Sitting of 8 April 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the chair]
PRIVATE BUSINESS
  BRITISH WATERWAYS BILL
  Read the Third time and passed
FRIENDS' PROVIDENT LIFE OFFICE BILL
  LONDON TRANSPORT (ADDITIONAL POWERS) BILL
  As amended, considered; to be read the Third time
  QUEEN'S ROAD BRIGHTON BURIAL GROUND BILL [Lords]
  Read a Second time and committed

  EASTBOURNE HARBOUR BILL [Lords] (By Order)
  Order for consideration, as amended, read
  Bill to be considered upon Tuesday next

  BRITISH RAILWAYS (No. 2) BILL (By Order)
  Order for Second Reading read
  Bill to be read a Second time on Thursday next

  LONDON TRANSPORT BILL (By Order)
  Order for Second Reading read
  Bill to be read a Second time on Tuesday next at Seven o'clock

ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    Theatre Museum
    Mr. Hannamasked the Secretary of State for Education and Science whether he will make a statement on the future of the Theatre Museum.
    The Under-Secretary of State for Education and Science (Mr. Hugh Jenkins): I have nothing to add at present to my reply to the hon. Member for Bristol, West (Mr. Cooke) during the debate on the motion for the Adjournment of the House on Friday 21st March. —[Vol. 888, c. 2182-6.]
    Mr. Hannam: Is the hon. Gentleman aware that there is a degree of urgency in this matter? In the debate to which he has referred he gave an assurance that he would give urgent consideration to it. Everyone agrees that the Flower Market would be a suitable place for the Theatre Museum and that it offers far more space. Therefore, will the hon. Gentleman make an early decision about this matter?
    Mr. Jenkins: As I explained on 21st March, I am in touch with the Greater London Council and with my right hon. Friend the Secretary of State for the Environment about the possible use of the undercroft of the Flower Market at Covent Garden as alternative accommodation for the Theatre Museum and possibly at a later date for a theatre institute. I assure the hon. Gentleman that as soon as I am in a position to make a statement after the consultations have been carried out I shall make one.
    Mr. Strauss: Is my hon. Friend aware that the feeling in the art and theatre world that it is desirable to house the Turner Exhibition in Somerset House and the Theatre Museum and theatre institute in the Flower Market is well-night unanimous and exceedingly strong? Will he do his utmost to get the changeover effected as soon as possible?
    Mr. Jenkins: I am aware of the strength of the views which have been expressed, but perhaps they do not

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    entirely take account of all the difficulties and problems involved. Nevertheless, the future use of the Somerset House Fine Rooms would be a matter for discussion with the national museums and galleries, but only if Somerset House were not to house the Theatre Museum.
    Mr. St. John-Stevas: May I support the plea of the right hon. Member for Vauxhall (Mr. Strauss) and ask the Under-Secretary of State to give much higher priority to these important matters? Will he call a conference of all interested parties so that we may have the best of both worlds—a worthy Theatre Museum in Covent Garden and a permanent home for Turner's pictures at Somerset House?
    Mr. Jenkins: It is a question not of a conference or of priorities but rather of ascertaining the factual situation, which is what we are about at the moment. I am not in a position to authorise any change of plan until it is established that the Theatre Museum could open in Covent Garden at least as early as it could at Somerset House and that the Government could finance any adaptations needed, including any other capital or continuing costs which might be involved. Until the factual situation has been firmly ascertained between all the parties concerned, I shall not be in a position to make a further statement.

    National Theatre
    Mr. Goodhewasked the Secretary of State for Education and Science whether he will make a statement on the progress of work on the National Theatre building, indicating the proposed opening date for the auditoria and the proposed scale of operations therein.
    Mr. Hugh Jenkins: The completion of the theatre is the responsibility of the South Bank Board. The scale of operations within the theatre is a matter for consideration between the Arts Council and the National Theatre Board. I shall announce an opening date when the South Bank Board advises me that the theatre will be ready and when agreement has been reached on the scale of operations.
    Mr. Goodhew: Is the Minister aware that he said only last November that he had a pretty good idea when the date
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    would be? Can he not be more forthcoming now and tell us something about the scale of operations? Is he further aware that he said in November that this was meant greatly to increase our facilities for the performing arts? Would he not look rather stupid if it all went off at half-cock?
    Mr. Jenkins: I would, and I have no intention of looking stupid in that respect. I readily agree that the principle that the responsibility in this matter is devolved upon the appointed bodies can sometimes be irksome. One thing I have discovered is that when such devolution takes place the Minister concerned must not indulge in premature and public barking.
    Mr. Strauss: Is not the blame for the delay to be laid wholly on the builders and those responsible for the construction? Is it not true that in no circumstances can the Minister or the South Bank Board be blamed? Will my hon. Friend tell us whether in his opinion there will now be sufficient money, after all the allocations which the Arts Council has made, to pay for the full performance in the National Theatre, if that theatre opens, as is hoped, some time in the autumn of next year?
    Mr. Jenkins: I would hope that my right hon. Friend's estimate is on the pessimistic rather than the optimistic side. As he rightly says, the question of money cannot be separated from that of the timing of the opening. It is precisely these monetary questions which are being discussed currently between the Arts Council and the National Theatre Board. I am keeping in close touch with those discussions. Nevertheless, I also agree with my right hon. Friend that the contractors and subcontractors cannot be divorced from responsibility in connection with the delay.
    Mr. Freud: To further the Minister in his desire not to look stupid, will he ensure that the National Theatre Company has adequate funds with which to finance a realistic running-in period of about six months before the actual opening? Second, will the Minister say what assurances he can give that when the National Theatre opens it will be fully financed, so that it will not remain an empty building?
    Mr. Jenkins: I have already said that it is not the Government's intention to allow the building on the South Bank to remain empty. It is our full intention that the theatre shall be taken into full use. As for the question of timing, and whether one or other of the auditoria should open before others, these are matters currently under discussion. Another meeting on the subject will be taking place tomorrow. As soon as I am in a position to make a statement I shall do so.
    Mr. Arnold: Has the Arts Council made any substantial observations on the matters which we have been discussing?
    Mr. Jenkins: Yes. The Arts Council has made a lot of private observations but it has been wise enough not to make public observations on the subject.

