immediately upon our entry into Europe. These informal relationships cannot be imposed by decree. They have to grow by themselves, but one can at least be aware of their value; one can nurture and encourage them.
If this informal network covering Europe and the Commonwealth comes into being, then it will be something entirely new, and new developments of this sort are usually traceable not to one single cause but rather to a certain climate of thought, to the appearance of different contributory factors in different areas. Perhaps one may take the analogy of scientific discovery. It often happens that the same discovery has been made quite independently by different people at almost the same time. The reason for that, presumably, is that a particular discipline involved has reached a certain stage where all the necessary ingredients for the new step were available and all that the discoverer has to do is to make a new combination of already existing elements.
In the case of the co-ordination of Europe and the Commonwealth, the essential ingredients seem to be ready. First, there is the growing political and economic integration of Europe. Secondly, there are existing Commonwealth ties, and I think the great virtue of those is that so many of them are informal ties; people have relations in different parts of the Commonwealth, they spend their time there, they have worked there and there is great freedom of movement between the different areas. The third ingredient is that there are individuals who will be suited to forming an informal network such as I have described. This network will have to cut
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across existing national and political boundaries.
The people I am speaking of are chiefly those—I think they are an increasing number—who are often described as"rootless ". This word is generally used in a derogatory way, but I feel it may become a praiseworthy characteristic. These are people who feel no permanent and exclusive attachment to a particular locality or area, even perhaps to a particular country. They do not feel bound by any particular ideology or social class. Their attachments and relationships which they regard as important are more between one individual and another, and their basis is probably rather diffuse. They get on together, they share common interests: they would not want to analyse it more deeply than that. This comes about perhaps because of the increased possibility of travel, the growing number of people moving around to find new jobs and settle in new places, and also the increasing similarity of cultural patterns in different countries.
In many ways this may not be a good thing—something may be lost—but at the same time I think it is bound to happen and it needs to happen in order that the networks may grow. Perhaps it is also a response to the accelerated rate of change in technology and life in general. For instance, in a river, if it is flowing slowly, plants which grow there can put their roots into the bottom and stay in one place, but if the river is flowing fast and the direction is changing, plants that move with the flow and take their nourishment directly from the water can survive more easily and certainly with more elegance. For the rootless—let us call them that—the present divisive group demarcation lines are weaker, and it may be that this puts them in a more favourable position to develop global networks of familiarity. This is really something that is the opposite of a militant nationalism.
My Lords, I admit that this is all rather speculative. If it comes about, it is not a process which can be directed with conscious purpose any more than a gardener can make a plant grow; but the gardener can allow the plant to grew or of course he can prevent it growing. I suggest, therefore, that if we decide to enter Europe—and I hope we shall—we should bear in mind the possibility

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of this developement and do what we can to provide favourable conditions for its growth.
6.14 p.m.
LORD THORNEYCROFT: My Lords, the debate has been graced by two distinguished maiden speeches, one by my noble friend Lord McFadzean and the other by the noble Lord, Lord Burgh, who has just resumed his seat. Both were in favour, broadly speaking, of a European adventure, but they approached it from very different angles. My noble friend Lord McFadzean, on the industrial side, referred to things which I propose to speak about a little myself, and the noble Lord, Lord Burgh, spoke from the point of view of human relations between growing world communities. May I say that we listened to his speech with interest and admiration. I think all of us in your Lordships' House hope that we shall hear him in the same vein on other occasions in other debates in our assembly. I rather wish that Lord Soper had stayed, instead of shooting his broadsides and then leaving the Chamber, because it seems to me that Lord Burgh might have told the noble Lord, Lord Soper, a few things about the nation-state which would have been very good for Lord Soper to have heard.
I should, however, like to make just a short reference to the speech of the noble Lord, Lord Soper, since it was the only one that has been delivered so far against the Common Market. I see that Lord Shinwell has occupied the place so recently vacated by the noble Lord, Lord Soper, and it is possible that we may be having another speech later on in the same vein. Lord Soper told us that joy and the quality of life and human happiness cannot be bought and sold in the marketplace, and I think we all go along with that. But to go on from that argument and to urge that we should not take such reasonable and honourable steps as we can to increase the prosperity of this nation seems to me a very odd deduction to draw.
The noble Lord, Lord Soper, talked about economics, and I suppose that a humble man like myself is therefore entitled to say a word or two about
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theology; but I am bound to say that a more Christian approach for any man who has seen, as most of us have in our lives, something of the suffering caused by human poverty or even by unemployment would he to urge that it was the bounden duty of men in public life to seek by all means within their power—by all honourable and sensible means—to enlarge our possibilities and increase our national prosperity. The noble Lord then went on to say that what we wanted was a World Government. I dare say we might want that, but to argue that we should not take some sensible precautions to have a few regional arrangements meanwhile is, I think, the epitome of making the best the enemy of the good.
That was the best speech, and indeed the only speech, that we have had against the Common Market so far. This has made the debate rather an awkward one in which to speak. Like some others in this House, I am accustomed to a more controversial atmosphere, but I will do my best. I think the main thing to try for in a debate such as this is brevity, and I will only say, as others have said, a little of what I know from my own experience. In the 1950s I was writing papers from the Board of Trade in favour of the European adventure, ably assisted by one of the greatest public servants we have ever had, Sir Frank Lee, whose recent death as Master of Corpus Christi we all deeply regret.
LORD BOOTHBY: My Lords, I hope the noble Lord will forgive my interrupting him. I wonder if he would say whether the Foreign Office were at the same time writing the same kind of papers?
LORD THORNEYCROFT: My Lords, I was coming to that. I do not want to be rushed in any way because I wish to make very careful observations about this matter. As I say, at that time I was writing papers in favour of the Common Market and I played such part as I could during the years in advocating those causes. As I think the noble Lord, Lord Boothby, knows, I have been a consistent supporter of them. To-day I am an industrialist, working within the orbit of two great European companies—the Pirelli/Dunlop group on the one hand

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and the great Philips organisation on the other; that great electronic giant from Holland, and I think the largest electronic company in Europe. Therefore I have some experience of these matters from various directions. After twenty years' experience of that kind I would say this—and here I go a little towards Lord Shepherd—I do not believe you can prove this by figures. It is too complicated and the variants are too great. At the end of the day you have, with all the experience you have gained, to take a deep breath and make a judgment. It is a matter of faith rather than of figures, and because it is a matter of faith it is a matter upon which honourable men can hold different opinions. That I would frankly admit. When we debate to-night, we debate the future and not the past. I really am not particularly interested in what Mr. Wilson did or did not say. Everybody has said things a bit differently at one time from what he has said another time. I do not think it is very important.
If I did look to the past, I would look beyond Mr. Wilson; I would look to the time when Winston Churchill was the leader of this country, when we had just finished a great war, when a marriage of affection—as Lord Boothby put it—could have taken effect. I think the historians, when they write, will not ask what Mr. Wilson said; they will ask how it came that Winston Churchill, with all those powers, with all that position, with all the reputation that Britain had, did not do this. There I must confess the Foreign Office had something to do with it—I would agree with that. At the end of that period, after a great war, Winston was tired, unable to fight the opposition which was against him. I remember David Lloyd George once saying to me,"You can pity any man who is a Prime Minister in peace time after winning a great war. His whole strength has been drained from him in this one great effort." There is no doubt that at that time the Foreign Office were opposed. The noble Lord, Lord Sherfield, said that for some period of his life he was on the fence. He had done extremely well to get as far as the fence. Most of his friends were on the barricades during the greater part of the time that I played any part in this matter. I hope I have answered the noble Lord, Lord Boothby.
LORD BOOTHBY: Yes, you have. Thank you.
LORD GORE-BOOTH: May I ask the noble Lord one question on behalf of the much beleagured Foreign Office? Would he not agree that all in the latter part of the 'fifties Departments were, in fact, bound by the policy of the then Government to attempt a European free trade area? I want to get that period straight.
LORD THORNEYCROFT: I do not think that has anything to do with it at all. The period I am talking on is over twenty years, and I am bound to say that I was there. I am not writing any memoirs, but I think that I am entitled to say occasionally what I know to be a fact. I was there during that period. I know where everybody stood. I can see quite a few people in this House. I am not going to go through their names, but I know exactly where everybody stood during those days. There is no doubt about it. When the history comes to be written, it will be seen that the Foreign Office, originally under Anthony Eden, were opposed to the European Market. They stuck to that view for a long time.
LORD BOOTHBY: Under the leadership of the Secretary of State for Foreign Affairs. Sir Anthony Eden was passionately opposed to anything beyond a vague association with Europe, and repeatedly said so.
LORD THORNEYCROFT: This debate is about the future, not about the past, and I should like to get on with that.
To-day we are at last discussing the question of principle, and, thanks to Geoffrey Rippon, the Chancellor of the Duchy, we have got it out of the aura of butter and fish—although I must say that I enjoy Lord Boothby's speeches. He brought back nostalgic memories. He speaks so well on Europe. There is only one subject on which he speaks better, and that is white fish. To have an issue where he can bring those two themes together is a joy for all of us to listen to. But we have got the issue out of the atmosphere of butter and fish. I would also say this to noble Lords opposite. I do not want to increase their embarrassment in any way, but it is difficult to go on arguing about the terms when

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Minister after Minister, not only in this Government but also in previous Governments, are all saying that these are the right terms; these are terms, which they would have recommended.
There is another habit we might get out of. Do not let us keep on saying that we cannot enter because we do not like this Government. Anybody is entitled not to like a Government, but I can say one thing without fear of contradition: during the years we are in the Common Market we are going to have much worst Governments than this. We have to live with it. We have to take the rough with the smooth. The most astonishing men in the history of the years to come will, from time to time, be governing England. If we think we can be in the Common Market only with a superb Government, with something tremendous, with a unique leadership at the top of it, we are in error. We shall have to get on with it with much rougher conditions than that. If we think otherwise, we had perhaps better not go into the Common Market. But, in point of fact, we cannot make an excuse either of the Government or its leaders, or of the economic situation. We shall be in much worse economic circumstances than these. One noble Lord has already said that from the point of view of economic circumstances this is rather a good period in which to enter.
What do we want? Do we want to get in or do we want to stay out? I remember the noble Lord, Lord Caccia, who will speak in a moment, saying that there was a lot of room between Sydney and the Bush. Well, the distance between Sydney and the Bush is narrowing at the moment. We are going to have to make a decision one way or the other, whether we are for it or against it. I personally am for it. In the process it is important only that we should not tear ourselves to pieces too much in going in. This is, and must be, a national decision. The worst thing we could achieve in a way is for this decision to be made to look like a Party decision. We shall need all the men of talent in this country, on all sides, to make the best of our position in the Common Market. Many of those who oppose it to-day, whether it is Mr. Callaghan, Mr. Wilson or Mr. Enoch
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Powell, in the years to come will probably have to make a very big contribution to our affairs and to the ability of this country to conduct itself in a satisfactory and worthy way.
So let the debate take place, but do not let us create divisions among ourselves which are too lasting or too deep. If I may say so, I think it would he a pity if the Labour Party pulled itself to pieces on this subject. It is not for me to advise the Labour Party, but it would be a great loss to this country if the Labour Party suffered serious damage. In this House we are entitled to look at the matter in a certain perspective. To me it does not seem necessary for the Labour Party to have to say,"We are for it"or"against it ". They are perfectly entitled to say that they would have done better, or that their terms would have been better, or the economy stronger, or that they would have conducted themselves with more skill. Everybody knows that they have very able men on both sides in that Party, and I see absolutely no reason why those men should not express their own views or vote in their own way without its in any way being held against them or the Labour Party in the process. Whatever can be done should be done. I do not know about the Whipping. The public do not understand Whipping anyway. They do not know what it is all about. In fact, the Tory Party when in Opposition Whipped Conservatives in favour of the Labour Party when they wanted to open these discussions. They were entitled to take a firm line here. But any steps which can be taken to make this a national decision, to minimise the Party differences and to make it easy even for those men who oppose it at the present time to play their full part in this great affair when we go in, should be taken if at all possible.
Just a few words now on the industrial side, which will really conclude what I want to say. Only on the industrial side am I now qualified to speak. This is a mixture of pluses and minuses. Only those intimately concerned with a particular business could say, even today, whether they were likely to do well or ill. It is a matter of a very fine and difficult judgment. Here I would agree with Lord Shepherd. The figures do not really matter. It is a matter of faith, whether you think you can make the most of the

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opportunities which are presented to you. I think it is true that in this new world which will be presented to us both the prizes and the penalties will be greater. If we are really good, if we really seize our opportunities, we shall do very well indeed. But if our management is weak, or bad, we shall pay a much higher price for our failures. That is a risk that we take, but it is also an opportunity which is offered to us. The fact is that industry today wants to go into the Common Market; having made all their judgments and weighed all the risks, they want to go in. The onus is heavily upon those who urge that in the face of those wishes they ought to be kept out. I can conceive that some argument can be made for that, some overwhelming case for some particular point, but it has not been made in this House, nor, so far as I can judge, in any other respect of the negotiations outside this House.
If I may summarise the advantages as I see them, the first is that we have free access to large and growing markets. This is a great prize for big firms. But as the noble Lord, Lord Sherfield said, it is also a big prize for small firms. If you look at what has happened inside the Common Market, on the evidence not of theory but what has actually happened, the small firms have had as big as, or greater an opportunity and benefit than, even the larger ones. That is the first advantage, and it is a great one.
There is also the increased rate of growth to which we shall be geared. The rate of growth is of great importance to any industry. My noble friend Lord McFadzean and I are competitors in the cable business. Both of us would say that the rate of growth of cable sales is almost directly geared to the rate of growth of the gross domestic product. Think what that means to the thousands of men who work in British Insulated Callender's Cables, or any of the other great cable companies of this country. Those are the real prizes; they are not just restricted to profits. Everybody concerned in industry could benefit, and we are looking at these benefits when we advocate entry.
Thirdly, we would enter a common industrial environment. The difficulties to-day of making an arrangement between great firms in Europe, such as Pirelli/Dunlop, are almost insuperable. Vast
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cost is involved; there are the complications of tax laws, of capital gains tax at different rates in different countries. To get any sensible arrangement between two firms in Europe on the matter of pricing would deter any but the very greatest organisation. If we can build up a common industrial environment, we can start to organise ourselves and rationalise things on rather a better basis.
We shall be able to share the cost of research and development, which is very high indeed, in the advanced technological fields. In many cases, although not everywhere (because it is not true everywhere) there are advantages of scale. We would have a basis for competition in third countries. I attach almost as much importance to that as to the opportunity in Europe. To try and compete with Europe in third countries from a narrow island base just off it is not a beguiling prospect for anybody likely to engage upon it. There will be some increased specialisation; there will be new sources of capital and, above all, we will be able to play a part, which we shall not be able to play otherwise, in shaping the industrial policies and strategies of the world scene through great organisations like the General Agreement on Tariffs and Trade. We shall play no big part on the sidelines, but it is vitally important to industry in this country that we should play a major part, and exercise a major influence in world affairs.
These arguments, to me, are compelling; I know of no alternative that can be offered to the industrial scene in this country which gives anything approaching this as an opportunity—no other combination, no other chance. It would be astonishing if, after Governments for about fifteen years have been struggling to get this prize, we were suddenly at this moment to reject it. The world would be astonished at that decision. I know the bitter disappointment that would be felt by people who work in the great enterprises in these countries if they saw these prizes rejected. There are also disadvantages, too, but we believe that we have the wit, the skill and the ability to take advantage of the prizes. At best we could get into a Europe which was powerful, peaceful and outward-looking and which exercised a great influence in the culture and peace of the world. We may fail

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with that; it may not turn out that way. But there is no chance of its turning out that way for us unless we are in the Community and can play a part in it. Faced with these matters, my Lords, I cannot believe that we should turn our backs upon what I believe must be the larger vision and the brighter hope.
6.36 p.m.
LORD CHORLEY: My Lords, the noble Lord, Lord Thorneycroft, is a particularly difficult speaker to follow. I agree with him in wishing to support the congratulations which he extended to the two maiden speakers. I enjoyed their speeches enormously. They were of very different types. They struck me as being of exceptional interest, and I fully echo what the noble Lord, Lord Thorneycroft, said about hoping that we may hear from them again in the not too distant future.
I had some difficulty in deciding how to intervene in this debate with this long list of speakers. Obviously, as other speakers have said, this is a debate about one of the most important matters that has come before Parliament for a very long time—certainly since the date in 1939 when Parliament decided to pick up the glove so insolently thrown down by Hitler, and did so as a united nation. On such an important occasion, it is one's duty to make one's position clear in regard to a matter of this kind. In 1939 we took action as a united nation; the most lamentable thing about recent events has been the way that a large section of the Labour Party, after going right up almost to the last moment, have now in effect gone back on what they did, as my noble friend Lord George-Brown explained to us. I feel very much with the noble Lord, Lord Thorneycroft, when he asks what the world will think about this; about the way we have behaved. It fills me with a sense of shame and even dishonour that this should have happened when it looked as if we would be going into Europe as a united nation. This has happened because we lack the leadership which we need at this crucial point in our history.
Mr. Roy Jenkins, in an admirable speech in the other place, asked us to
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confine ourselves to the issues before Parliament, and not take to personalities. That was magnanimous advice from him, but I am afraid that I cannot accept it. Politics is largely a matter of personalities and Mr. Jenkins—perhaps the best of our political biographers—has made that clear in some of his outstanding works. The average man does not think his way to his political decisions; he feels his way. And his feelings are very largely dominated by his leaders. One has only to see what happens in the great trade unions to realise how true that is. My feeling is that over these last months the leadership is not what it ought to have been. This kind of interaction of the personality and the ordinary man is bound to go on taking place as long as we have a democratic Government. It always has been so; it always will be so.
During this crisis, my mind has gone back to the Brighton Conference of the Labour Party (which Mr. Jenkins himself was writing about in The Times not long ago) in 1935, when Ernest Bevin overthrew the Leader of the Labour Party at that time, George Lansbury. There was no question about it. He had come to the conclusion that the pacifist policy which Lansbury had been following was no longer safe for this country, and in a massive speech he completely turned the feelings of that great audience. This was a great exhibition of leadership and just shows what can he done by a great leader in circumstances of that kind. And, of course, Ernest Bevin knew perfectly well that what he was doing would disunite the Labour Party, as to a large extent it did, for a time, but he also realised perfectly well that the safety of the country depended on the overthrow of the pacifist policy. It was his work and we owed it to him.
It is a great pity that we have not been able to keep ourselves united in that kind of way under the leadership of Mr. Wilson. When the noble Lord, Lord Thorneycroft, says that he does not attach much importance to what Mr. Wilson is saying, I am afraid I disagree with him completely because if Mr. Wilson had only given the leadership that we needed, had only stuck to the principles which he enunciated in his great speech in May, 1967, quite obviously the country would have come round behind him.