    The Arts
    Mr. Robert Cookeasked the Secretary of State for Education and Science whether he will make a statement on the progress made following his approaches to both sides of industry on the subject of industrial patronage of the arts.
    Mr. Hugh Jenkins: I am still in touch with both sides of industry and I shall report further progress as soon as I can.
    Mr. Cooke: We have spent some time talking about the provision of money for the arts today. Does the Minister realise that this is one area in which he might he able to do something if he showed a bit more enthusiasm and drive?
    Mr. Jenkins: Oddly enough, I believe that I have been the most enthusiastic and driving Minister ever on the question of extracting money from private enterprise. I believe that I have had great success. I am going to a performance tonight which is supported by one of those companies which in my view have received insufficient publicity about their activities in this connection. I have also had a letter this morning from the Chairman of Imperial Tobacco putting forward a suggestion which I am studying with close attention and appreciation. I hope that in due course we shall be able to say something about this. I am also expecting to hear shortly from Mr. Campbell Adamson, of the CBI, concerning
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    some discussions I had with him on the subject recently.
    Mr. Hannam: Has the Minister looked at the experience of other countries, for example, Switzerland, where large concerns like Migros allocate 1 per cent. of their turnover for cultural sponsorship of the arts?
    Mr. Jenkins: That is indeed an interesting point, which I hope to discuss with the leaders of industry in due course.

    Educational Welfare (Ralphs Report)
    Mr. Gwilym Robertsasked the Secretary of State for Education and Science what study he has made of the Ralphs Report; what plans he has for expanding educational welfare and for generally strengthening the relationship between the school and the home; and if he will make a statement.
    The Secretary of State for Education and Science (Mr. Reg Prentice): The recommendations of the report have been broadly endorsed by the Local Government Training Board. Local authorities are well aware of the importance of educational welfare and of home-school links, and I have no doubt that they will do what they can to implement the recommendations, as far as present financial constraints will permit.
    Mr. Roberts: Does my right hon. Friend accept that this is an area, like so many others, which cannot be left to local authorities? Does he realise that the educational welfare service has the feeling that it is the Cinderella service? Does he not accept that there is a need for a wider dimension in terms of the responsibility of the service's officers?
    Mr. Prentice: I want to make it absolutely clear that in my view the service is certainly not the Cinderella service, and that the 2,400 educational welfare officers do a first-class job of fundamental importance. As for the question whether there should be some degree of national guidance on some aspects, my right hon. Friends and I are considering this issue and hope to produce general guidance before too long.
    Mr. Christopher Price: Is my right hon. Friend aware that there is some evidence in London that the educational welfare

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    service is so impoverished that the Metropolitan Police is having to be brought more and more into service in an area which it was never intended to serve? Does he realise that since the building up of social service departments in local authorities the educational welfare service, for all that he says, does feel a Cinderella compared with other social services? Will he consult with his right lion. Friend the Secretary of State for Social Services to make sure that differentials in salaries and conditions between these two sets of social workers can be ironed out?
    Mr. Prentice: Since the Seebohm Report of 1968 there has been a great deal of discussion about the relationship between the two services and whether they should be combined. This is a matter which in the Government's view is best left to local authorities, most of which prefer that the educational welfare service should be part of the education service in the locality.