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During all these negotiations undoubtedly there has grown up among a vast part of the generality of the people a feeling of lassitude, even of discontent; and as the opinion polls have shown there has been great disagreement. This is the time when leadership is needed. As people are beginning to realise what is involved, feeling of that kind is tending to pass away. It is quite impossible to believe that Mr. Wilson is still holding the same views as he put forward before the House of Commons in 1967. My noble friend Lord George-Brown has told us; Mr. Michael Stewart has told us; Mr. Thomson has told us. And if we had not had all this evidence from all these people who are right in the thick of it we should be bound to reach the same conclusion from a careful perusal of Mr. Wilson's own speech in May, 1967, to which I have referred. This makes it quite vital that we should in fact subject his present views to a free and frank scrutiny because he has, in my view and the view of many other people who are beginning to lose confidence in his judgment about these matters, completely changed his position. A careful reading of his speech in May, 1967, amply bears that out. Really, no other deduction can be made from it.
Of course, Mr. Wilson is motivated by anxieties not to split his Party; that is perfectly understandable. Ernest Bevin must have been very worried by feelings of the same kind. It is understandable and indeed laudable that to preserve unity one should sink one's feelings, provided that they are not in relation to something which is vital to the country's interest. I find it very difficult to believe that in 1967 Mr. Wilson did not believe that our entry into the Common Market was a subject of vital importance. I find it very difficult to believe that that was not the view of the Cabinet at that time.
LORD DAVIES OF LEEK: My Lords, will the noble Lord give way for one moment? I happened to be present at the 1935 Conference and I happened to be present in another place when it was decided by the private Parliamentary Meeting of the Labour Party that we should go in and negotiate. It was a vote of the Party upstairs in another place that gave authority both to Mr. Wilson and to Mr. Brown (as he then was) to
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negotiate on behalf of the Party. It does not help to keep mentioning one man, because those of us who may also be against are, I hope, against constructively and are willing to have our minds changed if it is at all possible.
SEVERAL NOBLE LORDS: Order!
LORD CHORLEY: My Lords, I do no, think that what the noble Lord has just said has in any way altered the view which I was attempting to put before your Lordships. Quite obviously, Lord George-Brown has told us this afternoon what his impression of the situation was. Mr. Wilson's speech in May 1967 was really a splendid plea for the European Community—a more convincing argument in many ways than the White Paper itself; it might well have paid the Government to circulate it as part of the information material which they have been issuing over these past weeks. Now it is quite clear that Mr. Wilson is taking up a different position and is contending in almost every speech he makes that the proposals in the present White Paper are quite unacceptable. Yet in his 1967 speech almost every one of these points was taken up and discussed by him, and he and my noble friend Lord George-Brown were going in as realists to attempt to negotiate our entry into the European Community at that time.
So far as I can find, there is only one passage in the 1967 speech in which Mr. Wilson indicated any kind of hostile feeling or statement that unreasonable proposals were being put before him, and that was in regard to the financial side of the question which he described, it is quite true, as"inequitable and unfair ". In recent speeches he has been using very strong adjectives, such as"too penal,"too impossible"or"too unjust ". But these proposals now are, as almost every speaker this afternoon has pointed out, more favourable than the ones which were being negotiated by Mr. Wilson and Mr. George Brown (as he then was) when they visited all the capitals of the Community States. They were asking to enter. They were there, in effect, trying to obtain entrance into an important club.
When you are negotiating in that sort of way you have to play your cards carefully and not expect that you are going

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to get 100 per cent. of what you are asking for. That was the attitude which was taken at that time, but it is not the attitude which is taken now, and I personally find this deplorable. It seems to me essential that we should complete these negotiations and enter the European Community as quickly as possible. It seems to me that the terms which have been offered are, in all the circumstances, very reasonable terms. There are certain aspects, particularly with regard to the agricultural policy, which nobody in this country likes, but when the negotiations started that was perfectly well known, and the negotiations were taken up, so to speak, on the basis that such was the case. It seems to me now that to turn round and take this quite different attitude is completely indefensible.
In this debate we have heard some pertinent and valuable remarks about the value of going into the European Community, and I do not want to go over all that ground again. It should be clear to everybody that over the last 10 years, economically, we have made very little progress, if any at all, in this country. Both Parties have been in power for pretty well equal periods during that time, and even at the end of that time there is a malaise in our economy which shows that something is wrong. It seems to me that our industry is not sufficiently broad based, and the only way of getting it on to a sufficiently broad base would be to go into the European Community, which after all is possibly the greatest of the free trade areas in the world. EFTA has been mentioned, but that is not the same in any sort of way as the European Community.
In the 19th century we were the leading industrial power in the world. That was partly because the Industrial Revolution had taken place in this country, but also because to a large extent at that time we had the world as a free trade area, and as long as that was so we were the dominant industrial power. These large areas of free trade are obviously extremely valuable. I do not think the importance of this has been sufficiently stressed. Why is the United States of America so tremendously powerful industrially? Why is the U.S.S.R. so tremen
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dously powerful industrially? Because they have these enormous free trade areas, and it seems to me that the sooner we get into the European Community free trade area the better. Mr. Wilson himself stressed vividly in his 1967 speech that there were over 300 million people, with all the know-how and the build-up which has been described so eloquently by various speakers this afternoon.
The sands of time are running out for us, and we must make up our minds quickly and get on with the job. I have always taken the view that the political side of it, which the noble Lord, Lord Soper, regards with even more distaste than the economic side, is the more important and the more valuable. It has been dealt with so successfully by the noble Lord, Lord Boothby, and other speakers this afternoon that I will not take up your Lordships' time by going over the material which I have prepared about that side of it. Obviously the European Community itself is on the verge of considerable developments which, in my view, have not been really sufficiently stressed during this debate, and if these developments take place our position will be even more difficult than it has been in recent years if we are outside. We really just cannot afford to be outside at the present time.
As I have said the sands of time are running out and it is for us to take what is almost certainly the last opportunity that we shall have of getting into the European Community. I emphasise that this is a European Community and not just a Common Market. Too often it is thought of in this country merely in mercantile or shopkeeper terms. I suppose we are at heart still a nation of shopkeepers, but this is very much more than just a Common Market. It is a great community, with all the openings which a great community has for civilised life. So I say to your Lordships that we must not hesitate, we must go ahead
" There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures."
6.57 p.m.
LORD TEYNHAM: My Lords, I welcome the speech of the noble Lord, Lord Chorley, in many respects, and I should like to begin by saying that my approach to the Motion before the House is one of acceptance of the principles of the Common Market. In fact, many years ago, in the absence of Sir Anthony Eden (as he then was) I led the first Parliamentary delegation of both Houses of Parliament to Paris for the formation of the Western European Union organisation. Also, up to a few years ago I was for a number of years a delegate to NATO, so I must confess that I am biased in the European Community outlook. In my view, to stay out of Europe would be a political blunder of the first magnitude, and our children and grandchildren would never forgive us if we did. I entirely disagree with the noble Lord, Lord Soper, in his remarks about the balance of power. I would go so far as to say that if we had been more closely linked with Europe, and if the countries of Europe had been more closely linked with each other, the course of history might well have been changed without two disastrous wars.
We must be careful to remember that France is no longer a member of NATO, and our acceptance of the Treaty of Rome will not increase our security unless we can convince France that for the security of Europe she should return to the fold of NATO. I think this is a most important matter with which we must deal inside the Common Market. There is no doubt that one day the United States of America may considerably reduce her forces in Europe. We must be prepared for that day, and the closer we are linked to Europe the stronger will our security become.
I should like now to deal for a few minutes with economic affairs. I think it is true to say that three years ago the standard of living in Europe was lower than that in this country, but now the position is quite reversed. Some of your Lordships will remember that a few weeks ago an enterprising newspaper sponsored the visit of an average working-class family in this country to one of the countries of the Economic Community, and arranged for them to stay there for a period. On their return they reported
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that the standard of living was higher than here, taking wage for wage. Some of your Lordships may say, and feel, that this was merely a trumped-up piece of propaganda, but I suggest that any who take that view should try to prove it. It is of course true that a great many people in this country are nervous about the increase in food prices which may occur within the Common Market, and I hope that the Minister who is to reply for Her Majesty's Government will deal with this matter as fully as possible.
Many of us, I would say, have been worried about the position of New Zealand. I am personally quite satisfied with the arrangements that have been made for that country, and I believe that she is getting a fair deal. I think it is true to say that many people in New Zealand—a country I have visited—in some respects welcome the Common Market. Why do they take this view? Because they feel that it will give a greater impetus to that country to branch out into other fields of endeavour and not concentrate on dairy products almost to the exclusion of industry. Some of your Lordships who have long memories will look back to the days when Chile was a prosperous country which had a good exchange rate with sterling. Unfortunately for Chile, the economy was largely based on nitrate, which was easily mined or dug out of the surface, and sold to Europe as a first-class fertiliser. Then the First World War came along, and in a short time the Germans began to produce synthetic nitrate. As a result, in a comparatively few years the economy of Chile was almost ruined and it has never really recovered from that even to-day. I spent nearly four years in that country and saw it all happen around me. I certainly would not attempt to suggest to New Zealand how she should conduct her affairs, but I do suggest that the example I have mentioned is a grim warning.
I must say that I am worried about certain aspects of the Immigration Bill, which is going through your Lordships' House, as it will apply if and when we go into the Common Market. I am sure that a great many people in this country will feel the same—they will at least be very disturbed—if, for instance, a German is able to come to this country freely under Common Market rules but an

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Australian or New Zealander is to be discriminated against on the question of entry. We certainly cannot be put in the position of treating Australians, New Zealanders or Canadians as aliens while Community members are allowed to come over here freely. I should like to ask Her Majesty's Government what they propose to do about this inequality. I have no doubt that if we had been able to enter the Common Market in the early 'sixties and not been rebuffed by the great General de Gaulle, we would be a great deal better off and more prosperous, with a higher standard of living than we have to-day. There are, of course, many exponents of the idea building up an Atlantic Free Trade Area and keeping ourselves free from Europe. But I maintain that this idea is not possible; it would not be accepted by the United States, and certainly would not be accepted by Canada.
The noble Lord, Lord Boothby, has raised the question of possible destruction of the breeding grounds of fish off some coasts of our country unless an agreement for their protection is made by the Common Market. I would entirely accept the views of the noble Lord, Lord Boothby, but I must remind him that deep-sea fishing rights are also very important. We have recently heard that Iceland is claiming a 50-mile limit for her own fishing rights; and Norway, I believe, wants a new agreement. I hope it may be possible to get an agreement on all these fishing matters before we enter the Common Market. Perhaps the Minister who is to reply will deal with that point. My Lords, I would conclude by saying that I have no doubt that if we remain out of Europe and try to"go it alone"we shall gradually become poorer and poorer. What we are really going to do is to join what might well be called a mutual aid society, not only for commerce but also for security. I welcome the Motion before the House.
7.5 p.m.
BARONESS BIRK: My Lords, may I first add my congratulations to the two noble Lords who have made their maiden speeches to-day. In the mid-1950s, as a young aspiring candidate for another place, I went to Luxembourg on a delegation to visit the Coal and Steel Community. It was then that, quite out of
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the blue, I felt gripped with the whole idea of Europe and with the spirit of Europeanism which seemed to me to rise well above the technologies of the Coal and Steel Community. I realised then that those countries had accepted that if their talent and experience was to make its contribution to world affairs and to protect their own legitimate interests in the political, economic and monetary fields, they would have to maintain and develop institutions of unity far greater than anything that had been achieved in the pre-war period. I then realised for the first time that our situation was basically the same. Indeed, I came back feeling that we were almost too late at that time, and during the years of stalemate my enthusiasm waned, like that of many other people; but once a real opportunity arose for us to go into Europe, again my enthusiasm increased, for I really believe that only by joining with the Continental countries can we make our vital contribution to world affairs.
If Europe continues, now, as I hope, with our help, to develop this co-operation on a regional basis, she will be able to play a part in furthering prosperity and peace on a world scale. I find it difficult to go along with those who believe that there is more safety in the perpetuation of the nation State. I feel that every time we can break down that sort of barrier we take a step towards the prospect of greater world peace; for I believe that the nation States, the small States, with access to the weapons that there are around today, are a very real danger to world peace. And by joining together we are not losing our identity. When we look at the countries in Europe, they have all preserved and kept their own identity and their way of life. One of the things that has struck me is the fear of those who are against our going into the Market and who, I believe, underestimate what we have to contribute. One side is what it is going to cost us and what benefits we are going to get. The other, and equally important if not more important, side is what we can contribute to the Community.
First, I think, is our influence, which we cannot ignore and which often appears to be generally very under-stated. Then there is our whole way of life which we should be taking with us; and here we

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have a great deal to offer and a great deal to be proud of. Many people I know in the communications field—in Press and broadcasting—in Europe very much envy our institutions, our freedoms. I do not believe that we are going to lose those, but I do believe that we shall be able to influence others to accept some of the freedoms that we value so much. The Social Democrats in Europe badly want us in, which seems to me, as a member of the Labour Party, another added reason for our going in as quickly as we can. We have to remember that they felt many of the fears, anxieties and concern that are felt very legitimately by most of us, but they found that, on balance, the pros outweighed the cons and that the advantages of being part of the European Community were very great.
I do not want to deal with the economic side, because so many people have dealt with it and there are others far better qualified to do so than I. If we do not go in what are the political alternatives? Do we go even further under the trans-Atlantic blanket? I do not think any of us want to see that. The other alternative is to"go it alone ", which would mean that we should have no influence over major events in the world and should certainly not be able to contribute towards formulating a real peace between Eastern and Western Europe, which I feel is one of the great points about our going into Europe.
It is not only the terms that are important. What also matters is how the different problems are dealt with as they arise, and it must be pointed out that the Government have not yet given any clear analysis of how they see the economic situation developing as we go in, and after. I think we are entitled—even those of us who want to go into the Market—to ask the Government for more information on both the economic and the political sides. We have only this month heard the news that unemployment in this country has reached the astronomical number of nearly 830,000. This must make us look critically at the Government's economic and social performance at home. We have to do this, because what is done at home is relevant to what will happen once we go into Europe. Of course I hope that by then we shall have a Labour Government. Whatever we do, there is a chance to be taken, but that is the case with most deci
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sions, certainly the big ones, in life. That is the case with marriage but, though the divorce rate may be high, the majority of marriages still succeed.
However, what I feel is the most important factor—more important, even, than the problems of New Zealand butter or of sugar, because next year there will be different problems—is the future and the young people. It is interesting that we have seen no protests against Europe from young people, no sit-ins, no demonstrations of xenophobia. They accept naturally the words"abroad"and"foreigners ". Maybe this is because school children and students have had more opportunities to travel than their parents had. For young people more than for anybody, a decision by Britain to refuse to play her part in the great European co-operative enterprise will be frustrating and bewildering. I believe they find the international rat-race repulsive, and see hope, prospect and scope for idealism in the growing sense of world interdependence. They want our country to play its part. And so do I.
7.13 p.m.
LORD BETHELL: My Lords, like other speakers, I should like to congratulate the two maiden speakers this afternoon, my noble friend Lord McFadzean and the noble Lord, Lord Burgh. They were extremely lucky to have such a subject on which to make their political debut. This is really a world-shattering moment, and it is superb to be able to speak in a debate such as this when one begins one's political speech-making. I was very moved when my noble friend Lord Carrington spoke about the problem of accurate prophecy in diplomacy and foreign policy. He outlined for us, in a very clear and poignant way, the problem of his generation when they had fought the war and, at the end of it, found themselves living in a Europe which was devastated and seemingly unwooable by the countries which had won it—Great Britain, in particular. Why should we align ourselves with Germany who had just fought us so viciously, and with France which had been defeated? It seemed incredible that we could make such a choice when offered the alternative of a special relationship with the United States of America and with a British Empire which people must have thought

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was going to continue for a long time to come.
It is one of the differences between my noble friend's generation and that of the noble Lord, Lord Burgh, and myself, who were children during the war and in the years which immediately followed it, that we feel differently about this issue. The pride in our achievement as an imperial Power is outside our own personal adult experience. It is for us a matter of historical study, and the balance between what was good and what was bad in our imperial years seems a matter of analysis to those of our age, rather than a matter of emotion as it does to those who experienced them. This is why it is easier for the young to accept with excitement, and without nostalgia and despondency, the idea of giving up our really close ties with our former colonies, and moving ahead instead into a Europe which I hope will provide us with our future, and will provide the world with a body which will be extremely important and, in effect, a super-Power.
The noble Lord, Lord Burgh, said—and I thought it was a good phrase—that he hoped that this enlarged Community would become the germ of a common network of communication. This idea is something which I would commend to your Lordships. It is like a spider's web, with all the countries which formerly had empires coming together, but at the same time having threads going out towards the countries with which they were connected, so forming a greater unity to which I am sure the world is moving. There was a note of nostalgia for the past in the speech of the noble Lord, Lord Shepherd. He mentioned in particular his fear of Europe becoming inward-looking. I do not see very many grounds for such fears. So far as I can see, Europe has historically been the most outward-looking part of the world. The United States of America, for example, consists almost entirely of Europeans who have been outward-looking.
One of the problems of the world is the isolationism of the super-Powers. At the moment the United States is having what one might call a nervous breakdown, and turning herself into a fortress in the face of her sufferings in Vietnam. China, in spite of her recent initiatives, is still cut
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off from the rest of the world and from world culture. And, although Russia has taken certain steps towards joining with other countries, particularly in scientific progress, she still seems determined to keep herself clear of ideological con-troversy. I can only think that the reason for that is that the Soviet leaders are frightened of ideas which might subvert their people and undermine their own authority.
That brings me to what the noble Lord, Lord Shepherd, called his vision of a united Europe. There were even some cries of"Hear, hear"from the Benches opposite, when he spoke of his vision of a united Europe, East and West. Of course that is the vision not only of Members of your Lordships' House, but also of both sides of the Iron Curtain. The question is: on whose terms do we have this unity? It was the vision of Marx and Lenin, but of course we in this country would reject unity on those terms. If we are to achieve any sort of unity between the East and the West of Europe it seems to me essential that we in the West should unite, in order to move towards the sort of vision which the noble Lord, Lord Shepherd, had in mind from a position of strength. How can we get a unity on any terms approaching our own other than from a position of strength?
LORD SHEPHERD: My Lords, may I intervene, merely to say that I entirely agree with what the noble Lord is saying.
LORD BETHELL: My Lords, I am very grateful to the noble Lord. I only mention this matter because I am aware of the very strong feelings that have been expressed in Eastern Europe and on the far Left in Western European countries against our joining the Economic Community, and against the enlargement of it. I often ask myself,"Why do they feel so strongly about it?"There are, I know, members of the Labour Party on the Left Wing who feel very strongly that it would be disastrous for us to go in, and I can see their reasoning given the fact that they are Socialists of a more doctrinaire sort than perhaps one sees on the Front Bench opposite. A rigidly planned economy will be less feasible once we are economically independent with Western Europe.

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The far Left hardly ever has a share in a Party of Government in Western Europe. In the Social Democratic Party of Germany one does not find Socialists of the far Left. This must be a genuine problem for the Opposition Party, and my only comment on it is to wish well, and to take no political advantage of, those members of it who support our entry into Europe, since this problem is one which I hope will transcend Party differences, and is certainly much more important than them.
I know there are others in this country—and I will waste only a few words on them—who are opposed to our joining the Western European Community simply because they fear that a Ten rather than a Six will make Western Europe stronger. I can see no reason why the Communist bloc and the Communist Parties of Western Europe oppose our joining—of course they do not all do so, but some of them do—other than because they fear that it will make Western Europe stronger, and naturally this would be against their own Party interests. Furthermore, the prosperity which the E.E.C. has created in Western Europe shows up the comparable movement forward in the Soviet Union, Poland, Czechoslovakia, Hungary and other reasonably developed countries of Eastern Europe. It must be very galling to them to see the tremendous strides forward which have been made in Germany, France, Italy and Holland since the Six were created. It must in fact be a source of fear because this economic development, this prosperity, becomes known across the Iron Curtain. There is no iron curtain when it comes to information these days. No wonder they oppose its extension, and are frightened of a situation in which they would find themselves growing comparatively poorer.
In the meantime, will our relations with Eastern Europe suffer? One is told, if one reads the Press of those countries, that if we ally ourselves with France, Germany, Italy and Holland we shall jeopardise the strides that we have made towards friendship with the Soviet Union, Poland, Hungary and Czechoslovakia. I see no grounds for such fears. Has France had any difficulty in developing her relations with the East since she became a founder member of the Six? I did not notice de Gaulle hamstrung by
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his connection with other countries when he was making approaches to the Soviet leaders and to Poland. Two years ago did Willy Brandt find himself in a difficulty because of his connections with other countries when he launched his Ostpolitik, and when he concluded treaties with Poland and the Soviet Union? These have succeeded to a remarkable extent in relaxing tension in Europe, and Willy Brandt has achieved something which I think is grossly underestimated in this country.
The noble Lord, Lord George-Brown, I thought, put the point very well when he said that the question of sovereignty really does not arise. We shall give up no more than we have to once we join. If we only achieve an economic unity and make no further step towards unity, it will still be worth joining. But if we are called upon to move towards a closer unity, there should be no question of our giving up any sovereignty unless it is in our interests to do so, and the noble Lord feels that no leader in the Six would expect us to do so unless it was in our interests. If we find that it is in all our interests to achieve a closer political unity, we shall find that our membership reinforces our ability to promote our present national interests, particularly in the face of the Eastern bloc, which is more powerful.
My last point is an emotional one, and a fairly simple one. For 10 years, ever since I was a university leaver, I recall that we have tried to make efforts to join the E.E.C. It has for a long time been the idea behind successive Governments. Now, at last, we have the chance to do so, and, to my amazement, I find that there are large numbers of people in Parliament—not many of them in this House, I am glad to say, and not many of them in my Party—who oppose it, in spite of these years and years of trying and of being turned down. Now, when we are on the point of success, we are confronted with people who are rejecting the idea for reasons that seem to be connected with something that happened last year, or something that happened last month; last month's trade figures; last month's unemployment figures; who won the last Election; little things like that. If we do not go in we shall be the laughing stock of the world.

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I recall watching the Labour Party conference on television a few days ago. There were Social Democrat delegates there who could not believe their ears when, after the years of working together with the Labour Party leaders, and supporting our entry into Europe, they suddenly found that prominent members of that Party were opposing it on points which seem trivial. It is simply a question of taking a deep breath, and looking at the vision of what we are to do with our future, rather than the short-term view of what is happening this year. All I can say to your Lordships, in conclusion, is that we cannot stay all on our own in face of a world which is fitting itself together, in spite of us. The Common Market is not going to go away if we do not go in. It will continue, and we shall find ourselves, once the world has fitted itself together, as a piece of a jigsaw puzzle suddenly stuck out on one side forming no part of anything. As my noble friend Lord Carrington put it, we shall then be in for a gradual and steady decline.
7.30 p.m.
BARONESS EMMET OF AMBERLEY: My Lords, I should like to start by congratulating the two maiden speakers, who added a great deal to the interesting speeches we have had to-day. In August, 1914, Sir Edward Grey said:
" The lamps are going out all over Europe; we shall not see them lit again in our lifetime."
Nor did he see them again in his lifetime. For the few minutes I would keep your Lordships, I am not going to speak about bread and cheese or about economics—though, of course, they are immensely important. If ever there was a time when man cannot live by bread alone, this is the moment, when we ought to be looking beyond the obvious material things to something more important in the value of living survival.
I turned up"Europe"in the Encyclopædia Brittanica. I was curious to know where the name had come from and I found that according to Homer, Aeschylus and the Phoenicians, there arose, I suppose among the maritime nations in the Mediterranean, a label for Asia,"As-land"or the Land of the Rising Sun, and for the lands to the West and North, the
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name was"Erip"or the Land of Darkness, the Land of the Setting Sun. This conjures up certain pictures and thoughts. Our sunset land through the centuries, in spite of internecine strife, became homogenous in its culture, in its geographical outline and cultivation and especially in its Christianity. Always through those centuries, England (as is was then called) was part of European history, whether in peace or war, and as our history developed we retreated from our endeavours to govern Europe and stretched out beyond the oceans. With the power this gave us, we saved Europe twice during this century from tyranny.
This consciousness of our responsibility and yet of being different started with the Tudors and through many wars was stamped upon the British race, because, unlike our European brethren, we have never been invaded and occupied since the Norman Conquest. That does not mean that we have been severed from Europe. We have through the years received political refugees of every type and have absorbed them; this has been all to the good and will continue to be so, so long as they come in reasonable numbers. It is always a wonder to me that with the great wide world to choose from, people should want to come to these little Islands.
But the moment has come now when, instead of sending armies across the Channel, we are about to join the European consortium, invited by our Continental brothers. I say"invited"advisedly, with due consideration of what this word means. I have always been persuaded that we would never go into the E.E.C. until the E.E.C. needed us as much as we need them. And we need them as much as they need us at the present time. We are historically one family and, like a family, we shall keep our individual characteristics—that is really what makes a family so interesting and sometimes desperately tiresome. If I have any qualification to speak to-day, it is that I know European languages and countries and for the last ten years I have been in close contact with European political Parties and politicians. I can see clearly that if we are not to be drawn either into a Communist or United States form of civilisation, we have to summon and bring together all the strength of the European genius to survive, and not just

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to save but to imprint and fortify in our Continent those values which we believe are important for the human race. This is not to disparage the Communist way of life, because that is their way of working out their salvation, or to denigrate our American friends, with their splendid generosity and immense courage in outer space. At this moment they are going to the Moon. But neither the Communist nor the American way of life is for us and for Europe, of which we are an integral part. Nor does Europe wish to become a sort of super Power. I am sure that the noble Lord, Lord Soper, could be reassured upon this point. I am sure we should develop in Europe differently.
We in Great Britain have made immense contributions to European civilisation, in literature, in art, in music, in political savoir faire, in inventiveness of every kind and in recuperative power. We cannot afford to let this opportunity slip away, especially when we can make such a tremendous further contribution to our Western world by coming together with those who now want us. I believe that this is a great opportunity to bring renewed spiritual strength to the struggle for human survival. I believe sincerely that by the coming together of European minds and the pooling of our resources, we can still make this a world worth living in for our children and for future generations. And if the word"still"sounds a trifle sombre, it is because our world is so enslaved by scientific discoveries, so rapid, so overwhelming, that we are in danger of losing our way and lacking the moral fibre to stand up to our moral responsibilities. I believe that this is where a properly oriented Europe can have a powerful and healing voice. If we go in, we shall be walking towards the sunrise. If we stay out, we can see nothing but the sunset and darkness behind us. When we come together and join hands, I believe that the lights will once again go up all over Europe.
7.37 p.m.
LORD WILLIS: My Lords, I hope to be brief. I put my name down only because I believe with the noble Lord, Lord George-Brown, that on an issue like this everybody—even dramatists and script writers—should stand up and be counted. I want to say straight away that I am very much in favour of entry
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into the Market and I always have been. I think that we have lost precious years and opportunities by being outside. So far as I am concerned, the more quickly we get in, the better. As for terms, I always took it for granted that we should go in on reasonable terms. I could not imagine even a British Government would be so stupid as to negotiate and accept terms which were catastrophic, and by no stretch of the imagination can the terms we are now being offered be called catastrophic. Perhaps a Labour Government would have put a different emphasis and stronger weight there, but, by and large, I do not believe the terms would have been materially different. We have heard as much to-day in one or two speeches. May I say, in parenthesis, how much I regret this quoting of one quotation against another in order to prove certain positions. I believe that from the point of view of my own Party this can only give aid and comfort to our enemies and does not help us.
I am no economist and if I were a religious man, I would go down on my knees and thank God for it, because I never cease to wonder at our economists, to be bewildered, amused, astonished and outraged by their antics. Like so many plœnixes, they keep rising from the ashes of their past disasters to pontificate and prophesy about their next. Since the terms were announced, the Press has been full of articles and letters—learned, logical, stuffed with statistics—by our economists, all seeking to sway us one way or the other. Some tell us, and back it up with seemingly irrefutable figures, that entry into the E.E.C. would be like going through the Golden Gate into a new Jerusalem. We can almost hear the heavenly choir in the background. Others, equally eminent and again with irrefutable statistics, tell us that the gates are made of plastic and entry will lead us to economic disaster; that it is a foul and fiendish capitalist trap which will lead only to the destruction of all the ideals in which we believe. My Lords, what distinguishes all these articles, speeches and letters is their assurance. These marvellous economists know. They are shrewd: they know. Well, well, well—you could have fooled me! From my position of total ignorance of economics I cannot help asking these gentlemen,"What have you been doing for us lately? Where

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have you been for the last 20 or 25 years? What have you done for us during this period, when we have been stumbling from one economic crisis to another?"There is a great deal of talk about credibility, but I should think that if anybody has forfeited credibility it is our economists, and the greatest service they could render the country to-day would be to keep silent and let us think this thing through on our own. I am fed to the teeth with them.
My Lords, I support entry for many reasons. I believe that it will give our industry, on both sides, the openings and the competitive goad it needs. Further, it will be the end of the Imperial illusions, as so many people have said. Above all, it will mean that, stripped of all that grandeur, all the megalomania and all the nostalgia of the past, we can look forward with a new realism to a status which much more equates with the position we hold in the world to-day. It will further remove the risk of war, and will bring nearer a really united Europe. Here let me say how much I share Lord Shepherd's vision of a united Europe, and even further the vision of the noble Lord, Lord Soper, of a united world. I do not think that going into the Common Market and joining with Europe is inconsistent with that vision and that dream. You have to begin somewhere; you cannot sit hack contemplating your navel and say,"We will not go into Europe until we are holy and we have a wholly socialist State here in Britain." As I said, my Lords, I am no economist, and there are some things to which, as the noble Lord, Lord Bethell, said, the heart and the instinct respond—and that is often a wiser guide than the economic considerations. To me, my Lords, going into Europe is a gut issue. I feel in my guts that it is right.
7.43 p.m.
LORD ROBERTHALL: My Lords, if I speak in a tremulous and nervous tone your Lordships must forgive me, as I have the great misfortune to follow the noble Lord and I am, I must confess, an economist. I can only say that when he has been around rather more he may take the more charitable view that we are not much worse than other professional men, where you can get anybody on any side.
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My Lords, we are debating to-day the terms of entry, and I thought it would be interesting to re-read our debate in March of last year on the White Paper An Economic Assessment, which was of course produced before the terms were known. On my rough count, 35 noble Lords spoke, 26 were in favour with various reservations. 6 were against and 3, perhaps, were"Don't knows ". Now that we do know the terms, I thought it would be interesting to see what sort of count we had to-day, but I am afraid that so far the views have been very strongly in favour. On my count, there has been only one against, with perhaps the noble Lord, Lord Shepherd, nearer the"Don't knows ".
For my own part, I am pleased, and indeed pleasurably surprised, at the outcome of the negotiations. I had three reservations about the terms. The first two were about New Zealand and Commonwealth sugar, where we have honourable commitments which seemed to run against the basic tenets of the Common Agricultural Policy. It is a very happy outcome indeed that both New Zealand and the spokesman for the Commonwealth Sugar Agreement have expressed themselves as satisfied. My third reservation was that in the negotiations the Six should show a sympathetic attitude towards our problems. I do not think we wanted to get all that we hoped to get. It was not that kind of negotiation. People say we could have got better terms. I say,"Thank goodness we did not get them!"What we wanted was an amicable agreement as between prospective partners. I think we have got that and it ought to give us great confidence for the future.
In the early years of the negotiations, with the noble Lord, Lord Plowden, I used to have to discuss with M. Jean Monnet and his staff what was the likely impact of entry on this country. It was too early to say. We had to be vague, and at that time Ministers did not like that vagueness. Jean Monnet said it was impossible to spell it out, but that once inside, once we were all partners in a common enterprise, there had to be give and take, and there would be. I was very much struck when I read paragraph 96 of the White Paper now before us, which says, after the paragraph saying that a

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precise figure could not be put on the balance of payments costs:
"…the Community declared to us during the course of the negotiations that if unacceptable situations should arise ' the very survival of the Community would demand that the institutions find equitable solutions '."
I think the history of the Community and the history of our negotiations entitles us to think that those are not empty words, and that we need not therefore worry about the predictions of some uncertain future made by some of the economists to whom the noble Lord, Lord Willis, referred: that you can imagine situations in which the rest of the Community will gang up against us and that we will be reduced to a backward, neglected and impoverished hanger-on. It is a logical possibility, but that is all it is. My Lords, it is only too easy to terrify ourselves by making a series of hypothetical, unfavourable speculations leading to the worst. The only logical position for people who do that is with their heads under the bedclothes.
All the arguments for and against have been rehearsed, and I will try to make only one more point. There is one argument against entry which was used in the past mainly by the French when they were rationalising the General's veto. That was that at that time we were too weak to enter. Again the argument is being used that we are too weak to enter. It was lightly touched on by the noble Lords, Lord George-Brown and Lord Thorneycroft, and I should like to associate myself with them. It seems to me that that is a misunderstanding of our present position. Our balance of payments remains surprisingly strong. We even have the agreeable experience for this country that for the time being the pound is stronger than the dollar.
But, more than that, we have now got a large margin of unused capacity in the form both of labour and of industrial capacity; and the hard times through which our firms have been passing have had one very beneficial result: they have been forced to look at their use of labour. Labour has been squeezed out; we are probably using our labour force more economically now, I would say—and I have seen a good deal of it—than at any time in the post-war period. Therefore, we have the potential for big increases in
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output. Unemployment is unpleasant, unused capacity is unpleasant: but where it is from our own choice it gives us great freedom of manoeuvre, much more than we have had in most of the postwar period when we were running over-full and economically bursting at the seams. It is true that the Chancellor of the Exchequer has just announced measures which will use up some of this capacity, but I do not think they are likely to overstrain us or to use it up completely. I think that the character of the measures gives us some confidence. Several of them will run off by themselves and the main other one, the change in purchase tax, is easily reversed.
LORD WILLIS: My Lords, may I intervene to ask the noble Lord a question? Is he, as an economist, saying that the existence of this large pool of unemployment is a good thing, that it gives us freedom of manoeuvre?
LORD ROBERTHALL: My Lords, I think I was saying that it was very unpleasant to have unemployment, and very painful, but that it gives us resources that we can use in the same sense as a general engaged in a war who has troops in reserve has some freedom of manœuvre.
The real weakness in our situation does not lie here. We have a weakness. It is in our continued failure to deal with inflation, the continued increase in costs which is progressively undermining our competitive position. Those who doubt this need only look at our terms of trade, which have been improving so much. It is very nice that we should get our imports for less of our own goods. That is what better terms of trade mean. But it is not so pleasant when we are priced out of the market and the day of reckoning comes, and we have to face either deflation and back to"stop-go"or a devaluation. To my mind it is fortunate that floating rates are now respectable, so that if we have to face the second alternative we will not be hanging on in a hopeless position. This choice will face us whether we go in the Common Market or stay out. I should be prepared to argue that there would be a slightly better chance of controlling cost inflation inside the Market.
We have had a painful and convincing demonstration of what many of us have

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said for a long time: that no politically tolerable level of unemployment will stop cost inflation. The Government now claim that de-escalation has taken place and will continue. I hope sincerely that they are right; but it is not a good augury that we have gone over to reflation with so little to show in the form of restraint for the sweat and tears of that period. That in my view is the basic weakness of our position, and has nothing to do with whether we enter the Market or not. For the rest I wish the Government every success in leading us into the Market. To my mind, the position now before us is, on the one hand, to return to being what for so long we were, a country which looks forward and outward; and, on the other hand, to choose a path uncharacteristic of our great past, to fix our eyes backward on that past and inwards on our not very great present.
BARONESS GAITSKELL: My Lords, before the noble Lord sits down, as he is such a distinguished economist, may I ask a question? Is he really saying, as I understood him to say, that the only answer to cost inflation is more unemployment?
LORD ROBERTHALL: No, my Lords, not at all. I am afraid that I cannot have made myself clear. I thought that my views on this subject were well known: that to try to stop cost inflation by unemployment was politically intolerable. Therefore, in my view the only way to stop it is with a wages policy. I have never claimed that unemployment was the way to stop it.
7.57 p.m.
LORD JACQUES: My Lords, in our debate of March last year I put forward in some detail the economic arguments, as I saw them, why we should become part of the Community. I am not going to repeat those arguments but I think that they are equally valid to-day. Furthermore, as time goes by, I am increasingly convinced that Britain can make a bigger contribution both to the peace and prosperity of the world inside the Market than outside it. The Community is the first attempt that has been made to unite Western Europe by reason rather than by force. Here you have nations which were traditional enemies working together for the common good. It can at least be said
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that the likelihood of their coming into armed conflict with each other is less than it has ever been, certainly in our lifetime. Furthermore, the coming into being of the Community has not deepened the rift between East and West Europe as many feared it would. The tensions between East and West Germany are less than they have been since tile War; the tensions between Germany and Poland are less than they have been since the War. Indeed the whole of the relations between Eastern and Western Europe have been better in the last 13 years than in the preceding 13 years.
In human affairs, the harmony and strength that comes from unity is respected, and I believe that this is one factor in there being better relations between East and West Europe. The Community is cynically described as a"rich man's club looking inwards ". Let us look at the evidence. The tariffs around the Community on average are slightly less than our own tariffs; the trading associations which the Community has got with under-developed countries are so attractive that some of our own colonies are now partners to those associations. They admit imports from the Community at lower tariffs than imports from Great Britain. All the countries of the Community, with the exception of Italy, give aid to the underdeveloped countries on a greater scale than we do. The argument that it is a rich man's club looking inwards does not stick on the basis of tile evidence.
Furthermore, some of the countries within the Community have the same kind of problems as we have of regional development in their homelands, and they are using very similar remedies for them. In all the countries except Italy not only are wages higher, but paid holidays are longer; more money is spent on social services and on housing, and in the two most important partners in the Community there is legislative provision for workers' participation in the decisions of the larger companies of a kind we have not got here but with which we could do very well.
I have studied the terms with some care, and with some pleasure and some disappointment. I have read with especial pleasure of the terms for New Zealand produce. Those terms are very much better than I has reason to expect. On