    Direct Grant Schools
    Mr. Peter Morrisonasked the Secretary of State for Education and Science if he has now made an estimate as to the costs involved in the conversion of direct grant schools into comprehensive schools.
    Mr. Prentice: There will be some savings and some additional expenditure. The precise figures cannot be estimated, but the change is not likely to make much difference one way or the other to public expenditure.
    Mr. MorrisonWill the right hon. Gentleman tell the House how much the taxpayer and ratepayer save as a result of the parental contribution, over and above the direct grant? Will he also confirm that local education authorities will be able to send children in their areas to direct grant schools which are forced to go independent, once they do go independent?
    Mr. Prentice: The answer to the latter part of the hon. Gentleman's question is "Yes, Sir". The answer to the first part is that the present annual figure is £10·.3 million in respect of capitation grants. The fee remission grant, which I think the hon. Member had in mind, is £2·1 million.
    Mr. St. John-Stevas: Since 90,000 of the 120,000 pupils in direct grant schools are likely to need places in the maintained sector, is not the financial position much more serious than the Secretary of State has allowed for? Would it not cost about £70 million to provide these places in the maintained sector? Could not that money be used to supply about 200,000 nursery places? Surely this kind of educational priority is more worthy of Alice in Wonderland than of the Department of Education.
    Mr. Prentice: The hon. Gentleman is a bit wild in his arithmetic. He ignores the fact that places will continue to be available in these schools. No one is talking about the closure of schools. The hon. Gentleman also ignores the fact that many of the schools—I hope a great many—will choose to come into the maintained sector. There is no question of suddenly abolishing a number of schools, as he seems to presuppose, and then paying for places that were previously provided free. As for the reasons for doing this, we put them forward clearly when the matter was under discussion a few weeks ago. We have not heard any constructive counter-arguments from the Opposition.

    Comprehensive Education
    Mr. Guy Barnettasked the Secretary of State for Education and Science how many local authorities have now submitted plans to him in response to Circular 4/74 issued by his Department;and how many have refused to do so.
    The Under-Secretary of State for Education and Science (Mr. Ernest Armstrong): Of 96 local education authorities in England, 86 have delivered a substantive reply and a further five an interim one. No authority has refused to respond.
    Mr. Barnett: I am delighted by my hon. Friend's reply, but is he not aware that some authorities have said that they will not go comprehensive? Is he also aware that in respect of some authorities which have said that they will go comprehensive there is considerable doubt about the precise time when they will do so? Has not my hon. Friend a good precedent in the Education (Milk) Act 1971, which was introduced by the

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    Leader of the Opposition, to coerce recalcitrant local education authorities?
    Mr. Armstrong: Yes, I am aware of the situation, and we are making a close analysis of all responses from the local authorities. The Government are determined to have genuine comprehensive reorganisation in every part of the country. We shall not stand aside and allow local authorities to prejudice the best educational interests of children by perpetuating the wasteful arid unfair system of selecting and rejecting children. The Government will take all necessary steps to implement national policy as agreed by the House.
    Mr. Lane: Will the Minister deny recent reports that the Government intend to introduce compulsive legislation in the near future? Would it not be much wiser to act gently to allow for the evolution of public opinion and the greater availability of resources, rather than try to force the pace in the way the Minister indicated, with all the bitterness and distraction that that would involve?
    Mr. Armstrong: This controversy has been going on for a long time. In going round the country I have found that even local authorities which are in genuine difficulty about going comprehensive are gratified that the Government have indicated firmly that they will implement the national policy. Far from repudiating any statements that have been made, we want to persuade local authorities. We are arranging meetings with local authorities which say that they will defy national policy. We shall talk to them and explore all the possibilities, but in the end, if legislation is necessary it will certainly be brought forward.
    Sir G. Sinclair: Without massive finance, how does the Minister propose to provide comprehensive schools of a viable size out of schools that are viable because they are selective and are of an average size of about 500 or 600 pupils—a size that we are told by the pundits of the comprehensive system is unthinkable for a viable comprehensive school?
    Mr. Armstrong: We are not prepared to tolerate for a day longer than necessary a situation in which many thousands of children are rejected and sent to
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    schools that are for children who are not clever enough to be selected for grammar school places. I commend to the hon. Gentleman the situation in Birmingham, for instance. I could take him to many other areas where, without the injection of extra resources, many thousands of children are being given a real educational opportunity.

    Careers Advice Service
    Mrs. Chalkerasked the Secretary of State for Education and Science how many staff are employed per 1,000 children in classes of 15-year-olds upwards on careers advice.
    Mr. Armstrong: There is no regular return of teachers employed within the various subject areas of the school curriculum and this information is, therefore, not available.
    Mrs. Chalker: I much regret the Minister's answer. In view of the vital importance of extending careers opportunities, does not the Minister think that it is time that we collected the statistics and established specialised careers teaching posts, with exchanges with industry? Might not that help to solve some of the problems of youth unemployment?
    Mr. Armstrong: I hope that the hon. Lady has not taken my reply as an indication that we minimise the importance of careers guidance in schools. We have an expanding careers guidance service involving a great number of teachers who may also undertake other duties. The Department gives every possible help.