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the other hand, I read with disappointment of the contribution that we have to make to the Community's budget. I think it is excessive, especially in the first three years; but it is perhaps appropriate that if some terms have to be harsh and others less harsh the harsh ones should be those borne entirely by ourselves and the less harsh those which are partly borne by our friends overseas. As a package I should say that without doubt it is acceptable and up to our expectations.
I also agree that there are some things that we cannot calculate with any reasonable accuracy. We cannot calculate the effect upon our balance of payments of the changing pattern of trade or the free movement of capital. But we have one happy advantage over the Six who are already members of the Community. We have the benefit of their 13 years' experience. They had exactly the same fears as we have now. Germany, for example, had to make a substantial contribution to the Community's budget and feared that it would have an effect upon her balance of payments. The French Communists forecast massive unemployment in France. The Dutch were afraid that their workers would leave for Germany en masse. The Italian Communists said that the country would become even more depressed. None of these things has happened. Belgium, with her declining industries and her slow rate of growth, joined with some trepidation, but from the beginning her growth has been at twice the rate that it was formerly. I believe there are good reasons for thinking that our experience within the Market will be very similar to that of Belgium; the circumstances are very much the same.
I hope that we shall accept this hand of friendship that we shall enter the Market as an act of faith and throw in our lot for the common good.
8.5 p.m.
LORD GREENWAY: My Lords, I, too, should like to add my congratulations to our two maiden speakers, the noble Lords, Lord McFadzean and Lord Burgh. I put my name down to speak in this great marathon because the noble Lord, Lord Sandys and I were the only Members of your Lordships' House to attend the séance in Strasbourg at the Maison de 1'Europe two weeks ago. My
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Lords, do not be worried by the word"séance ". This is no mystic ball, nor Voodooism, for it is in fact printed on the Order Paper every day in the great European Parliament. In other words, the European Parliament is a séance.
As members of the delegation from both Houses at Westminster, observing for the first time, we were introduced to the Chamber by the President. This was a most moving occasion. We heard statements on the various agreements reached in the negotiations on the United Kingdom accession to the E.E.C. on June 23. These, my Lords, were made by all Parties in the European Parliament, in the Chamber itself in Strasbourg. We had two sessions, lasting about two hours, with the Reception Committee of the European Parliament at which both sides had a very healthy exchange of view. The breath of fresh air that was blowing in through the windows was so rejuvenating to all present that it became a fresh gale. My Lords, the temperature outside was 97 degrees, but we were rejuvenated and refreshed. It was terrific.
I will give two examples. One evening on the terrace I was present with at least 10 members of the European Parliament with some Members of our Parliament On my left I had an Italian who was a Communist, and on my right was a lady from Luxembourg: she is a Social Democrat. I was very interested in what the noble Baroness, Lady Birk, said about her visit to Luxembourg, because this lady is mayor of her city in Luxembourg and she is a great Social Democrat. Her city is a great steel city. She was with another great lady who is the Burgomeister of Luxembourg itself. They have six members of the European Parliament and two are ladies, so a third of their members in the Luxembourg Parliament are ladies.
There were many members of all Parties present, chatting amiably together as if they had been doing so all their lives. This was only one example of the many and wonderful occasions on which we met each other belonging to a new European school, the great school of the future. It was simply wonderful. I talked to many people in all parts of this great European Parliament—interpreters, translators, secretaries—from all parts of the Community of Europe. Language, I

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assure you, is no problem. They all said,"Your visit here this week has been to us a wonderful breath of fresh air. It is what we have all been long awaiting"My Lords, if we do not enter this great history of the world that is coming to pass it will be a disaster for the United Kingdom and for Europe.
8.8 p.m.
LORD HANKEY: My Lords, we seem to have shown an almost incredible degree of unanimity in our debate on what until now appeared to be a very controversial question. I have never felt that it was as controversial as it appeared to be. I agree with all the economic and political and other arguments used in this debate in support of our entry and I do not propose to repeat them. I should like to go back a little and look at the history of the period we have lived in and to show your Lordships that if we take a dynamic view of what has happened since the War, then what we are now proposing to do is a logical and sensible conclusion to what has gone before.
My mind goes back to that very great Foreign Secretary, Mr. Ernest Bevin. I was head of the Northern Department in those days and we were very worried about the state of Europe. It was in a tremendously disintegrated state, with Communism threatening on every hand. I remember in that summer of, I believe, 1947 Mr. Bevin picked up the telephone and called General Marshall, the Secretary of State in the United States. The result, some ten days later, was the famous speech which started the Marshall Plan, out of which arose the O.E.E.C. Then I remember another remarkable occasion when Mr. Bevin sent for Lord Gladwyn (he was Mr. Gladwyn Jebb at that time) who was head of the Reconstruction Department—I am sorry the noble Lord, Lord Gladwyn, is not here. Mr. Bevin said to Lord Gladwyn:"This idea of a Council of Europe is very interesting, but we have to think what functions we can give the Council of Europe to do. You go away, Gladwyn, my boy, and think this out, and come back with a sensible plan." Some time later Lord Gladwyn did come back and we had another meeting. He said that he could not really think of any functions that we could transfer—not, at least, any functions that anybody would at that time approve of
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transferring. I mention this point because it has been the fundamental difficulty: we could not agree upon what functions we were going to transfer to these various bodies. Nevertheless, we set up the O.E.E.C., first to apportion Marshall Aid and then to reduce the financial and trade restrictions between European countries, and from that the tremendous upswing of prosperity in Europe proceeded.
It is one of the tragedies of our time that the British never seem to believe in anything, even themselves, for very long. This, I am sure, is what the noble Lord, Lord Thorneycroft, was thinking when he mentioned the difficulties the Europeans had with London. The result of this was that the British got pushed into the Chair of the O.E.E.C., as I well know, because I was afterwards chairman of the O.E.E.C. at the official level. It was felt that if we were in the Chair we could not decently refuse to support such an institution. If I may say so, the noble Lord, Lord Thorneycroft, was a superb Chairman. His name has never been forgotten in Paris, and if you ask anybody associated with the O.E.E.C. who was the greatest Chairman they ever had, they will unquestionably say,"Lord Thorneycroft ".
Reference has been made to Sir Anthony Eden, now Lord Avon. I think the Treaty of Rome would never have been possible if Sir Anthony Eden had not gone round Europe on the failure of the European Defence Community proposals and, by a superb exercise of personal diplomacy, enabled a reconciliation to take place between the Western Powers and their former enemy, Germany. Your Lordships will recall how in 1953–54 Sir Anthony Eden enabled Germany to be brought into the community of Western Nations as an ally. Without that, I do not think the Treaty of Rome could ever have been concluded. I should like to defend Sir Anthony Eden against being a poor European: he was, in fact, a very good one, but, like Mr. Bevin, he could not think of any functions which we would willingly transfer to these international organisations.
Then we have to remember the sad events of 1956, because that was a train of events which completely changed the situation of Great Britain. From being a first-class nation which aspired to lead and help the other European nations, we

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suddenly took a lower rank. Stalin once said that wars do not change the course of history; they hasten it. In effect, we lost a war, a peaceful war, if you like, on that occasion, and it certainly hastened the course of our history. I do not think we have ever been in a position since then to dictate the pace in Europe. We tried hard with the proposed European Free Trade Area of 1958 and so on, but after that I think it was inevitable that we should, sooner rather than later, decide to try for membership of the Common Market.
If your Lordships will look back at the traditional lines of our foreign policy, you will find that it has usually been to endeavour to ensure that the nations who live opposite our shores did not all get together. That policy, I think, is no longer applicable. It would be obviously disastrous if we were to try to divide the Common Market; and, on the other hand, it is probably as true as it ever was that we shall be a poor off-shore island, and subject to a great deal of pressure—, such as the economic pressure that we suffered in 1956 and in later balance-of-payments crises—if we do not join them. So I think the old rule of American politics applies:"If you can't beat 'em, join 'em ". That may be a negative reason, and I say this here only because so many noble Lords in this debate have stated the positive reasons, and I fully agree with them.
LORD SLATER: My Lords, I have listened attentively to what the noble Lord, being an ex-diplomat and an Ambassador in various parts of the world, has said. Some of us were at one period delegates to Strasbourg. We have stood on our own feet now for generations, and we have still taken a leading part in the world. It ill becomes anyone to suggest that we are not able at this period in our history to stand on our own feet, but have to join the E.E.C., as now recommended by the noble Lord and others who have taken that stand.
LORD HANKEY: My Lords, we have been standing on our feet only moderately successfully. Unfortunately, it is necessary to face facts. For instance, in 1963, in gross national product per head in O.E.C.D., the United Kingdom came tenth; and in 1969 we were a poor twelfth. If I thought that we could hold
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our position, I should warmly agree with the noble Lord. But I would invite him to look rather critically at the statistics, and, if I may say so, to look at them in a dynamic way. It is the change in our position which unfortunately has converted so many of us to think that we should do well to go in.
I am a Vice-President of the European Institute of Business Administration in Fontainebleau. That is a business school, run on Harvard lines, in English, French and German on the widest European basis. I am interested in this, because I have always felt that if we could get really bright members of British management, even only 20 or 25 a year, trained to the highest standards in English, French and German, and able to operate anywhere in Europe, or in the world, it would in time affect our balance of payments. But what has happened? It is most interesting and significant that the rates of pay offered abroad are so much higher now than the rates of pay offered in this country; and I am sorry to say that the United Kingdom is not getting a fair share of our own graduates. I find this intensely irritating. This is the sort of problem, and the sort of indicator which we now have to face. To put a more positive attitude on it, I would say that, from my experience in O.E.E.C. and O.E.C.D., I am convinced that the British can make a splendid contribution to the Common Market. I believe that we can supply officials of all sorts, and Ministerial guidance at the highest levels, in the Common Market which will be greatly appreciated and render most valuable service to Europe. I 'believe that, for the reasons I have given, we cannot afford to see the Common Market become less successful; that we are in a good position to make it more successful, and this will be particularly valuable for ourselves.
I am more or less a founding father of EFTA, because I was Ambassador in Stockholm when EFTA started. I was very much struck that whereas a great many people expressed all sorts of fears about the awful things that would happen to British industry when we established a Free Trade Area under EFTA, none of those things happened. EFTA was extremely good for our industry; it was an absolute shot in the arm: we were able to demolish the EFTA tariffs years before the end of the transitory period.

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As the noble Lord, Lord Jacques, very rightly mentioned, similar fears were expressed inside the Common Market, and they also were able to do things ahead of schedule. So, my Lords, what is more likely than that, when we throw down the barriers between EFTA and the Common Market, or a good many of the EFTA countries and the Common Market, we shall find a similar shot in the arm given to industries on both sides?
I should like to mention also relations with the less developed countries. Although I am an ardent Commonwealth man, I believe that it is time to recognise that there is a colonial taint about our relationship with a good many of these countries overseas. I believe also that this colonial taint would not apply to the same degree to relations between the Common Market as a whole and the less developed countries. Certainly the East African countries, to which the noble Lord, Lord Jacques, also referred, have not felt that, because they have joined the Yaounde Convention as full members and are at present, I believe, applying preference against British goods and in favour of the Common Market. I say that subject to correction.
I believe that the arrangements which we are making, as explained in the White Paper, will be extremely valuable to large parts of the Commonwealth. I believe that the rate of overseas aid which they will receive will probably be increased. As members of the Council, under the Yaoundé Convention, they will be able to make their wishes heard in a useful way. I personally look forward to a new arrangement in the Mediterranean, where I should have thought that the new Europe might establish a new relationship with the countries of North Africa, which at present are going through a very difficult period.
Then there is the United States of America. In my view, it is essential that the links which we have with the United States should be maintained. I believe that it will be of great advantage to the Common Market if we, with our particular understanding of the United States, were to come into the Common Market and bring those links with us. I believe that this is something that we have to offer and that in time it will be greatly appreciated on both sides of the Atlantic.
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It is important to remember that the United States represents 25 per cent. of the gross national product of the world. The whole of the rest of the O.E.C.D.—that is, all of free Europe, with ourselves and Canada and Japan—represents another 25 per cent. In all, those countries represent 50 per cent. of the gross national product of the world. The growth of world trade and of the trade of the less developed countries does depend in large measure on the understanding across the Atlantic and with those countries. I hope that nothing that happens when we join the Common Market will lead to a weakening of the links inside the developed world, the promotion of which is essential for the further development of the less developed countries.
To sum up, my Lords, I think that now is the time to join. I hope it will be realised that we have to go in when we are not too strong. If we are too strong the Common Market will be afraid of our competition. If we are too weak, the Common Market will be afraid that we shall be a burden on them. The present time, when our economy has a good balance of payments and is beginning to pick up, is, I believe, exactly the right psychological moment for clinching this deal, and I believe that that is what we ought to do. We have been invited to join, and we shall lose all credibility if we do not do so.
After the veto by General de Gaulle in 1963, I went to see that great European, M. Jean Monnet, for whom I have long had a very great regard. He may be regarded as one of the fathers, if not the father, of the European Movement. I said to him,"You realise that this veto will have a very discouraging effect on the European movement in the United Kingdom. What do you think about that?"M. Monnet said,"It really does not matter at all. If the Common Market is a success, the British will join; they always do, if it is not a success, it does not matter anyway." My Lords, it is a success, and we shall join.
8.25 p.m.
LORD GRANVILLE OF EYE: My Lords, I hope that the noble Lord, Lord Hankey, for whose experience and expertise I have the highest regard, will forgive me if I do not seek to controvert some of the arguments that he has been putting forward. I make no apology,

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even at this late hour, for intervening briefly as a Back Bencher in this debate on the European Community, because I think that if ever there was a subject that should be debated by Back Benchers of your Lordships' House, this is the one.
I suppose that to a certain extent the speeches or attitudes of the Front Benches are fairly predictable; the White Paper experts have done their best—or worst—and Parliament is again being asked to back the experts. It has been said historically that the experts, the columnists, the"boffins"and the backroom boys have often been wrong on the big things. It was said they were wrong—as the noble Lord, Lord Boothby, has so often reminded us—about the 1926 gold standard decision; on the 1931 crisis and the advice that was then given; in the advice on Munich and on the recent sterling crisis; in the advice that they gave on India, and the advice that they gave Sir Winston Churchill on the Abdication. So it is said they have almost invariably been wrong when it has come to the really big issues. I am wondering whether, if one looks for the reason, as events have turned out it is because these experts who put forward their advice to the Government of the day seem unable to mobilise sufficient ordinary judgment to understand what public opinion reaction is likely to be to any given policy or any course taken.
On this great issue which has been debated in the Press and now in both Houses, I think what is going to be increasingly important is the attitude, the opinion, and the final judgment of the ordinary people. This is a very adult democracy, and if you look back, in a crisis its judgment on great issues has been absolutely superb. The people have been right. They were right over everything—the Abdication and all the rest of it. If ordinary men and women to-day have very grave doubts about the position, then I think that the Government would be well advised to take due regard of that view, because in the end it is the ordinary people, the man in the street, the voter, the electorate, our democracy, which will eventually decide.
Apart from Gallup Polls and so on, it is difficult to find out what the ordinary men in the street are thinking. I have heard this issue referred to by them
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as"Ted's Folly ". I have heard them say that they think they are being"conned"about this by the experts. It is an extraordinary thing, but if you look back you will find that advisers often tell Prime Ministers what the advisers think they want to hear; and often since the days of the Carlton Club meeting, the fall of Lloyd-George and the break-up of that Coalition, too late they have discovered what the reaction of the man in the street is and what he is really thinking. Whatever is decided by both Houses of Parliament, I firmly believe that in the end public opinion will prevail. In my view, this is the present Government's greatest gamble, and I think that ultimately they will lose out on it so far as public opinion is concerned. I believe that the issue will be finally decided at the next General Election, whenever it may take place.
I ask myself one or two very simple questions about the White Paper and the advice that we have been given. It is, of course, a public relations exercise, and I ask myself a question that the ordinary business man must also be asking himself to-day; namely, can the producers—the labour force, industry, trade and commerce in this country, compete with Germany and Italy here on the home market when the tariffs are gone? Recently in the Press there was a statement regarding the possibility of a reduction of tariffs on motorcars. Immediately the motorcar industry in this country began talking about a crisis. This is a two-way business and it means exporting to the Continent of Europe as well as importing from there, and the Continentals are pastmasters at attracting market consumers. They will be coming into this market in competition with our trade and industry, and we shall not have the protection of a tariff.
So what happens—do we work harder for longer hours, do we become more efficient, get our costs down, improve our marketing and our general efficiency? If, even after that, we are going to lose a fairly large slice of the market to those very astute Continental competitions, what then is the sanction—unemployment? There is another question we have to ask ourselves, my Lords, and that is whether our efficiency is running down. After all, the Continentals had to pick themselves

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up from the floor; they had to build new factories and put in new plant; they had to be efficient to live. But is our efficiency so run down that it would be asking too much for us to be able to compete with them on an equal basis? I also ask myself about overheads, because we shall be facing competition, and it is real competition.
We cannot just wave a magic wand in Brussels. There will be a thousand and one producers competing to sell their products and we have to ask these questions: are our national overhead costs too high; are they higher than our Continental competitors; are we carrying too much fat in our national overheads? If we are, this is another point on which we should find ourselves at a disadvantage. The Germans, the Italians, the Belgians and the French have more experience and are more skilled at what I call"door-step exports ". They have had to teach themselves to be. They design and produce a product and put it on the market, and then they think"Where can we sell this abroad? "
I believe that a number of industrialists are beginning to ask, when examining the implications of the White Paper for the home market here and the Continental market, whether people are going to buy two washing machines where they bought only one before. If not, then they will ask whether we are not going to look rather like the dog with a bone in its mouth looking into the pond—losing the good export trade that we have at present and finding that the market for consumer goods of this kind is not as big as we thought? I believe that our great experience has been in connection with what I call the far-flung exports in the wider markets of the world.
Turning now to the cost of living, nobody seems to understand from the White Paper or Ministerial statements what will happen about this, but the ordinary man in the street does not trust the experts. He seems to have made up his mind that the cost of living is going up still further by a considerable slice. The Government have no mandate to take this gamble: no mandate at all. If there is to be no referendum, and obviously no immediate General Election, if no Select Committee is to be appointed
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to examine the full implications of the White Paper, and if there is not to be a free vote, then both Houses of Parliament are going to take a decision on this vital matter on behalf of the people of this country. I think that if we go in the consequences for our industry could be serious, and they could also be serious for the Government.
I have always believed that vigorous, inspired Commonwealth leadership, even after the war, could have won through, even after the days of Lord Beaverbrook and his Empire Free Trade. I have always believed that a great English-speaking area across the globe was the best opportunity for this country to maintain its security and increase its standard of living; and whether we like it or not, since D-Day we have depended very much upon that other great English speaking nation, the United States of America, which was referred to by the noble Lord, Lord Hankey. We have depended upon them for security, industrial help and credits ever since they foresook their classic position of isolation. I think the tragedy of the Conservative Party, which has always been looked upon as the Party of the Empire, is that somewhere they have lost the vision of the Commonwealth, and—without being offensive—they have replaced it by little tailored technocrats with unit trust minds, who have failed to translate"Empire"into"Commonwealth ". We have been into Europe before. It is our backyard security. But our real security is the automatic deterrent and a close understanding and working arrangement with the United States of America. In conclusion, this Government may take us in: if so, it will not be"Ted's Folly ", as the man in the street has called it, but the responsibility will then rest fairly and squarely on the Houses of Parliament and nowhere else.
8.39 p.m.
LORD ANNAN: My Lords, if I had to sum up the general feeling in the country about the Common Market I would guess that there was some apprehension about the economics of the venture and some warmth for the political aims. The very name"Common Market"suggests a place where you do business, and it is inevitable that when people talk about a market they visualise

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first a balance sheet. Ever since the Corn Laws were repealed this country has enjoyed cheap food, and it is not to be supposed that the benefits which a few large industries may get by our going into Europe will compensate the country as a whole for the loss of all that cheap food.
I do not quite share this sober certainty of waking bliss felt by some of the Marketeers who believe that Britain should enter. It should be a sobering thought that there is scarcely an economist in the country, whatever his political persuasion, who confidently forecasts that there will be immediate benefits. Those who, like myself, support entry to the Market ought to admit that in the very first year the going may be extremely rough and we may run into serious economic trouble. But the truth of the matter seems to me to be not so much that the economists' prognostications are wrong, but that there is no possible way of estimating what the result in economic terms is likely to be. Time and again in business, when a decision has to be taken, it has to be taken on a hunch, however rigorous the analysis of the consequences of taking that decision may have been. I think that the White Paper is perhaps a document more remarkable for its reticence than for its prognostications; but, whatever great play may be made with that, I do not myself see how it could have been otherwise. The real economic justification for entering the Market is that only by entering can we change it; only by belonging can we protect ourselves; and only by being a member can we exercise a veto if our national interests are in peril.
I hope it will be recognised by whatever Government is in power that our national interests must be the lasting criterion when we are in the Market. For the past ten years we have licked the boots of the French, not merely in Europe but in the Middle East and in Africa, for fear that something we said or did would offend them. Only the other day, M. Massigli was reminding us that we must join the Market in good faith and not seek to alter it directly we get in. I sympathise with his point of view when he says that the British must recognise that the agricultural policy is designed to
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protect a class in France, the peasant farmer; because if, suddenly, at a stroke, the peasants' livelihood was made impossible it would throw France into a revolution far more profound than the events of May, 1968. I thought, when he said that, of our own hill farmers in Scotland and in Wales. They, too, need protection. I thought also of the agricultural subsidies which we have been paying for many years since the war to our own farmers with exactly the same intention as the Common Market has towards its farmers.
Nevertheless, we are not going into Europe in a static role, and therefore it may very well be that we shall need to try, as soon as we get in, to modify some of the policies. Just as President de Gaulle changed the market—much, I think, to the detriment of the Six, though perhaps he achieved short-term gains for his own country—so Britain, on entering, has every right to remind the Market what will be our interests; to remind those who will be our fellow members that we, too, have national interests which have to be given consideration. There is one reason why I stress national interest. Political proposals which do not consider national interests are delusory. Europe wanted peace in 1918 and gave birth to the League of Nations, but no-one in that organisation sufficiently faced the fact that national interests would conflict, and as there was no machinery for reconciling them or for minimising the clash, the League collapsed. In the United Nations, again, there is not the faintest pretence that the national interests of its members can be reconciled, but in the European Union that question has been faced, and there is machinery. At the moment the Community is small enough for some kind of a reconciliation of national interests to be made, and the countries in the Union are sufficiently alike in their political, their economic, and their social structures that there is a chance of their agreeing on most questions of broad policy.
Why, then, should we go in? The answer, it seems to me, is the one which has been given repeatedly this afternoon and this evening, and that is that we really have no alternative. If that is a pessimistic answer, or an answer with little enthusiasm, I put it forward because it is

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at any rate one that seems to me to be more truthful than more grandiose suggestions. We know what it is like to stay out. If we do stay out, I believe that we shall stagnate. We shall find it harder and harder to trade within Europe, and less and less easy to withstand European competition and American competition in our former world markets. The day when we can go it alone is past. That is why I sigh when I hear the present Government talking about the reconstruction of an East of Suez policy; but I expect that, as the previous Government discovered, they will find that it is in a real sense impracticable.
I was very relieved when I heard the noble Lord, Lord Carrington, admit that we no longer had the power or the will to police the world. I was much moved by his statement on his own conversion, his realisation, in fact, that we could no longer perform the great imperial tasks as we once had done. We can no longer, I believe, support a sterling area. The other European countries learnt all this the hard way. They learnt it through defeat. They learnt that nationalism, like patriotism, is not enough. We were not defeated in war, and perhaps the hardest thing this country has had to bear is to rid itself of its delusions of victory, of its grandeur, of its legitimate pride in what it achieved between 1939 and 1945. But if we attempt to continue with the idea that we are a World Power, in the sense that there were World Powers before 1939, then I think we shall end in bitterness, in xenophobia, in isolationism. Perhaps the thing which distresses me most about some of those who oppose entry to the Market is the evident isolationism, the evident fear of wider unions which they exhibit.
In our history we have always needed political allies. We have needed them, of course, in the old days, because of the fear of war. As a historian I think of our past as a time when we always needed such allies, and our worst folly—although it may not have seemed so at the time—was to allow ourselves to become isolated between the period of about 1880 and the formation of the Entente Cordiale. Today we need not so much political as economic allies. It is precisely because the Six are an economic alliance that I hope we join them in order
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to become the Ten. I hope that no-one will consider that I am cynical if I say that, if the Treaty of Rome does prove disastrous for us we shall break it and get out. Nations have always repudiated alliances and treaties which have gone sour"on them. There is nothing irrevocable in the step we are taking, but there is, I think, an irrevocability for people of my generation: for my own generation it is irrevocable. We shall certainly be committed, if we enter, for the next 15 years, and possibly for longer. But I am perfectly content to be so committed, for on this issue I follow Pascal in the great passage in which lie asks what line is one to take if one discusses the immortality of the soul, and he ends by saying, "Il faut parier": one must bet. My Lords, I am prepared on this issue to put my stakes on entry.
8.49 p.m.
LORD SELSDON: My Lords, for the past ten years my job has taken me in and out of the countries of Western Europe, and I have worked closely with companies and organisations in all the countries of the Common Market. To someone like myself, who has seen opportunity after opportunity pass us by, it is hard not to feel a little emotion that we are now on the point of making a move that many of us hoped might have been made as long ago as 1961.
I am as convinced now, as I always have been, that we must enter the Common Market. I do not necessarily like, or accept, the argument which is often advanced, that if we do not go in we shall suffer dire consequences, and slide down the slippery slope to economic and political disaster. I prefer, as I believe in general the Government do, to look at the opportunity which we shall place ourselves in a position to seize. In doing this I am swayed far more by what I have seen, heard and felt in the past few years, than by historic or economic arguments, or by facile attempts to quantify something which I personally feel it is impossible to quantify. Thus, I totally welcome the White Paper, not only because I support its views, but also because it has steered clear of quantification and concentrated, in the main, on general opportunity.
There is one are of opportunity upon which the White Paper has touched too

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lightly, and it surprises me that in putting forward a case for entry so little should have been made of the opportunity which exists for our service industries, and it is on this specific area that I should like to concentrate. Too little is said, and has been said, about the significance of invisible exports to this country, and of certain of these invisible exports in particular. In considering our case for entry it is vital that we should give full weight to the pros and cons relating to this sector of our economy. Thus I commend to your Lordships, as others have done, the excellent Report of the Committee on Invisible Exports which was published last week. This Report, in general, seems to give considerable support in favour of our entry.
I should like first to look briefly at the total invisible export picture and then move on to certain service industry aspects of it. Our total credits for invisible exports are over £4,000 million a year. The figure itself does not mean so much, but it is about half that earned by the United States, and about twice as much as that which is earned by France, Germany or Italy. After deducting debts, our net surplus for private invisibles is about £1,400 million; if we deduct the Government transactions, we are left with a total net invisible balance for 1970 of £628 million. Your Lordships will agree that this figure is significant, bearing in mind that our net balance on visible trade is only nominal, and in 1970 was around £3 million.
Of our total invisible receipts only 12 per cent. at present come from the E.E.C. countries; the remaining 88 per cent. come from the rest of the world. The question we must ask is: will our entry into the E.E.C. bring about an increase in our private invisible earnings from members countries, without adversely affecting our earnings from non-members? I am convinced that the answer is, Yes. In particular, I concentrate on that sector known as"other services ", where the major growth potential lies. It would be wrong to ignore sectors such as shipping, civil aviation and travel. In each of these I understand that, although there may be no immediate short-term advantages from entry, the medium and long-term effects should be beneficial. These other services are the most important of all. Together they account for over 25 per cent.
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of all private invisible receipts, and their net earnings are not far short of equalling our total invisible trade surplus.
In these service industries it is important to consider the natural talents of the people of this country. This is an area where such things as trust, confidence, security, efficiency, personality, humour, tolerance, experience, salesmanship, and so on, play an important part, and also we should not forget the significance of the English language. This area, which comprises insurance, banking, merchanting, brokerage, export houses, the professions, advertising, and so on, could show dramatic growth in the E.E.C. Only 2 per cent. of invisible earnings in this sector come from the E.E.C. countries at the present time. Although the Eurodollar situation makes the figure artificially low, to me a low figure indicates an opportunity for growth. Let us look at it this way: in these areas, and in particular those accounted for by the City of London, we have services and expertise which are developed far beyond those of any E.E.C. member. This expertise is already acknowledged on a world basis. A growth of invisible net earnings from around £200 million to over £500 million in five years for Inc City alone bears this out.
There is an emotional factor. The cloud of uncertainty over our entry has held back many of our companies and organisations in this area from an all-out attempt to develop business in the E.E.C. Moreover, many Continental businesses have fought shy of buying services from a non-E.E.C. member whose future is uncertain. Now for the first time the barriers look like coming down, and the opportunity for our services, which has steadily grown as the strength of the countries of the Common Market has increased, will be easier to grasp. It is our expertise in these areas which makes me feel that, far from endangering our current earnings from the rest of the world, it will improve them. As the European experts in these areas or, as some would say, as the world experts in these areas, our entry into the E.E.C. will tend to encourage the outside world to direct more and more of its European business through us, rather than going direct to those markets whose experience and facilities are far more limited than our own.

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But in which areas in particular do we stand to gain? Everyone can have his own opinion. One I take is insurance. In our debate on the previous White Paper I referred to the potential which there is for our insurance industry. I emphasised then, and subsequently, in your Lordships' House the need to make certain that the harmonisation of legislation affecting insurance should not adversely affect our insurance companies or Lloyd's. Our net insurance earnings from the E.E.C. have currently been estimated at around £10 million—which is relatively small if one looks at the potential. If restrictions can be removed totally, or even partially, we should see some dynamic growth. The amount of this growth, and the liberalisation, will, to some extent, depend upon the efforts and pressures of our insurance industry.
Now that our entry looks like being a reality, and attention is being focused upon the opportunity, we shall see greater efforts to develop it in all quarters. The banking area, as I have mentioned, has to some extent been covered by the Eurodollar situation, where our banks have borrowed and paid interest on Eurodollars abroad. This Eurodollar section is significant because of its dramatic growth from about $9 billion to $57 billion in five years, of which it is estimated that we have around half. It is probable that the growth in the Eurodollar market will not go ahead at the same pace. It is maybe in other sectors that the major opportunities appear to lie: for example, dealing in securities, unit trusts, lending, mergers and acquisitions, and so on. Benefits from most of these will, like insurance, be dependent to some extent upon the liberalisation, of legislation, but there can be no doubt that there is a major potentional in that area.
My Lords, our merchant banks, in particular, are unrivalled in Continental Europe. Many, with initiative and drive, have already cornered for themselves lucrative markets for their services, which are gradually being extended to cover a wider and wider range. We have our Stock Exchange which is bigger than all the Bourses in Europe altogether, the commodity market, the Baltic Exchange, and so on. Our entry into the E.E.C. should stimulate investment, focus attention upon the services which we offer, and
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enable us to capitalise even more fully upon the respect and trust we have built up over generations.
9.0 p.m.
LORD WYNNE-JONES: My Lords, I have been present at three debates dealing with the Common Market and have attended each of them, hoping to be able to learn from the speeches made and the arguments used what was the real advantage of joining the Common Market; where we were going to gain; where Europe was going to gain, and where the world is going to gain. It seems to me that we must take all these factors into account when discussing such an important step as going into the Common Market. All my adult life I have been not only a Socialist but also an internationalist. I have always thought that what happens outside this country is at least as important as what happens within this country. And, quite naturally, I have looked at the whole argument concerning the Common Market to see how joining it is going to advance not only ourselves in this country, and our economy, but also Europe—and, indeed, far more than Europe, because we are concerned also with the developing world. It is important that we should remember that the developing world holds the key to what happens in the world in the next twenty-five years. We may think that we are important; we may hope we are. But it is what happens in Africa and in Asia that will determine what happens to the world as a whole.
I have been disappointed to find that in the three debates to which I have so far listened I have not heard, to my way of thinking, a single substantial or valid economic argument. I have heard a great deal of optimism expressed; I have heard an astonishing amount of mythology. But I have not yet found any clear-cut argument—although I will say that to-day three noble Lords have touched on arguments which might have helped. One was the noble Lord, Lord McFadzean, to whose maiden speech I listened with great interest and attention. Then the noble Lord, Lord Sherfield, referred to the examination lie had made among small businesses; and the noble Lord, Lord Annan, also made some remarks which seemed to me to be beginning to touch upon the subject similarly. But still none

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of them came to the point of a clear argument.
I find this astonishing, my Lords, because I have genuinely tried to examine the arguments. I have approached this matter, so far as I can—no one can do so completely—with an open mind. I have come to the question with no preconceived ideas, except that I would rather see international solutions than national solutions, and therefore in one sense I am in favour of the idea of an Economic Community for Europe. But many of the expressions which have been used, not by your Lordships but in other places, have seemed to me quite extraordinary. There have been remarks about"paying the entrance fee to join a club ". Whatever has an association of nations to do with either the Athenaeum or the Carlton Club, or any other club. It is an astonishing use of words, and it suggests that people have the most astonishing ideas about such a union of nations when they refer to it as a"club ".
I have heard certain other strange expressions. I am sorry that the noble Lord, Lord Gladwyn, has had to leave, but he spoke about"a dash for freedom ". What is this strange"dash for freedom"that we make? And he went on to say that if we do not make this dash for freedom we should remain a down-at-heel, offshore island. My Lords, I have become a little weary of hearing noble Lords on the Liberal Benches run down this country and speak about this country as if we were a worn-out old shoe.
SEVERAL NOBLE LORDS: Hear, hear!
LORD BYERS: My Lords, if the noble Lord will allow me to intervene, may I ask whether he cannot see the difference between looking ahead twenty years, as we did twenty years ago, and what is going to happen in another twenty years if we try to"go it alone "?
LORD WYNNE-JONES: My Lords, I am glad that the noble Lord has risen to put that point. I have noticed that the Liberals tend to speak about what happened twenty years ago and use that as an argument for not having progressed in their thought and for remaining to-day where they were twenty years ago. I suggest that it is rather ridiculous to talk to-day about going into the Common Market in the same way as we might
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have spoken about it years ago. For instance, the noble Lord, Lord Boothby, quite emotionally, and I felt quite fairly, spoke about what he wanted to do then; but he did not make the mistake of saying that he wanted to do it in the same way to-day. I suggest that if the Liberals are going to continue in thinking of twenty, or sometimes of a hundred, years ago they will remain in the wilderness for a very long time.
This whole problem of the Common Market seems to me one which is treated with great triviality. It is not treated as I should hope such an important matter would be treated. As I have said, the expressions used seem to me quite extraordinary in dealing with such a problem. But when one comes to the various matters with which we are concerned in this whole problem of a European association, naturally one starts with the economic problem. Here, as my noble friend Lord Soper said earlier, we are given by one side a set of figures, with a gloss on them which seem utterly convincing, and then we read what is said by someone else on the other side and find another set of figures, with another gloss on them; and they are equally convincing. What surprises me is that when comparison is made it is between this country and the average result for the Six—not with individual members of the Six. But, at the same time, when a comparison is made between EFTA and the Economic Community the results for the other members of EFTA are not taken into account; it is always we who are considered.
I have in my hand the latest EFTA publication, the EFTA Bulletin, just published, and it gives the figures for the growth in trade of the members of EFTA—that is, Austria, Denmark, Finland, Norway, Portugal, Sweden, Switzerland and the United Kingdom—and the development in their export trade with the whole of the rest of the world. Over the period 1960 to 1970 all the EFTA countries had an increase in trade of 111·3 per cent., but this country's increase was only 70 per cent. Each one of the separate EFTA countries had a bigger increase in trade than the members of the European Economic Community. We did not. Nevertheless, we are told that EFTA is no good to us. We are told that in some marvellous way—and this is

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where the mythology comes in—if we go into Europe (as it is put) we shall benefit. Why"into Europe"I do not know, because there are only six countries, and there is a lot more of Europe than those six countries. We are told that if we go into Europe we shall benefit. But why have we not benefited—
LORD ROBBINS: My Lords, does the noble Lord attach no significance to the fact that some of the members of EFTA are applying to enter the Community?
LORD WYNNE-JONES: My Lords, certainly. But as the noble Lord knows perfectly well, a country like Denmark or Norway, which is closely allied to us in trade, would find it very awkward if we went in and they did not. It seems to me that his argument is an astonishing one, because those countries are so closely linked to us in trade that they are more or less forced to go in if we go in, otherwise there will be a trade barrier put up against them. I would have hoped that we might get a more serious argument than that.
If one looks at the export trade of this country, one finds that, of our total, 47·1 per cent. is export trade; and of that we find that our trade with Europe as a whole is 8·7 per cent. of our total trade. With Canada, Australia, New Zealand and South Africa (which earlier in the debate we were told could be written off relative to Europe) we have 13·7 per cent. of our trade, as against 8·7 per cent. with Europe; and with the developing countries we have 22·9 per cent. This brings me back to the point where I started, that the developing countries are of extreme importance. They are already of importance to us in our trade, but they are of even greater importance for the future of the world. What will happen when we go into a restrictive community—and for all that is said, the Common Market is a restrictive community, if it were not, what would be the advantage in our going in? It is precisely because there are barriers to trade that we say,"Let us get in under those barriers "—and do so at the expense of the developing countries and at the expense of all the countries with which we have had Commonwealth associations. My Lords, this is indeed perfidious Albion. We are being
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asked to betray not only our own interests but the interests of other countries in order to creep in under this barrier.
We are told that, in addition to the economic side, there are enormous political advantages. I can understand this. I can see that the political argument can be quite a potent one. But we were told by the noble Lord, Lord Gladwyn, that on the contrary there was virtually nothing political about it at all. He said that the Economic Community is purely a Customs Union; it is not really a Community.
SEVERAL NOBLE LORDS: Order!
LORD BYERS: My Lords, the noble Lord is really misrepresenting the noble Lord, Lord Gladwyn, who said exactly the opposite. I read the speech, and I hope that the noble Lord gave the noble Lord, Lord Gladwyn, notice that he was going to attack him in this way.
LORD WYNNE-JONES: My Lords, it is impossible for me, when I speak at this hour, to go and ask the noble Lord, Lord Gladwyn, who is not present in the Chamber, and so far as I know, is not actually in the House. That is not my business.
A NOBLE LORD: Where is he?
LORD WYNNE-JONES: My Lords, if he wishes to come I am quite prepared to wait a moment for him.
A NOBLE LORD: It is misrepresentation.
LORD WYNNE-JONES: My Lords, I would have hoped that the noble Lord, Lord Gladwyn, could take any criticism, although he usually prefers to give it.
LORD BYERS: My Lords, the noble Lord really must get this right. This must go on the Record of Hansard.
SEVERAL NOBLE LORDS: Order!
LORD SHACKLETON: My Lords, is not the noble Lord, Lord Wynne-Jones, going to give way?
LORD WYNNE-JONES: To whom?
LORD SHACKLETON: To Lord Byers.
LORD WYNNE-JONES: No. He does not want to speak.