    Day Release
    Mr. Bryan Daviesasked the Secretary of State for Education and Science, in view of his acceptance of the need to undertake curriculum development before the extension of day release for young workers, if he will propose establishing an appropriate body to undertake this function and make financial arrangements therefor.
    Mr. Prentice: As I stated in reply to a Question by the hon. Member for Cannock (Mr. Roberts) on 4th March—[Vol. 887, c. 358.]—I have no plans at present to change the existing arrangements for further education curriculum development, but this matter is being further

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    studied by my Department as part of a wider review of the needs of 16-to-19year-olds.
    Mr. Davies: My right hon. Friend will understand that I find that reply disappointing, in view of the declared policy aim of trying to increase the level of educational resources for those who are particularly disadvantaged. Does not my right hon. Friend realise that although we spend a great deal of money on curriculum development in schools in which children stay on beyond the age of 16, for the 16-to-19-year-olds who leave school there is little in the way of curriculum development?
    Mr. Prentice: My hon. Friend should not underestimate the amount of curriculum development work that goes on under the auspices of the Technical Education Council, the Business Education Council, and several of the regional technical examination boards, in technical colleges of education and elsewhere. There may be a gap here, particularly in relation to the 16-to-19-year-olds who are not being directed into further education or released from their jobs for further education, in respect of those whom we wish to receive further education. I referred to that problem in my reply and said that we were studying it.
    Mr. Wigley: Is the right hon. Gentleman aware of the great need among the 16-to-19-year-old group, in areas that are not highly developed industrially, for much greater facilities to be made available, particularly for the development of skills for industry? There is also a vacuum which needs to be filled in relation to young people—before they become eligible for jobs—who need provision to be made for their education after they leave school?
    Mr. Prentice: I agree with the hon. Gentleman. One of our great difficulties is that the majority of day release or block release which occurs now is linked specifically to industrial training courses which qualify for grants under the Industrial Training Act. That is unfair between groups of boys and girls and uneven between different parts of the country. Our problem is to find a method of extending further education opportunities to wider groups of boys and girls. This matter is under intense study, and I
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    am consulting a large number of organisations with expertise in this area.
    Mr. Carter-Jones: When my right hon. Friend considers the problems of the 16-to 19-year-olds in further education colleges, will he also consider the discretionary grants, which are so abysmally low that young persons cannot continue their studies? The fees charged and the cost of travelling for the purpose of industrial visits are so exorbitant that young people have to discontinue their studies. Will my right hon. Friend please consider that matter?
    Mr. Prentice: We have been looking closely at the whole question of student grants. We have made some modest improvements in monetary grants to HND students and to certain others. Progress is limited, for financial reasons, but I am well aware of the problem to which my hon. Friend refers.

    Teacher Exchanges (France and Germany)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science how many post-to-post teacher exchanges, expressed in terms, have taken place with France and Germany in the academic years 1972–73 and 1973–74; and what his forecasts are for the future.
    Mr. Armstrong: In 1972–73 exchanges between French and British teachers totalled 118 terms, those between German and British teachers 38. The corresponding figures for 1973–74 were 105 and 27. In the current year they total 95 and three, and I expect 115 and 21 in 1975–76.
    Mr. van Straubenzee: Does the Minister accept that these are disappointing figures when set against the high hopes of a few years ago? I seem to remember that there were hopes that about 1,000 teachers a year would be involved in these exchanges. At a time when the House is actively considering the whole question of Europe, is it not of importance that the education service should play its part? Does the Minister see any way of improving these figures?
    Mr. Armstrong: I share the hon. Gentleman's disappointment. The scheme started with high hopes, as it was thought that it would be of mutual benefit to teachers and pupils. At the end of this

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    month we shall be discussing with the French authorities how we may stimulate interest in the scheme. I assure the hon. Gentleman of our continuing determination to make the scheme succeed.
    Mr. Guy Barnett: Does my hon. Friend recognise the enormous importance of the exchange of teachers between countries in terms of developing world understanding? Does he also recognise the importance of the work of organisations such as the League for the Exchange of Commonwealth Teachers?
    Mr. Armstrong: Yes. I am glad that my hon. Friend has reminded the House of the important work that is done in that area. We are arranging short-term visits in the hope that they will stimulate teachers to apply for much longer exchanges. We think that they will be of great benefit to all concerned.