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My Lords, if we look at this political side we find that at the present time we have a nominal Government of the European Community, but this Government is one which does not, as an elected Government, have any control over the Economic Community. The control is through the Ministers, and through the civil servants who are in Brussels. Those civil servants in Brussels can draw up—and they do it, undoubtedly, with very great skill—all the regulations which control the Community, and then these are either approved or not approved by the Council of Ministers. There is no Parliamentary control. In other words, this so-called political control over the Community does not really exist. It has been stated that the real point of the Community is to have the great advantage of expert techniques brought to bear upon these supranational questions, and it is in this way that the Community is supposed to be effective. This may be a good thing if one is concerned with a dictatorship; it is not a good thing for a democracy.
LORD DONALDSON or KINGS-BRIDGE: My Lords, would the noble Lord allow me to intervene, to clear my mind. I understood that the Commission, as the noble Lord said, put up propositions and that the six Governments, represented by different Ministers, passed judgment on those proposals, and if they are serious proposals, there has to be unanimity. Surely this is, for the Six, not a dictatorship. It seems to me to have the maximum right of veto and the minimum right of dictatorship.
LORD WYNNE-JONES: My Lords, this, of course, is perfectly true, but to me this is not democracy. Democracy does not consist in having Ministers from six nations meeting together and any one of them being allowed to veto something which has been carefully drawn up by the civil servants. There is no Parliamentary control; that is the statement I made. In other words, there is no elected control over the Economic Community. This is not possible because there is no vote on a budget. Therefore, it is not possible to have an effective Parliamentary control. It is just as though in this country we simply allowed everything to be done by a Cabinet with no right of interference by Parliament at all. We would not then, in my opinion, be carrying out
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anything effectively democratic. I do not mean to say that we do not run into periods when we have partial dictatorship, but we still have the paramountcy of Parliament, and that is not present inside the Economic Community.
I have one final strong objection to this country entering into the Economic Community, and that is the regions. The regions of this country—Scotland, Wales, Northern England and the North-West—will undoubtedly all suffer if we go into the Economic Community. It is significant that although many industrialists think, I believe quite erroneously, that they are going to benefit by going into the Economic Community, the shipbuilding industry of Tyneside is firmly against it. Sir John Hunter of Swan Hunter has expressed himself very firmly against going into the Economic Community because he knows it will be bad for our shipbuilding industry, and I believe what will be bad there will be bad throughout all the regions, except possibly the South-East.
9.20 p.m.
VISCOUNT HOOD: My Lords, I put my name down to speak in this debate for two reasons. The first was to stand up and be counted in support of the White Paper and to join in congratulating our team of negotiators on their skill and perseverance. As I see it, this country has belonged to Europe for 2,000 years, and I think it would be most unnatural for us not to join in an enterprise the aim of which is to restore to Europe some part of the unity which it enjoyed in the days of the Roman Empire. I would echo earlier speakers in saying that I believe we have much to bring to the Community, not simply materially but in human terms, our Parliamentary experience and traditions, the good sense and the fair-mindedness of our people. I believe that our presence in the Community will make it not only a stronger but a more reliable force in the world. I believe, too, that the Community will provide us with the broader base that we need in order to make our influence effective and to enable us to make our proper contribution to the peace and security of the world. I am afraid that the noble Lord, Lord Wynne-Jones, may regard those as rather simple arguments, but I find them convincing and I intend

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when the time comes to vote in favour of joining the Community.
My second reason for speaking to-night is to enter the plea that the enlargement of the Community might be made the occasion for an overhaul of other European organisations. In using the term"European organisations"I do not mean NATO nor do I mean the O.E.C.D., both of which have scope and membership extending beyond Europe. I think it was the noble Lord, Lord Thorneycroft, who spoke of the new duties and responsibilities which membership of the Community would place upon this country. I believe he was thinking essentially in terms of industry. I am thinking rather in terms of the new burdens on British legislators, British Ministers, British public servants who will have to attend to the affairs of the Community and the countless meetings in Brussels. It is most important that those duties and responsibilities should be ably and amply fulfilled if in the Community we are to play the full part which we must play in order to reap its benefits.
I believe that the talent, the resources and the time that we can devote to this sort of activity is limited; that in future we ought to give priority to the Community, and that we should use its institutions to the greatest possible extent in maintaining and developing European co-operation not only between the members of the Community, but between them and other European countries. Where another European organisation is composed entirely of members of the enlarged Community, I would see a prima facie case for winding up that organisation and for such activities as seem worth carrying on to be carried on in future as part of the activities of the Community.
A case in point is Western European Union. This provided a most valuable link between the United Kingdom and the Six, so long as we were not a member of the Community. Now that we are inside the Community, I do not believe that we need any such link. In the footnote on page 3, the White Paper reminds us that W.E.U. merged its defence arrangements in NATO long ago. What seems worth considering is whether the remaining arrangements of W.E.U. should not now be merged in the Community. The political consultation and co-ordination of
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foreign policy which had begun in W.E.U. should now be continued and intensified in the enlarged Community, and the small and able secretariat of W.E.U. might serve as the nucleus of the political commission of the Community.
Hardly less important than the development of co-operation between the members of the Community is the development of co-operation between them and other European countries. It may be that no other European country is able or willing to apply for full membership of the Community. But there are many fields—economic, cultural, scientific—where co-operation and, indeed, common European policies might usefully be developed between the members of the Community and other European countries. The White Paper mentions that association agreements and arrangements have already been negotiated with some European countries, and that others are to be negotiated in the future, notably with the members of EFTA who are not becoming full members of the Community. It seems to me that these agreements and arrangements might provide the basis for the wider European co-operation which the noble Lord, Lord Hankey, suggested (and with which I agree) and might be extended even to both sides of the Mediterranean. If provision could be made in those agreements or arrangements for meetings between Ministers and Parliamentarians of the countries concerned, we could then perhaps wind up other separate European organisations like EFTA or even the Council of Europe.
Since we first applied to join the E.E.C. we have been very sensitive to the charge of being bad Europeans. Tactically I think we were probably right to respond to appeals to our European-mindedness, as failure to do so would have discouraged those who were trying to get us into the Community and have provided ammunition for those who were trying to keep us out. But the result has been a multiplicity of organisations and problems. Now I think there is a chance to introduce some economy and some order into what is rather a confusing picture. If we attempt it, do not let us be deterred by the charge that we ale being bad Europeans, because from now on the only true test of our European-mindedness will be the extent and the quality of the contribution we make to

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the life and development of the Community.
9.27 p.m.
LORD ORR-EWING: My Lords, as I understand it, I am speaking 28th in this debate, and if I have kept the score correctly there are 23 in favour of joining the E.E.C., one sitting on the fence (now sitting on the Front Bench), and three against. If one is speaking 28th one has to concentrate the mind on certain facets, and I am going to try to concentrate on live simple facets of the argument: First, the size of the Market and the resultant effects on our industry; secondly, the results in the E.E.C. countries since its formation, and the comparable results in the United Kingdom; thirdly, a brief look at where the militant opposition to the E.E.C. comes from, and to our joining it; then a word on defence; and, lastly, a word on the need for an early and a positive decision.
I turn first to the size of the market, because having been brought up in industry and in technological industry, mainly electronics, I see most vividly that although we, as a nation, have spent more per head of our population on research and development, we have seldom harvested the full results of this effort. I refer in particular to such industries as aerospace, electronics, nuclear engineering, chemical engineering, and the like. I do not wish to concentrate the minds of your Lordships solely on large companies, because I think that the same argument applies to the medium and small-sized companies. None of these companies can continue to spend on research and development on the present scale unless they are afforded a larger market. It not only must be a larger market, but it must be a rich and sophisticated market. I would argue that with our 55 million people we cannot continue to"go it alone "; but as part of a consortium of 270 million people, with a purchasing population at least comparable with, if not greater than, the 205 million people in the United States, we shall have a good chance of maintaining our position and our goods in a competitive position, and certainly of achieving good sales.
I know (and I have heard all these arguments) that whatever criteria you take, someone can take the other criteria. The noble Lord, Lord Wynne-Jones, used
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this argument, and I contend that that is absolutely right. I want to take the four criteria which I believe important. First, the rate of growth of the g.n.p. in the last 10 years, in the Common Market and outside it. I concede that the growth varies between the different countries of the Six but, on the whole, during that period it has averaged something between 4·5 and 6 per cent.
If we look at our growth, we see that it was 2·9 per cent. in the same period, rather less than half that average. If we look at our industrial investment, we find the same sort of figures. We have invested at about half the rate of the Common Market countries. If we look at the growth of our overseas trade, we find that whereas between 1961 and 1968, E.E.C. overseas trade had nearly doubled, ours had risen by only about 50 per cent., half as good as the E.E.C. countries. If we look at real wages, which must determine the prosperity of the nation as a whole, we find that 10 years ago the average industrial earnings in this country were £2 a week more than our opposite numbers in the E.E.C., whereas to-day they are £5 a week less.
I would like noble Lords, when they travel on holiday or on business in Common Market countries, to notice the growth and prosperity compared with the comparatively slight growth in our own standards. I perfectly well acknowledge that there are other variables in this equation—the starting position, the Government of the day, taxation, the welfare schemes which exist here, the dynamic of growth, not only here but all over the world—all these are variables. Not the least variable of the variables are the Treasury advisers, whom various Governments inherit and who seem to me not to be the most dynamic and pro-growth of our 55 million people.
Your Lordships may ask why, if the case is as strong as we try to make out, are there people who oppose it? I have been looking through the history of the Common Market in 1958, and I remember visiting Italy and Germany at that time. It was noticeable that the most militant opposition came from the Communist Parties of Italy and Germany. They have changed their opposition, of course, because the prosperity there now means that there is no advantage for them in being against the Common Market. We

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have to bear in mind that two of our largest trade unions are under Left Wing leadership, that of Mr. Scanlon and Mr. Jones. It can be that they are not typically representative of the millions in those unions or of the trade union movement as a whole.
I was present on May 10, 1967, at the debate in another place (the noble Lord, Lord George-Brown, referred to it in his admirable speech), when the vote was a massive one in favour of negotiation—488 for and 62 against. I found a strange coalition between the Little Englanders on the Right and the Left Wing of the Labour Party. I recall that the Tellers on the one side were Mr. Michael Foot and Mr. Ian Mikardo, and I do not think anyone would say they were in the centre of the political spectrum. One has only to read the Morning Star, which I do assiduously, to see that there is strong opposition in that quarter, but that is perfectly understandable, because the last thing a Communist wishes to see is a strong and united Europe, united in mind and in economic and foreign policies.
This leads me to my next point, which was touched on by the noble Viscount, Lord Hood. I am worried about the whole trend in the defence of Western Europe. Canada has halved her contribution to NATO. On a recent visit to the United States I was appalled to see just how demoralised that nation has become, and how deeply Vietnam has bit into its soul and into the universities. I cannot help feeling that as a result of their Vietnam operation they are in a mind to withdraw their troops not just from the Far East, but to follow that tendency and withdraw before very long from Western Europe. Of course, the argument will be used that they can be brought back in these new, massive C5A transport aircraft, but I cannot also help reflecting that it is troops on the ground that count, and not troops 3,000 miles away, if someone wishes to make a challenge to the stability of Western Europe.
So with this tendency taking place, with Canada already cutting down its contribution and with the United States clearly destined to cut its troops—and they have 300,000 helping in the defence of Western Europe—I see it of supreme importance that we should be a strong and united member of the E.E.C. I know it is said
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—and my noble friend Lord Carrington said it in his opening speech—that Defence is not written into the Treaty of Rome. I acknowledge that. But, surely, if we are united on economic policy, if we are united on political policy, if we are united on foreign policy, we must be more nearly united on defence policy as well; and I believe that it is in this area that we have a considerable and most important part to play.
Lastly, I come to the need for a positive decision. I would say in parenthesis that I hope no members of our Commonwealth will think that by entering Western Europe and the E.E.C. we are turning our back on the Commonwealth. We are merely acknowledging that their trading pattern has changed, is changing, and is going to continue to change. When I have discussed this with my friends in Australia, Canada and elsewhere they have always acknowledged that an economically strong and rich United Kingdom will be of benefit to them just as much as it will be of benefit to us. But I would say that if perhaps our trading ties become less secure, then I hope we shall find ways to strengthen our emotional ties with the Commonwealth. We can do this by an exchange of students and by making it easy for people to take up holiday jobs in both directions, perhaps by having special rates in off-peak periods and using transport aircraft of our air corporations, and even of Transport Command. These are ways by which I think we should seek to strengthen the emotional ties if we are weakening the others. For we must never let it be said that we have turned our back on, and by making a new arrangement are rejecting, the Commonwealth. We are not.
As to the need for an early decision, I believe most sincerely that the opportunity, which it is for us to take perhaps at the end of October, will not occur again. Of all decisions, a decision to stop a slide of prosperity is the most difficult one. If you diminish your wealth or your comparative position or your comparative influence in the world by 2 per cent. per annum, it is very difficult for any Government to say,"Stop! We have gone far enough ". Britain is particularly liable to a sleepiness, and to prefer no change when things are going reasonably well. I think your Lordships will recognise that even in World War II it was not

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until 1940, when the bombs started dropping on London, that the nation girded up its loins and started to work flat out. So I say, do not let us have our position, our influence and our wealth gradually diminished, as it will be if we do not go into the Common Market, because then it will be much harder to make a decision which could jerk us out of any somnolence which may exist.
I believe that E.E.C. entry will jerk industrialists and trade unionists into facing reality, for either our goods are competitive in price, competitive in design, competitive in endurance, competitive in the service which is provided for them, or the United Kingdom is not able to support 55 million people. That is the stark choice between us. Outside the Community I believe we shall slide gently into becoming, over the next few decades, a potato economy, and I cannot believe that your Lordships think that this is the right destiny for Britain. I would advocate the acceptance of these terms. Let us accept this challenge; let us join and use our political, economic, industrial and military wisdom for the good of the Free World.
9.40 p.m.
LORD INCHYRA: My Lords, I apologise for the fact that I doubt whether I shall be able to be here on the Wednesday when the debate is concluded for I have to be in Scotland on that day. I ought also to make this further apology, that in view of all the speeches that have been made and the arguments advanced in favour of joining the Community, it is difficult to find anything fresh to say. However, my justification for adding one more speech to the debate is the fact that I was Permanent Under-Secretary in the Foreign Office in 1961, at the time when the Government decided to make their first application for membership. In that capacity I naturally listened to all the arguments and considerations which were advanced on both sides of the case. I suppose I took part in a good many of the discussions which led up to the final decision, and all I need to say now is that at the end I was convinced that it was to the advantage of this country to make an application to join the Community.
I was convinced of that matter then, 10 years ago, and I am even more con
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vinced now. I must say that in spite of the strength of the economic arguments in favour of joining, which were very, very considerable, it primarily was the political arguments which influenced me. That was perhaps natural because primarily my job was to consider that aspect; but I came to the conclusion that if we wished to maintain and to further British interests, not only economic or financial but our international interests and our defence interests, it was really quite hopeless to think that we could do so alone any more. It was really essential that we should be in the decision-making body; otherwise there was grave risk that matters which concerned us vitally on the economic front, on the political front and perhaps even more on the defence front, would be decided either in our absence or by bodies on which we were not represented or were rather feebly represented. I came to the conclusion that if we wished to carry on as a country which mattered it was essential that we should be on those decision-making bodies and that there was no future for us standing on our own.
I was also influenced by the fact—perhaps I am old-fashioned, but I still feel this—that this country through its history, its traditions and its experience, can make a valuable contribution to world affairs and to the development of the world in general. I felt that if we were to continue to be able to make that contribution we must be in the Six. We should not be able to assert that influence, as we should like to do, alone. Those considerations led me to the conclusion that, on political grounds as well as economic grounds, it was in our interest and in the interests of Europe and the world as a whole that we should join the Six. That was in 1961.
I must admit that I was a convert. Earlier on, I had been of the opinion that we should do better to stay out. In the late 1940s and early 1950s, at the time when the European Movement was just getting under way, it was my view that we should do better to stay out; that we could in some way, thanks to our Commonwealth connections and for other reasons, form some kind of link or balancing factor between Europe on the one hand and the United States on the other.

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I was in very good company in thinking that. I rather think the noble Lord, Lord Carrington, when he opened the debate to-day, said that he too had not been converted to the idea of joining the Six until the comparatively late 'fifties; and even the noble Lord, Lord Gladwyn, admitted that about the middle 'fifties he had similar views. However that may be, it was the considered opinion of Her Majesty's Government at the time that that was the right policy. I remember being sent to give a lecture to the United States War College on the theme, not of concentric circles but of three circles: one in the United States, one in Europe and one in the United Kingdom, in the middle. I am glad to say that my master who instructed me on that occasion, judging by to-day's paper, has now also changed his mind. However that may be it was the opinion of Her Majesty's Government at that time. Fortunately, my audience at the war college paid little attention to what I said, particularly as my lecture was sandwiched between lectures by two very distinguished British Field Marshals.
We were all wrong, and although I have an alibi for the noble Lords, Lord Thorneycroft and Lord Boothby, who spoke earlier, I could not agree more with what they said. I suppose that we were still living in a world of make-believe, thinking that we were in the world before the war. We were hypnotised by the rather special position we had held during the war; we still thought that the Commonwealth meant something rather different from what it did. We still thought that our special relationship with the Unied States put us in a peculiar position. In fact we thought we could still operate as a major Power, as we had done in the 1920s and 1930s. It was not until the late 1950s that it gradually dawned on us—when I say"us"I mean the Government of the day—that that was no longer practical politics.
Our economic situation was gradually deteriorating; our power to exert any influence outside Europe was diminishing. We found that the Commonwealth was evolving in a rather different fashion from what we had perhaps expected, and that we were no longer in a position to operate as we had hoped.
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And for myself I say, advisedly, that it was only after the Suez episode that it dawned completely on me that we were no longer really in the"First Division ". That being so, the problem is how to accommodate ourselves to the new circumstances. In 1961 the Government, rightly, in my view, came to the conclusion that the proper thing to do was to join the Community. If the arguments which applied in 1961 were conclusive then, I think they are even more conclusive now. Not only has our relative economic position deteriorated but our ability to exert any influence outside Europe has diminished, and generally, I should say, regretfully, but I think truthfully, our status has not improved in the last 10 years.
That being so I think it is even more essential than ever that we should not allow ourselves to get into a position where decisions affecting our interests, vital interests, can be taken in places where we are either not represented or cannot exert any adequate influence. The idea of associating ourselves in some way in the countries of North America has been proved to be a non-starter. The Commonwealth is equally not suited to this purpose. In the circumstances, unless we are to remain isolated, I see no alterative but to join the Six.
Unlike some converts, I am not wildly enthusiastic about my new faith. That is not because I do not recognise the great economic benefits, and indeed the great political benefits which we may hope to derive, and which, if we play our cards properly, we shall derive from association with the Six. It is, I am afraid, partially from a feeling of nostalgia: not so much for the days when the map of the world was half red, or when our children's stamp albums were nearly full of stamps bearing Queen Victoria's head, but more from the days of the 'twenties, or the early 'thirties, when we really did have an influence all over the world. Looking back to those days, it is almost inconceivable to think that major events can take place in the Far East, and still more in the Middle East, without our Government being consulted and having a major say in what happens. Naturally, one has the feeling that one would like to get back to that state of affairs. But that is pure emotion and pure sentiment.

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Equally, I must confess that, in spite of all the years that I have spent abroad, in spite of the fact that I am married to a foreigner and that I have a good deal of foreign blood in my veins, I still do not feel terribly akin to foreigners; I still feel somehow that the British are different and that I should like to be able to go on as we were before. That is all wrong; it is a nasty, nationalistic, wrong sentiment; but there it is. However, one has to disregard those feelings: one has to be realistic, and to treat the matter on its merit. To my mind, there can be no doubt that in the interests of this country we should join the Community. But again I say that I am influenced not so much by the benefits that we shall derive from joining the Community, but by what to my mind will certainly be the disastrous result if we do not join.
Finally, my Lords, I may say that I have been careful, for good reason, to keep off economic matters; but, as a Scotsman, and coming from the part of the world that is closely affected by the particular issue, I should like to echo what the noble Lord, Lord Polwarth, said about the importance of hill farming, fisheries, and, above all, regional development planning.
9.53 p.m.
THE MARQUESS OF EXETER: My Lords, I assure your Lordships that I will not keep you long this evening: first, because it is getting late; secondly, there are a number of noble Lords who still want to express their view; and thirdly, I have an horrific historical example before me, because I read the other day that the daughter of an ancestor about 400 years ago married the Lord Oxford on the day when he got out of the Tower, where he had served no less than 20 months for the horrible sin of"prattling too much in Parliament ".
On this occasion, it has been most warming to see that your Lordships' House has gone to just the same heights that one always expects, and as it always has in the past. There has been little cut-and-thrust of Party politics: everybody has been looking on this as one of the greatest historical decisions that we have ever been called upon to make, as it is. A whole lot of points of view have been put, and the subject has been covered from many angles by many
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noble Lords who can do it much better than I can. But there is one angle about which I should like to say a word or two, and it is perhaps, after the height of the debate, rather lower down; that is, the practical angle of commerce and industry, from someone who has spent the last forty years in getting his daily bread in it.
I think that one of our troubles with the public outside is that the anti-Marketeers had the whole of the field to themselves for many months, and they have built up an enormous smoke screen; many minor points were built up into importance, and others were put which will not bear very close analysis. No one could reply because the leaders of all of the Parties naturally had to keep quiet at that time. The reason is that if one wants to get a good bargain the last thing one should do is to appear anxious to obtain that bargain. Undoubtedly the"ante"would have gone up if we had done so. To pierce this fog is what I believe we must do. We have a rather special position in this debate which perhaps we do not always have. I believe that in this fog there are an enormous number of people who really want to get at the basic facts. There are confirmed Marketeers and confirmed anti-Marketeers, and somehow we have to bring home to the middle group the basic facts. Therefore, what goes out from your Lordships' House, where there is not so much Party pressure as there is in another place, will be listened to attentively. That is a very important point.
If we are going to take that line we must give some of the reasons which have brought us to the conclusions we have reached. So far as the industrial world is concerned, one has to bear in mind that it is never static; it is moving all the time, although we may not notice it. New inventions are brought about, new types of engineering, new discoveries of raw materials. There are new trading partners, the quickening of communications, and a hundred other different reasons why it is on the move. How can we keep 55 million people in this tiny country with the only raw material which it possesses, coal, a small amount of iron ore, and half its food? If one goes back in history the original reason must be that we were the first people who were both far-sighted and prepared to take the

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risk to dip our foot into engineering waters. Everyone had to come to us to buy what they wanted, and out of our surplus—and I underline the word"surplus "—we were able to make a great deal of investment overseas.
This position started to alter almost immediately, and in a few decades already other countries had built up their engineering strength—Germany, France, America and others—and the position was changed. Then we came to Ottawa—I remember it well, I was in another place at that time—where we tried to stabilise the position and gave advantages to the Commonwealth to bring in their raw materials; they gave advantages to us to take in our manufactured goods. But that was 40 years ago, and things have not stood still since then. Other factors have come into this question: Canada now has an immense, strongly based industrial economy; Australia has the same; New Zealand has not, and we are happy to see that a satisfactory arrangement has been made for it and also for those countries producing sugar.
Something else has been happening all this time. Simpler forms of engineering products are now being made in other countries. We are inevitably being pushed more and more into sophisticated engineering of two kinds: one is the very difficult kind, electronics and the like; and the other is the mass production units such as motor cars and the like. They offer a very special problem which applies also to smaller industries, and then there is the size of the market. What does it mean in practice? I was chairman of a radar company which sold radar for ten years. It was not unusual to have four years of development before a single unit was sold. Someone had to pay for all those overheads and for the research people over that period. If the motor industry sets up a production line for a new model there is no change out of £15 million. That has to come from somewhere. The only way it can be returned is by the number of units that can be sold and particularly overseas. If one does not sell enough because there is not a large enough market, one might as well not start, because nobody owes the British Lion a livelihood. Three
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things are necessary: the right goods, the right quality and above all, the right price. Unless those attributes are present the goods will not be sold. Any interference from another country, such as a tariff, means that it is harder to sell goods.
When industries have to make up their minds whether they are going for a longer term scheme to try and sell goods overseas profitably, which they have to do, they are going to take all these factors into account. Here is our chance. Here in the industrial world is a potential very wealthy market of 300 million people, when we are all in. Surely it must be right to go in. Here is a Market without tariffs or any other interference. To take the other argument to the other extreme, would the United States really suggest that they would be more prosperous if they had tariff barriers between North and South Carolina, and between all the different States?
It must be right to go into a big market if we are imbued, as I know we are, with the same spirit as we have always shown in the past. We have this tiresome habit of belittling our performance. We have some of the best inventive geniuses in the world; we have some of the best management staff in the world, and we have some splendid people working on the benches. On the shop floor we have a huge advantage over many countries, because for generations the men have been used to working in that environment and within engineering limits, so that it comes as second nature. We have these advantages, and it is up to us whether we make use of them or not. I cannot believe, looking at all these advantages, that anybody could conceivably say,"Keep out ". If we did, all the world would say,"They are too frightened, and all they are doing is looking back in nostalgia on what happened years ago ".
My Lords, I hope that when the time comes in October we shall grasp this; that we shall go into the Common Market. And, meantime, I think that a clarion call should go out from your Lordships' House explaining the basic facts and pointing out that we are not thinking just of ourselves, but of our children and of our grandchildren for the years ahead. We have it in our

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power to harm them or to bring them prosperity, with a real voice in world affairs. I feel that if we are once more brought back to the understanding that
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these are the real principles at stake, we need have no fear but that the majority of the populace will, when the time comes, approve our entry.
10.2 p.m.
BARONESS SHARP: My Lords, the noble Lord, Lord Carrington, said at the beginning of this debate, that he did not really think that there could be anything new to say. It seemed, however, that over 100 Peers had taken a different view. I do not take a different view. I was quite sure before the debate started that, as far as I am concerned there is nothing whatever new to say, and I am more sure than ever about that now. I have no special knowledge, nor am I particularly well informed; but in this I am representative of the millions of people in this country outside Westminster and Whitehall who are now beginning to try to make up their minds about the issue before us. What I should like to try to do this evening is to say very briefly how it seems to me that the argument is beginning to present itself to ordinary people up and down the country. They certainly are beginning to think about it. The opinion polls suggest that, and there was one tiny incident two or three days ago, which occurred in the little shop in my small village. While I was buying groceries the man suddenly looked up in the middle of wrapping them and, apropos of absolutely nothing—unless it was the butter—said,"I think we've got to go in, don't you?"Nobody had mentioned the Common Market or anything to do with it. He was a little anxious and worried and he had been thinking about it and had arrived at this conclusion.
My Lords, I do think we have to go in. I have indeed thought so ever since the Economic Community was first started; but up till recently I had thought it from a rather emotional or, perhaps I might call it, a political point of view. It is only now, when the conditions are agreed and the debate has begun, that I have started to try to rationalise why it is that I want to go in and whether it is really the right decision—this is the mental process that millions of people are putting themselves through now over the country.
It seems to me, as I think to most of us, that two things clearly emerge. One is that it is now or never—that is to say, never within a foreseeable period of time. It is nonsense to suppose that if we reject this opportunity now we can, in a few years' time, when some of the arrange
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ments in the Community may have changed, when our position may be stronger, when we may have a different Government, take this up again; and that the countries of the Community would then be prepared to consider an application from us. I feel sure that this situation is generally understood in the country, and this is why people are saying,"We must make up our minds."
The other thing which seems to emerge clearly is that the argument is not about the terms of entry. I could not answer an examination on the terms that have been agreed, still less on the Treaty of Rome. But I am entirely persuaded by the arguments that have been put forward that the terms we have now been offered are as good, by and large, as we could ever hope to get, and are acceptable by us without disaster. I do not think the argument is about terms; the argument is simply: do we want to join or not? We have to decide now.
As has emerged clearly during the course of our debate, the argument has two main strands. The first is the economic argument. We all understand that food prices will go up and that we shall lose the advantages of Commonwealth preferences and cheap food. Against this we hope that we shall get the opportunity of earning a substantially better livelihood in the great market of Europe. As has been said in this debate by people who know a great deal more than I, we cannot be sure how this will go; we cannot put a figure to it.
No doubt in the first few years we shall have a rough time, and no doubt any Government responsible for making the final decision will have a rough time. Nevertheless, we all can see that here are great opportunities. And we ask if we reject this opportunity what is the alternative? We do not want to stay where we are—I think we are all pretty clear about that. It seems to me that the opponents of entry have never made clear their alternative suggestion to entering Europe. What makes them think that if we stay as we are, outside the Market, we can do substantially better?
What is our situation? We all know it. It is slow growth and, above all, a low-wage economy. What has struck

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me for years, perhaps because of my long connection with housing, is what a depressingly low-wage economy we have. We have to recognise that millions of people in this country, in good, steady jobs, cannot afford a house without having a subsidy handed out to them. What a miserable situation! We all feel that this is a situation that we desperately want to get out of; and we ought to be able to get out of it. As has been said in the course of this debate, we have great confidence in our ability to earn a good livelihood. Somehow we have not managed to do it; somehow we are not competitive in Europe; indeed, we have not had the chance of being competitive in Europe. This is how the economic argument presents itself to us. Of course it is a risk, but it is better than staying where we are. If it is a risk, it is also a chance. My Lords, let us take the chance.
The other argument is of course the political argument. I must confess that on the political side I myself have for many years wanted to see a more united Europe. It seems to me that our only hope in this country of a more civilised life in future is a more united Europe. I remember, in the early days of the war, agreeing with a number of friends that the one thing I hoped we would manage after the war would be somehow to reach an agreement among the countries of Western Europe on certain basic human rights: on freedom within the law, on certain personal liberties—the things we had seen so appallingly ignored and destroyed in countries of Europe and which were really at the basis of the war.
After all, in Western Europe, in spite of all our differences of law and of custom and of methods of government, and in spite of all the crimes that have disfigured our history for so long, we have a common tradition, a common culture, common ideals. We have the possibility of agreement among ourselves on respect for personal liberty; the kind of liberty we in this country have secured and in which most of the countries of Europe believe we can agree to on respect for democratic forms of government. This perhaps is not germane to the Economic Community, yet this to me has always been the vision. Noble Lords have spoken tonight about their visions of a future Europe. This is more. It may
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not be germane to the Economic Community, yet the Community is the first great step along the road towards some kind of unity in Europe which may one day lead to some kind of agreement, perhaps even an agreement that we were all prepared to enforce, on respect for basic human rights. That, my Lords, at the bottom of it, is why, above all, I want to see us join Europe, although I will accept that there is no possibility of our joining the Community unless the economic arguments are right. But at this stage I believe that they are.
10.13 p.m.
THE EARL OF SELKIRK: My Lords, it is always a great pleasure to follow the noble Baroness, Lady Sharp. My only regret is that the noble Baroness does not speak to us more frequently in this House. I know that her presence would always be greatly welcomed.
I am very glad that the Government have postponed a decision on this subject, because public opinion has quite a long way to go yet in accepting the policies which the Government have put forward. The situation is not eased by the political shadows which hang over our heads on this general topic. We have had an interesting debate in which the speakers have been something like 10 to 1 in favour of the Government's policy, relieved by a certain euphoria (shall I say?) from the noble Lord, Lord Wynne-Jones, and the noble Lord, Lord Granville of Eye, who have fortunately given a slightly different point of view. I think this is wise. But if I may say so to the Government, although they have won the Parliamentary debate, they have quite a long way to go yet to win the public debate, and it is that which I am going to ask them, if they will, to give rather fuller attention to. My noble friend Lord Thorneycroft said it is of the utmost importance that the nation, and not simply Parliament, should recognise that we are going into the Community.
When Mr. Macmillan put forward his proposals in 1962 I was in Singapore and I was a little surprised, I must admit, at what I understood to be the agreement of commerce, industry, the professions and the trade unions; they all seemed perfectly willing to join. Today, as I read it, the situation is rather

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different, for good or for bad, and I think one of the reasons is that the country has understood, or begun to understand, some of the implications, and is a little disturbed at what it sees. I wonder whether the Government can give us a little fuller understanding of what they have in mind.
First, there is the Treaty of Rome, an immensely complex document, and really nobody can say what the implications of it are. I would be grateful if the noble Marquess could say what are the limitations of the implications. Various documents come to me from time to time: some of them speak of a full union of the nations of Europe. I do not suppose for a moment that the Government can tell us the full position, but let us hear something of it. You can argue, if you like, that the document is not perhaps anti-British. But it certainly completely ignores any British interest at all. Much of this has been alleviated by the very able negotiations on the part of the Chancellor of the Duchy—I accept that entirely—but none the less the implications of the Treaty leave a certain inclination.
I find it hard to understand how he can readily accept the Common Agricultural Policy without comment.
LORD BESWICK: Hear, hear!
THE EARL OF SELKIRK: My Lords, I do not think the price of butter, or even New Zealand, is what matters, but basically, from a world point of view, it is a thoroughly bad economic policy. It is encouraging high cost agriculture and discouraging low cost agriculture. In the long run that is bad, and I would very much hope that the Government would try to find ways and means of putting this on a better basis. I suggest straightaway that they should endeavour to reduce the level of duty which the Common Agricultural Policy imposes. I personally doubt whether any such policy would be ever likely to work for the whole of Europe. It is not dead easy to have a Common Agricultural Policy for this country alone.
Another point is that the form of Government which is suggested is very highly geared. It will inevitably be rather in
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sensitive to the opinions which are expressed to it. This may not matter very much, but it will mean that our opinions will be much less sensitive to opinions expressed in other countries. As to the normal Government—if I may say to the Front Bench here, which is a normal Government—sometimes we regard them as being rather insensitive to proposals put forward. I may say that other Governments have also been insensitive to proposals which have been put forward from time to time. Perhaps I may take the case of fisheries, which have been discussed here today. I should have thought anybody knows that if you do not preserve fishing you will destroy it. Yet as far as I can see the Council of Ministers took no immediate action on this. I am only suggesting this as an example, and maybe it will eventually be borne home to them that this is a matter upon which action must be taken.
My Lords, I am sometimes disturbed by the statements which are made by very keen supporters of the Party. The noble Lord, Lord Wynne-Jones, mentioned one or two, and I will give him a couple more, if he is interested. If you want to know the country whose gross national product has increased most in the last 10 years, it is Denmark; and if you want to know the country with the greatest per capita contribution to gross national product, it is Sweden. These are countries outside the Common Market. One can go on quoting these until"the cows come home ", I quite agree.
Again, on the subject of sovereignty, which I understand the noble and learned Lord the Lord Chancellor will deal with tomorrow: we have had all sorts of statements about sovereignty. Sometimes it does not matter, sometimes we have lost it already, sometimes it is only a small matter and of no great concern. I would only say that my recollection of studying sovereignty was that no one could ever find where it was. They looked about the country to find whether it was here or whether it was there. Sovereignty seems to me to be where recognised authority is, and my anxiety is whether the authority of the Commission will be recognised. This seems to me to be very important indeed. It is no good setting up an authority unless in fact it is recognised.

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My Lords, I have no doubt at all that we are going into Europe. Indeed, in my opinion if we did not go in the evils would be very great indeed. We have gone too far along this course, and we should do a great deal of damage to many people besides ourselves if we did not go in. I think we should ask the Government whether they can tell us a little of what they are going to do when they do go in. I do not take quite so easily as the noble Lord, Lord Orr-Ewing, the position of the Commonwealth. I believe the bilateral arrangements in the Commonwealth will remain, but we should think very hard whether as an institution it is going to have a very long term future. This is one of the prices we pay, and we must not delude ourselves into thinking anything else. I think we can do something to ensure that members of the Commonwealth are more securely associated with the European Community if we go into it.
We have tried the Commonwealth, a free association of nations, without binding any of them, and I am afraid we must say it did not work. We are now going into an association where we contemplate majority decisions. It may be that this is right; but it is taking risks which I think we must recognise. And we are doing this in a community in which we have no common language, no common loyalty and no common fear—the basis of most human societies, I regret to say, but this is the case. Of course we have geographical association. But if it is to mean anything at all, this means that we must cultivate the habit of working together, and for this we require the highest qualities we can produce in this country.
I say one more thing. It is sometimes a common fault to load international organisations with greater duties than they can perform; we may expect too much of them. I think it would be a great mistake. This growth, if it is to be worth anything, must come very slowly indeed, and if we do too much with it I think we shall make a great mistake. I hope we shall try to find ways and means of associating ourselves not only with the African countries, of which the Community think a great deal, but also with the Asian countries, not least with Hong Kong, to which I feel a great sense
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of responsibility. Let us not forget, either, that the centre of world population is South-East Asia. There, half the population of the world lives: the ablest and most vigorous section, in many ways, of the whole human race. Do not let us cut ourselves off from this area of far-reaching importance. We have drawn EFTA in. It is our task to see that they have a reasonable chance of associating, possibly by special treaty, with the European Economic Community. I say, with respect, that we have a very close relation with those countries and we should see that something is worked out.
The noble Lord, Lord Hankey, referred to the United States of America. Let us not run the risk of any form of trade war. Here we have a very special duty. I should like to say one other word on regional policy. The White Paper is often very thin on this matter, to which a great many people, certainly in Scotland, attach the utmost importance. The noble Lord, Lord Polwarth, referred to it with great force. I would emphasise the absolute necessity of air communications with the outlying parts of this Island if they are not to become derelict areas. This aspect has been grossly neglected up to the present time. It is a strange fact that employment always seems better near the capital towns. In Dublin there is no unemployment it is so different in Belfast. In most places the capital seems to collect employment.
I feel a little like the noble Lord, Lord Inchyra. I cannot say that I am immensely enthusiastic, but I believe that this is a task well worth while. I remember that when I first went to France there were octrois outside almost every town. This has disappeared. I remember living with French and German families, and each of them said how happy they were to see the Communists succeeding in the other countries. Those are days of the past. We must play our part and see that France and Germany continue the association which they now have.
10.25 p.m.
LORD TANGLEY: My Lords, for the first time in my life, I feel quite certain that your Lordships will be pleased to see me on my feet. You can now take up your pencils, strike out No. 35 and say,"That's the lot ", except of course for the

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reply of the noble Marquess, Lord Lothian. I am one of those lucky people whom I thought the noble Lord, Lord Carrington, envied a little, in this respect: that I have been a convinced believer for twenty years, and an active worker in my limited field towards a European Community for at least ten years. I think the noble Lord was a little envious of people who could claim that sort of record, and I can. Therefore, what I have to say to your Lordships must be slightly in the nature of a confessio fidei. But I am not going to take you over the whole ground of my faith, and I am not going to weary you at this time of night by talking about all the points which I believe give reason and rational ground for my faith. I shall confine myself, if I may, to three points.
The first is this. I do so agree with noble Lords who have scouted the idea that we are a feeble and effete country that cannot stand on its own feet. We are not feeble suppliants for admission to the European Economic Community. It is certainly not for us to creep or crawl under the protection of some Common Market network. The plain fact is that we are a very rich and still powerful nation. We have given great gifts to the world, and I believe that we have still greater gifts to give to the world. We founded a great Commonwealth of nations, and we were so mature in our thought that we have actually had the courage to go through the process of handing it over to the component countries, as and when they were able to assume that responsibility. That is something which had never before happened in the world; but we have done it and it is something of which we ought to be proud. We have created prosperity such as the world had never known before. We have carried through a social revolution by entirely peaceful and constitutional means. In discussing this subject and thinking what we should do, I believe we may hold our heads high.
But while we do that, let us also remind ourselves that the foundation of all these achievements lies in one absolutely ineluctable truth. We hold our position on one condition; that is, that we export enough services and manufactured goods to exchange for the necessary raw materials and food. If we cannot do that,
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we cannot do any of the other things to which I have referred. We cannot sustain our employment. We cannot sustain our standard of living. We cannot sustain our political or domestic stability. We can be of no use to NATO, of no use to our American friends and allies, of no use to Europe, of no use to the Commonwealth and of no use to the rest of the world.
With that overmastering fact in mind, should we not look at the common markets that already exist to-day? The United States has a common market of about 250 million people, with freedom of exchange of goods and services within it, and a moderate tariff around it. Europe already has a common market of some 250 million people, with freedom of movement of goods and services within it, and a protective tariff around it. Behind the Iron Curtain there is a common market of uncounted millions, controlled and directed from Moscow. In this country there is a common market of some 50 million. Unfortunately there is not, and there never can be, a Commonwealth common market, for reasons which noble Lords have already laid before the House to-day, and with which we are perfectly familiar.
We are now offered the opportunity of joining our common market of 50 million people with the existing European Common Market of about 250 million. Within a measurable space of time goods and services will move freely throughout the whole area, with only a moderate tariff barrier around it—a tariff barrier, let us not forget, which we shall be well able, with our overseas interests, to influence in the direction of freer trade with the other common markets I have mentioned. This is a crucial question: shall we find a better market for our exports, on which everything depends, if we go in, or if we stay out? That seems to me the really crucial question on the economic side of things. But this question far transcends purely economic considerations. I do not like the contrast between economic and political considerations (although I know it is difficult to avoid, and very few noble Lords have managed to avoid it to-day), but the economic situation is only part of the picture.
Sometimes—and several times to-day—I have heard noble Lords say that the question is,"Shall we enter Europe ".