    Schoolchildren (Concessionary Travel)
    Mr. Moateasked the Secretary of State for Education and Science if he is now in a position to announce his decisions following the review of concessionary travel arrangements for schoolchildren.
    Mr. Ioan Evansasked the Secretary of State for Education and Science if he will announce his decisions following the review of concessionary travel arrangements for schoolchildren.
    Mr. Madelasked the Secretary of State for Education and Science if he intends to bring in changes in the regulations governing school transport before 1st September 1975.
    Mr. Armstrong: My right hon. Friend is now considering the comments of the local authority associations and other interested bodies which were consulted about the report of the Working Party on School Transport. While there is widespread criticism of present arrangements there is no agreement as to the changes that should be made.
    Mr. Moate: Does not the Minister recognise that that answer indicates yet once again that the Government seem to have no idea what to do about this difficult problem? I suggest to the Minister that the real answer is to abolish the
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    out-dated and unfair statutory walking distance and to pass back to the local education authorities total discretion in respect of whatever assistance they can give within the resources available to them.
    Mr. Armstrong: I share the hon. Gentleman's concern, and I apologise for the great delay. This is a very difficult problem. The real difficulty is to reconcile the reasonable and growing demand of parents for some assistance towards school travelling expenses and our anxiety not to impose extra financial burdens on local authorities. This is a very expensive matter.
    Mr. Evans: Will my hon. Friend consider this matter sympathetically and urgently? Does he realise that parents with two or three schoolchildren are having great difficulty in getting their children to school by school bus, and that some of them are compelled to ask their children to walk to school? Is he aware that such children often have to walk to school in inclement weather and sit in wet clothes in the classroom? Does he agree that that is good neither for their health nor for their education?
    Mr. Armstrong: I accept entirely what my hon. Friend says. As a matter of fact, local authorities are committed to approximately £50 million on travel expenditure in each year. My officers have been visiting different areas in the country, because no two areas have the same problem. We are trying desperately to come forward with an acceptable solution.
    Mr. Madel: As the Government are finding it difficult to make a decision, will they not, as an interim measure, reduce the three-mile limit to a two-mile limit? Will the Minister please take note of the fact that bus fares have recently increased quite steeply for millions of people and are liable to increase again before the beginning of the next academic year? Bearing in mind that the report has been with the Government since December 1973, must there be any further delay?
    Mr. Armstrong: I understand and share the hon. Gentleman's impatience. We are trying to arrive at an equable solution. I shall come forward with proposals as quickly as possible.
    Mr. Grocott: If experts are examining certain areas where there are difficulties, will my hon. Friend consider sending some of them to the Mile Oak and Fazeley areas, just outside Tamworth, where children are making journeys to school of just under three miles, and where parents are frequently faced with school transport costs of £2 or £3 a week when they have a number of children at school? Does my hon. Friend appreciate that if the children of those parents did what the law at present expects them to do—namely, walk to school—they would be involved in walking down the A5, in the Midlands, in probably one of the busiest parts of that very busy road?
    Mr. Armstrong: I shall bear in mind what my hon. Friend says. It is another illustration of the great difficulty in coming to the proper answer. If he has any detailed suggestions to make I shall be glad to have them from him.

    University Teachers (Pay)
    Mr. Laneasked the Secretary of State for Education and Science what progress there has been in the negotiations on university teachers' pay; and whether he will make a statement.
    Mr. Prentice: The negotiating committee met at the end of February and will be resuming its discussions later this month.
    Mr. Lane: I accept that the Secretary of State is personally sympathetic, but does he accept that university teachers are upset not only by the delay but by the fact that the universities may soon become the poor relations of the polytechnics? Will the right hon. Gentleman exert all his personal influence to get a speedy and generous settlement and then to maintain a fair relationship between university and polytechnic salaries?
    Mr. Prentice: I accept the general principle which was outlined in the Houghton Report, namely, that there should be parity in pay between teachers in universities and teachers undertaking comparable work in other institutions of higher education. I would not wish to comment in any more detail than that while the negotiations are continuing.
    Mrs. Bain: Is the right hon. Gentleman aware of the bitterness felt by university
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    teachers since the Government have treated schoolteachers and polytechnic teachers as special cases? Is he aware that university teachers feel that they have not been given the same priority? Will he explain why the Department of Education and Science has been so unwilling to bring in an arbitrator in this case? Is he aware that that provision is laid down in the social contract?
    Mr. Prentice: I can understand the feelings of university teachers. However, for many years polytechnic teachers were at a disadvantage compared with university teachers. During that period they had reason to feel discontented with the arrangements. The Houghton Report's general proposition for broad parity is the right answer. I do not think that we are at the point of arbitration and I hope that we shall not reach it. I hope that the negotiations now taking place will result in an agreement.
    Mr. Luard: Does my right hon. Friend accept that quite apart from the basis of comparison with the polytechnic teachers, which is causing increasing concern among many teachers at universities, there is a feeling that university teachers are falling behind generally in relation to those with comparable salaries and that they are particularly concerned that there should be greater speed in reaching an agreement? Will my right hon. Friend bear those points in mind?
    Mr. Prentice: I think that all these points will be borne in mind by the negotiating committee which is considering these problems.

    Open University
    Mr. Hattonasked the Secretary of State for Education and Science what action he proposes to take in order to preserve the "openness" of the Open University, in view of proposals under discussion that the same principles in respect of undergraduate tuition fees at conventional universities should govern future fee increases at the Open University.
    Mr. Prentice: The present tuition fee at the Open University has applied since the academic year 1973. The proposed increase now under discussion would take effect from the academic year 1976 and is intended to maintain the value of the university's fee income in relation to grant.