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With great respect, that is not the question. We are part of Europe. As the noble Viscount, Lord Hood, said, we have been a part of Europe for 2,000 years. I was very interested in one of the quieter asides of the speech of the noble Lord, Lord George-Brown, when I heard him make the same point, that we are a part of Europe. We have been a part of Europe throughout all our history. There is no need to go so far back as the Roman Empire, 2,000 years, as was suggested by the noble Viscount, Lord Hood. There is no need even to go so far back as Charlemagne. Of course, Englishmen were his civil servants; an Englishman crowned him in Germany. We need not go back as far as that. All we need to do is to remember that ever since the mediaeval system broke up, and the national States became independent national sovereign States, we have been in a state of perpetual war in or about Europe. It is true that many of our wars have extended throughout the world. Each war has seemed to extend further, and to be more intense on the periphery. Many of our wars have been fought up and down the Spanish Main, the East Indies and the West Indies, the African coast and the sea, and elsewhere; but they have all been fought for the balance of power in Europe. It is no coincidence that the greatest number of millions of our dead lie buried in Flanders fields, the cockpit of Europe.
The growth of nationalism was a great disaster in many ways. We have exported not only many of the good things, we have exported war. After the last Great War there was a great vacuum of power in Europe; a great gap to be filled. It could not be left empty, and an attempt was made to fill that gap by creating the appropriate organisation or organisations to fill it. One of those organisations is the European Economic Community. The question before us, and the question before the nation, is really this, is it not: dare we stand out from playing our part in the construction and working of that new mechanism, which is so absolutely necessary? I am sure that, put in that way, the answer is quite obvious.
The third point I want to touch on—it is my final point—is the question of
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sovereignty. Here I invite correction from the noble and learned Lord who sits on the Woolsack. I do not always invite correction from that source, but on this occasion I do. I think that a great deal of unnecessary mystery is made of this question of sovereignty. I do not believe that there is any authoritative legal definition of what sovereignty is, but I think we all know what it is. A State is recognised to be a sovereign State when it is capable of conducting government internally and capable also of conducting relationships on behalf of its people with other sovereign States.
An analogy may be helpful. Sovereignty is to a nation what personality is to an individual. He can take a general pattern and view of life. He can take the view that he will choose by himself, do his own thinking. He will not restrict the exercise of his personality in the interests of other people. If he does that, of course, he would never enter into partnership with anybody. That would be folly. He should not commit the ultimate folly of getting married. Both those relationships involve restriction on the use of his own personality and on the exercise of it. But both relationships are entered into constantly, because everybody knows that in fact they enlarge the individual's scope of action, they enlarge his personality and his general power over life. That, I think, is what sovereignty does for a nation. It is not something to be hidden in the earth, but something to be used, something to be exercised. If we go into this Treaty of Rome, it will certainly be an act of sovereignty. It will take effect by virtue of an Act of Parliament. As the noble Lord, Lord Annan, said earlier, an Act of Parliament can be repealed by a subsequent Parliament, though I think that it would be an act of wickedness to go into this arrangement with any such get-out in mind. The Treaty itself contains ample provision for ensuring that national interests are not going to be over-ridden by Community organisations.
I summarise my three points in this way. First of all, we must take advantage of this vast market which will be open to us. Secondly, we must take part in the organisation of the necessary machinery which is to take the place of the vacuum created in Europe. Thirdly,

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we need have no worry that we are going to lose our sovereignty in the process. We ought to do it. We can do it. Let us do it.
10.40 p.m.
THE MARQUESS OF LOTHIAN: My Lords, we have come to the end of the first day of what I feel sure most noble Lords may well consider to be the most important debate that your Lordships have held for a great many years. I think the House will entirely agree that we have had many notable and thoughtful speeches today; and I should like to echo the tributes that have been paid, particularly to the two maiden speakers, my noble friend Lord McFadzean and the noble Lord, Lord Burgh, who, in very different types of speeches, I think your Lordships will agree contributed remarkably to the discussion that we have been having since 3 o'clock this afternoon. Of course, there have been a great many other speeches today—another 33—and I think it would be invidious if I were to pick out one from the other. But the fact that there have been so many is indicative, I think, of the very deep feeling which Members of your Lordships' House have on this, to my mind, most important topic. My rough tally at the end of the first day, my Lords, is that, of the speakers, 28 have been in favour, three have been against and one has been a little uncertain. It will be interesting to see what the score is tomorrow evening.
Now I do not want to be too long this evening, and I shall try to answer some of the points that your Lordships have raised today, but the House will realise, of course, that my noble friends who will be following me at this Box in the next two days will also be dealing with some of the points which I shall not have the time to cover tonight. In particular, I think I might inform your Lordships that my noble friend Lord Jellicoe, the Leader of the House, will be dealing with the financial matters concerning the Community and our contributions, capital movements, et cetera, and my noble friend Lady Tweedsmuir will be dealing with regional policies and the Common Agricultural Policy, and with matters affecting the housewife. I should like, if I may, to concentrate briefly on one
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or two matters concerning the Commonwealth, because various noble Lords have asked me questions about this, or have made comments about it, and I should like to take up a little of your Lordships' time in dealing with it.
I think it is common knowledge that many of the negotiations have been concerned with questions affecting different members of the Commonwealth, and I think it right, in a few minutes, to say a little more about the two matters which have aroused the greatest potential difficulty in the negotiations; that is to say, New Zealand and the question of sugar. But, my Lords, it should not be forgotten that we have also been able to achieve satisfactory arrangements of various kinds for an enormous number of other Commonwealth countries. The facts with regard to this are, of course, set out in the White Paper, and I think I need only remind your Lordships of the main outline. For instance, the offer of one of two kinds of association agreement or of a simpler trading agreement for which 20—no less—Commonwealth countries will be eligible. These countries will have until January 31, 1975, to make up their minds, which I hope the House will agree is a considerable period of time and which I trust will be sufficient. Until then, my Lords, present trading arrangements between us and these countries can be maintained.
Again, all British dependent territories, with the exception of Gibraltar and Hong Kong, for which special arrangements have been made, will be offered association under Part IV of the Treaty of Rome. What this means—and I think it is right that we should recognise it—is that the Commonwealth as a whole can—
LORD SHEPHERD: My Lords, the noble Marquess mentioned special arrangements for Hong Kong. Can he say what they are?
THE MARQUESS OF LOTHIAN: Yes, my Lords; the arrangements for Hong Kong will mean that Hong Kong is included within the generalised preference system of the Community, with certain exceptions.
What I think is true to say is that the Commonwealth as a whole can, we believe, expect to gain rather than lose

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from British entry; because even without us the Six has proved to be over the past few years an enormous force of attraction in world trade. For example, a number of Commonwealth countries—I need only mention Kenya, Tanzania, Uganda. Cyprus and Malta—have already moved towards some sort of commercial association. If Britain stayed out of the Community, there would almost certainly be a growing conflict between the different countries' needs for increased trade with the Six, on the one hand, and with Britain, on the other. With Britain in the Community, this conflict need not arise.
In the case of the developing countries, there is every prospect of trade with the enlarged Community increasing. Moreover, all the countries of the Commonwealth, I believe, stand to gain from this country's growing prosperity and influence—which we shall achieve only if we seize the opportunity offered by membership of the Community. Only then will it really be possible for the countries of the Commonwealth to continue looking to this country for first class educational and training facilities. This is the point touched on by the noble Lord, Lord Orr-Ewing. It is ties of this kind, quite as much as, if not more than, trade patterns which are increasingly bound to change which will, I believe, bind the Commonwealth more securely together. Surely a Britain which is excluded from the centre of affairs in Europe, on the edge of a flourishing Continent would not be able for long to continue to help the countries of the Commonwealth in the way that we have in the past.
My Lords, a word about New Zealand. This is a subject which has been raised quite frequently this afternoon. It is a matter of satisfaction that the New Zealand Government have publicly made clear their belief that not only are the terms the best we could have achieved but also a good deal better than it looked as if we were going to get a fairly short time before. This is the consensus of informed opinion in New Zealand and among many observers and experts who have been following every move carefully in these negotiations. Moreover, New Zealand Ministers have generously paid tribute to the support for the interests of their country which our Parliament, the British Press and the British
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people have shown. I think it is a matter of satisfaction that the New Zealand Government have been able to feel that we have done our best for them.
On sugar, the agreement reached on sugar imports from the developing Commonwealth sugar countries is set out in the White Paper; and here we find the text of the statement issued after consultations with the sugar-producing countries in London on June 2 and 3, which shows that, like the British Government, the other Commonwealth Governments concerned regard the Community offer as a firm assurance of a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement. I think that this is the answer to any criticism that has been made. I am not suggesting that there has been any criticism made this afternoon in this House but we have heard of it from elsewhere. It is the same in the case of New Zealand. I think we must agree that it would be perhaps out of place now for people in this country to say that they know what is good for the sovereign and independent Commonwealth countries concerned better than the Governments of those countries themselves.
My Lords, as I have already made clear, in dealing with other Commonwealth issues, this political guarantee on sugar was accompanied by an offer from a choice of forms of association or a trading agreement for the developing Commonwealth sugar producers. This means that if the Commonwealth countries concerned choose to take one of the options open to them they will have special links with the enlarged Community. I think it will be agreed that the Community has an excellent record of looking after its own, and we see no reason why an enlarged Community should not equally maintain policies helpful to the developing world in general and its associates in particular. Perhaps I might now turn for a brief moment to fish. I think the noble Lord, Lord Boothby—
LORD SHEPHERD: My Lords, I put a specific point to the noble Marquess. Can he give an assurance that there will be adequate refining facilities for cane sugar in the near future?
THE MARQUESS OF LOTHIAN: My Lords, I can tell the noble Lord that the refining interests have expressed satisfaction with the situation and the position reached in the negotiations. I hope that the noble Lord, Lord Shepherd, will feel that that is satisfactory, because I think they themselves must know what they want and what they will have.
Perhaps I may now say a word or two about fish, because I know that this is something which is worrying noble Lords, and indeed any Scotsman must worry about it perhaps more than others. Perhaps I may just put the situation as it is at the moment, because I think it right that this should be made clear at this stage. No agreement has yet been reached, but, as the White Paper makes clear.
" the Government are determined to secure arrangements which will be fair throughout the enlarged Community and will satisfactorily safeguard the interests of British fishermen ".
That is a firm commitment. What happened during the negotiations was this. We proposed a six-mile limit measured from the usual base lines as a fair and reasonable solution for the whole of the enlarged Community. Within that limit fishing would be reserved for vessels genuinely belonging to the ports from which those waters are now being fished. This proposal is based on the principles of the European Fishing Convention 1964, to which the noble Lord, Lord Boothby, made reference, which was adopted both by us and by the Six, by Denmark and the Irish Republic for their Atlantic and North Sea coasts. It specifically envisaged, first, a special régime for the members of the Community. This proposal remains on the table and we regard it as a reasonable basis for a permanent régime which would be equitable for all parties.
At the Ministerial meeting on June 21 and 22, the Community recognised that the access provisions of the Common Fisheries Policy would need reconsideration and further negotiation, so discussion was taken up again at the following Ministerial meeting on July 12 and 13, which was the last Ministerial meeting held so far. Not all the applicant countries were present at that meeting and it was therefore not possible to seek to reconcile their different approaches to the problem, and it became clear that
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more time was needed. We therefore proposed that there should be an interim agreement to maintain the status quo unless a permanent agreement could be reached in time to be embodied in the Treaty of Accession. Under the interim agreement, the applicant countries would be able to retain their existing regimes until a final agreement could be reached after enlargement. This would avoid the difficulty for applicant countries of coming to individual agreements without knowing the régime for the enlarged Community as a whole.
The Six took note of this proposal and are now studying it in greater depth. It is hoped that it will be—in fact it will be—taken up again in the autumn. The Government feel convinced that to get a worth while and satisfactory solution it is important to have the time to do so. But I should like to assure noble Lords who are anxious about this that the Government are very much seized of the problems and anxieties of the fishermen in this regard; and, as I say, they are determined to find a solution which will be satisfactory to them.
My Lords, I have been asked one or two question which I might deal with quite briefly. The noble Lord, Lord Teynham, I think it was, raised the question of the free movement of labour and the matter of the Immigration Bill. I am not certain whether the noble Lord was here the other night when the Committee was discussing this point about Commonwealth immigration as opposed to E.E.C. imigration, but the Government are considering the matter carefully, and it is something which will be brought up again during the Report stage of the Immigration Bill in the autumn. The noble Lord also mentioned the question of food prices, but I think I will let my noble friend Lady Tweedsmuir of Belhelvie tackle that subject to-morrow—she knows how these things affect the housewives.
I am sorry that the noble Lord, Lord Wynne-Jones, poured such cold water on the whole conception of the E.E.C. He mentioned the fact of the growth of EFTA being greater than that of E.E.C. countries—and this was a point, I think, which my noble friend Lord Selkirk confirmed. I think the reason for this is that some of the small EFTA countries, like Denmark, when suddenly presented with

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a much larger market at the conclusion of the EFTA Agreement, naturally took advantage of it. In the same way, this is something that we in this country would hope to benefit from when we accede to the Community.
I have taken up much of your Lordships' time, and perhaps I can finally deal with one or two general implications of British entry into the Community. First, I think this point needs emphasising. There is no question, my Lords, of membership meaning that our connections with the Commonwealth, and indeed our long-standing interest in countries all over the world—our ties, connections and common language with countries overseas whose stock originally came from these Islands—are forgotten, and that this country can become a country whose horizons are confined to Europe. This is not true of existing members of the Community, such as France, who has considerable overseas connections. Nor is it true. I think, of the Community as a whole. It is one of the world's largest trading communities, involved in negotiations and discussions with most countries on the globe. I believe, on the contrary, that Britain in Europe will be better able to exercise its influence on the problems of the Western World and the world in general, and will be better able to forward our interests, and indeed European interests, more effectively than we could possibly hope to do on our own.
The time was when it was sometimes suggested on the Continent of Europe that our overseas ties were a liability in relation to British entry. I believe that that time has gone, and that it is generally recognised that our wide experience and the long-standing connections that we have had with our former Colonies, now powerful independent States, will be of real value in an enlarged Community moving towards a common European view on foreign affairs.
My Lords, as I have said, this cannot but benefit the Commonwealth also in many ways. I believe that the members of the Commonwealth are increasingly coming to recognise this, and I trust that the people of our own country will increasingly do so. As has been said in the debate, history and geography, questions of security and plain economics, have always tied us to the Continent of
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Europe. Noble Lords have pointed out that much British and Commonwealth blood has been spilt to preserve Europe and its civilisation from tyranny. Even in Europe's most fragmented periods our policy has to a great extent been European in outlook. Noble Lords have referred to the Romans, and it is quite true that since their time in our history our fortunes have always been bound up to a greater or lesser degree with Europe. The Romans saw the Continent of Europe, its greatness and its power, as a single entity, a unit, but of course dominated and pacified by one single individual or country.
We have had other examples throughout history of the same thing; we have only to think of Napoleon and, more recently, of Hitler. The price of unity on these terms—dictatorship, the sword, suppression of liberty—was too high. I think it is to the great credit of this country that we always realised that, and despite what the noble Lord, Lord Soper, felt, our attempt to achieve peace by preserving the balance of power did succeed in many instances. But, my Lords, there was never any unity. What has happened now in the past twenty years is that the countries of Western Europe have voluntarily come together in a single act of faith and will to create a real organic and European unity. It is becoming a great success. One has only to study the figures of growth of which noble Lords have given examples. My own view is it was a tragedy that our country did not go in at the start. It is not too late but, as noble Lords have said, this may be the last chance.
We have now at last the prospect of real unity and real security, of ending the bloodshed and the quarrelling, of rebuilding our prosperity and our dignity, and of taking our place in a Europe of equal nations, each with our own character, our own individual contribution, sharing the same ideals and working together for the common cause of human advancement and culture, and recreating the best in our civilisation.
This country has faced momentous decisions before, but this may be the most momentous of them all. It is certainly the most important, particularly, as noble Lords pointed out, in terms of our children's and our grandchildren's

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future happiness. I believe, and the Government believe, that we should be right to enter on the terms that have been agreed. I hope that when the time comes the House and the country will endorse this view.
THE LORD CHANCELLOR (LORD HAILSHAM OF ST. MARYLEBONE): My Lords, I beg to move that the debate be now adjourned until tomorrow.
Moved, That the debate be now adjourned until tomorrow—(The Lord Chancellor.)
On Question, Motion agreed to, and debate adjourned accordingly.

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