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    I do not think that this would change the character of the Open University.
    Mr. Hatton: Is my right hon. Friend aware that that reply will be received with very great disappointment? Is he further aware that during the past five years the Open University has been attracting an increasing number of applications from what are termed the "manual occupation" groups? That is a welcome sign of the Open University's reaching out to the educationally underprivileged. Is my right hon. Friend aware that to increase the fees as is suggested— fees which are already high, and unsupported by grant—will be one of the greatest threats that the Open University has yet faced?
    Mr. Prentice: I agree completely with the first part of my hon. Friend's question. I believe that the Open University is doing a tremendous job and making a unique contribution to British education. I do not think that its fees can be exempted from the effects of inflation, any more than can anything else in our national life. However, our efforts are being directed towards finding the right answers. My noble Friend discussed this matter with the representatives of the Open University on 25th March. I assure my hon. Friend that no final decision has been made on the figure.

    Canada
    Mr. Biggs-Davisonasked the Secretary of State for Education and Science whether he will pay an official visit to Canada to study educational developments there.
    Mr. Prentice: I have no plans to make such a visit.
    Mr. Biggs-Davison: Will the right hon. Gentleman at least study the Canadian experience in allowing pupils to leave school early? Does he recall the sad case of two young constituents of mine who were forced back to school after an administrative mistake over the precise time of their birth, and after one of them had almost entered employment? Is he aware that that mistake could not be remedied, because of the inflexible law of the school leaving age? Will the right hon. Gentleman's Department think again about this matter?
    Mr. Prentice:Whatever age is laid down by law for school leaving purposes, there is always the possibility of an administrative mistake. I do not think that such a mistake arises from a particular age being fixed by law. As for the Canadian experience, only in the Province of Ontario have they gone in for the new option of leaving at 14. Other provinces have rejected that policy. This House has also rejected it. Both sides of the House are committed to a school leaving age of 16 years. I believe that we were right to come to that conclusion. Since the school leaving age was raised, experience has shown that the raising has been to the benefit of the majority of children concerned.

    Sacred Heart School, Redcar
    Mr. Thinasked the Secretary of State for Education and Science if he will make a further statement about the situation at the Sacred Heart School, Redcar.
    Mr. Armstrong: As my right hon. Friend stated yesterlay in reply to a Question by the hon. Member for Cornwall, North (Mr. Pardoe), it is understood that the governors have suspended the headmaster following his unwillingness to integrate the eight teachers who had been on strike.
    Mr. Tinn: Does the Minister join me in welcoming the initiative of the Chairman of the Cleveland County Education Committee in calling a meeting of interested parties in an endeavour to reach a solution to this protracted dispute? Will he give some reassurance to the teachers who are in dispute about their future if they accept other posts in the area, since otherwise they might be extremely concerned about their situation?
    Mr. Armstrong: I understand that the teachers concerned have been offered permanent posts within the authority. In this long and seemingly intractable dispute, it is surely now time for all the parties to consider what they can do in the best interests of the children. If they were to sit down in that spirit, they might be able to resolve the dispute. We are willing at all times to help in any way possible.
    Mr. Brittan: Does the Minister accept that there is the gravest disquiet locally because of the fact that just when it

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    appears that the dispute may be coming to an end, the matter is taking another and yet more serious twist? Since the dispute has been going on for so long, will the Minister personally arrange a meeting with the parties concerned—governors, the local education authority, parents and teachers—to see whether a fresh initiative can be taken by a totally disinterested person, so as to lead to a new approach to a solution?
    Mr. Armstrong: I share the hon. Gentleman's concern and I shall consider his suggestion. I believe that we should make progress if all parties, rather than considering who was right and who was wrong, asked themselves what was in the best interests of the children.

    Colleges of Education
    Dr. Hampsonasked the Secretary of State for Education and Science if he will make a statement on the effect which his decision to reduce the number of teacher training places will have on the closure and reorganisation of colleges of education.
    Mr. Prentice: I have nothing to add, at present, to the reply that I made on 20th March last to a Question from my hon. Friend the Member for Luton, East (Mr. Clemitson). [Vol 888, c. 471-21
    Dr. Hampson: Does the Secretary of State agree that his proposed cut in teacher-training places amounts to a dramatic and damaging reversal of policy pursued by successive Secretaries of State since 1958? Does he realise that few demographers are crazy enough to believe that current demographic trends will continue, yet is it not on that basis that he is abolishing a provision which will be very hard, if not impossible, to replace?
    Mr. Prentice: No, Sir. These policies were carefully worked out after full discussion in the advisory committee on the supply and training of teachers. If the hon. Gentleman will study the "Report on Education" which we issued the week before last and which gives details of our demographic studies, he will see that we are assuming that there will be some increase in birth rate in the years ahead.
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    We are working out our figures on that assumption.
    Dr. Boyson: Does the Secretary of State not agree that although at one time the view was that large schools and large universities were advisable, the movement is now the other way? When he is considering which training colleges or colleges of education are to close, will he remember that smallness is sometimes a good thing, and will he bear in mind that these matters should not be decided on geographical area only? Does he not agree that if colleges are popular and well-subscribed, those are the institutions which should be allowed to continue and which certainly should not be closed just for administrative convenience?
    Mr. Prentice: We shall not take action simply on the basis of administrative convenience. We shall consider the quality of a college among all the relevant factors. There will not be a unilateral decision taken by my Department. There will be discussions in detail with local education authorities, with voluntary bodies concerned and with the colleges themselves. For this reason 1 said in my original answer that I could not go further than my recent reply on this subject. However, I hope that by the summer most of the decisions will have been taken.
    Mr. Edwin Wainwright: Is my right hon. Friend aware that many people appreciate the thought which he and his Department have given to this important problem? However, does he appreciate that there is great feeling throughout the country over the reduction in the number of teacher training places, since it is thought that this course will not bring about a reduction in the number of pupils per class, which is what we should be aiming at?
    Mr. Prentice: The reduction in teacher training places, because of the age profile of the profession, is consistent with an increase in the number of teaching posts. The target figure of between 480,000 and 490,000 in 1981 represents an increase in the number of teaching posts and is an improvement in the staffing position—to such an extent that in the early 1980s we should reach the position in which no class in the country should contain more than 30 pupils.

  BLACKPOOL
  Mr. Blakerasked the Prime Minister if he will pay a visit to Blackpool before the Whitsun Parliamentary Recess.
  The Prime Minister (Mr. Harold Wilson): I have at present no plans to do so, Sir.
  Mr. Blaker: Is the Prime Minister aware that the Secretary of State for Education said in Blackpool last week that if inflation is not kept under control every aspect of national life will be ruined? Is he also aware that the Government have said that the pay settlements for the Post Office workers and electricity supply workers breach the social contract? Bearing in mind the Prime Minister's own criticisms, during the election campaign, of rogue employers in the private sector, how does the right hon. Gentleman now justify the fact that settlements now being made by the Government in the public sector breach the social contract?
  The Prime Minister: In that supplementary question the hon. Gentleman has come a long way from Blackpool, no doubt to the delight of his constituents. In regard to the statement made in Blackpool by my right hon. Friend the Secretary of State for Education, I congratulate the hon. Member for so anticipating that statement that his Question was tabled long before my right hon. Friend visited Blackpool. What my right hon. Friend said then was said on behalf of the Government, and it has been said by myself and by other Ministers. I agree with what my right hon. Friend said in Blackpool.
  Mr. Ashton: When my right hon. Friend next goes to Blackpool, to the Labour Party conference, will he recall the resolution which was passed and which called for an equal allocation of opportunity for everybody to take part in the great debate on the Common Market? Will he say why approximately 30 Ministers who are anti-Marketeers will not be allowed to speak in the current debate?
  The Prime Minister: I have not noticed any inability on the part of members of the Parliamentary Labour Party or, indeed, of Labour Party members as a whole, to take part fully in the debate on
  1012
  Ministers speeches in the House, this was a perfectly appropriate decision taken by the Cabinet.

  SCOTLAND
  Mr. Sproatasked the Prime Minister when he next intends to pay an official visit to Scotland.
  The Prime Minister: I visited Scotland on 27th and 28th February and again on 22nd March. I have no plans for a further visit before July.
  Mr. Sproat: Will the Prime Minister seek an opportunity before July to make clear to the Scottish people—particularly to certain members of his own party and to the Scottish TUC—the disastrous results for Scotland if the United Kingdom leaves the European Community? Will he confirm that 12,000 jobs in Scotland would be put at risk if the United Kingdom were to leave the EEC, and that Scotland would be deprived of about £65 million each year from Community sources?
  The Prime Minister: I am not in a position to check the accuracy of the hon. Gentleman's figure in regard to jobs, or his other figure, but I spoke on the subject of the renegotiations which we have held on the Common Market when I was in his own city of Aberdeen just before Easter.
  Mr. Buchan: Will the Prime Minister bear in mind that the last time he was in Scotland he promised that there would be an open debate on the Common Market, without rancour? Will he also remember that freedom is indivisible, and that this principle should also apply to Ministers in this House? Does he agree that if that pledge were properly fulfilled, he and the rest of us would gain credit for it?
  The Prime Minister: I do not agree with my hon. Friend. I appealed for a comradely debate, free from rancour, and so far this is what we have had—with one or two significant, or insignificant, exceptions. I trust that this will continue. The agreement to differ, which I announced, referred to a total freedom —within the normal rules of etiquette, friendly behaviour, and gentlemanly

  1013
  courtesy—to campaign in the country on the referendum. The situation governing a parliamentary debate is quite different. and has always been so considered.

  EUROPEAN COMMUNITY
  Mr. Arnoldasked the Prime Minister whether he will make a ministerial broadcast on Europe.
  Mr. Brittanasked the Prime Minister if he will make a ministerial broadcast on Europe.
  Mr. Hurdasked the Prime Minister whether he will make a ministerial broadcast on British membership of the European Community.
  Mr. Geoffrey Johnson Smithasked the Prime Minister if he will make a ministerial broadcast on British membership of the European Economic Community.
  The Prime Minister: I refer the hon. Members to the reply which I gave to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) on 20th March — [Vol. 888, c. 469.]
  Mr. Arnold: Will not the Prime Minister accept that, since the future credibility of our country in international negotiations now depends upon our remaining a member of the European Community, it is important that he should show greater determination in these matters by means of a ministerial broadcast, not least by virtue of the right of reply which, given to my right hon. Friend the Leader of the Opposition, would be a helpful way of advancing matters a stage further?
  The Prime Minister: The hon. Member will have noted from the Order Paper that we are currently engaged in a three-day debate on the European situation, during which I managed to catch your eye, Mr. Speaker, yesterday afternoon. The hon. Member can make his point in the debate.
  With regard to ministerial broadcasts, I think that we must to some extent have regard to the problems of the broadcasting authorities in this campaign. [Interruption] I regard the hon. Gentleman's question as serious, even if his neighbours do not.
  1014
  The broadcasting authorities are enjoined, and have agreed, to maintain a balance. Ministerial broadcasts made by the three party leaders might appear to be rather on one side of the debate. However, to set the hon. Gentleman's mind at rest, since my statement in the House on 18th March I have made four national television broadcasts—not ministerial broadcasts—in addition to that which I made at the end of the Dublin conference before my statement to the House.
  Mr. Jay: In view of what the Prime Minister said about freedom of debate, is he aware that on 4th May 1932 Sir Herbert Samuel spoke as Home Secretary, from the Treasury Bench, expressing the views of those in the Cabinet who disagreed with the Government's policy?
  The Prime Minister: Yes, Sir. I assure my right hon. Friend that I consulted those precedents and that speech, possibly before my right hon. Friend, and, indeed, before the end of last year. In that situation the only possibility of agreement to differ in a Conservative, Liberal and minuscule Labour coalition was through debate in the House. In the present situation there is a referendum campaign, which is of a totally different order, because all Ministers who have availed themselves of the unprecedented offer of agreement to differ are free to campaign in this referendum. I therefore believe that the 1932 precedent is totally inapplicable in this situation.
  Mr. Brittan: Since the Prime Minister will not make a ministerial broadcast on the question of Europe, will he clarify yesterday's Written Answer about the conduct of dissenting Ministers? In saying that dissenting Ministers will be stating the Government's position and not their own, is the Prime Minister asking them to be hypocritical mouthpieces for views which are abhorrent to them? If questions are to be transferred when necessary who is to decide when it is necssary for them to be transferred—the Minister concerned, the Foreign Secretary, or the Prime Minister? Does not that illustrate the dangerous consequences of abandoning the traditional concept of collective ministerial responsibility?
  The Prime Minister: No, Sir. I cannot accept what the hon. Gentleman says. He

  1015
  certainly cannot have it both ways, which he is trying to have in that question, as, indeed, is the Conservative Party—none better than the right hon. Member for Finchley (Mrs. Thatcher), who has dissociated herself from everything done by her predecessor. We know that the Conservative Party cannot press, as it has tried to press, that answers from the Front Bench should reflect entirely the Government's decision about this recommendation. At the same time, the hon. Gentleman asked that Ministers who have dissociated themselves from the decision should be free to speak in a different sense. With regard to the present situation, I said that all Ministers—not only dissenting Ministers—will speak in accordance with Government policy.
  Mr. Whitehead: Does the Prime Minister not agree that the prime need now in the debate on the Common Market is not for ministerial broadcasts but for broadcasts by spokesmen for and against our remaining in the Common Market? Those broadcasts will incorporate safeguards which do not otherwise obtain, in view of editorial bias or the more scurrilous advertisements in the Press which recently compared those who believe in remaining in the Common Market with Vidkun Quislings.
  The Prime Minister: I agree with my hon. Friend—and I include advertisements dealing with the other side of the question, of which there was a wholly improper example last week. However, my hon. Friend is right. The broadcasting authorities are trying genuinely to maintain a balance between the pro-and anti-Market sides. It is for them to decide. I have no doubt that the Standing Committee of all parties and the broadcasting authorities themselves are considering how they will conduct themselves during this campaign.
  The issue is not between parties, and therefore is not between ministerial and Leader-of-the-Opposition broadcasts—rather, it is between the two sides in the national debate.
  Mr. Hurd: Since the Prime Minister is not to make a broadcast, will he say—to fill a strange gap in his speech yesterday—how he sees his personal position if his European policy is repudiated in the referendum?
  The Prime Minister: I do not think that that matter arose out of yesterday's speech. It has arisen on many occasions. The Government will accept the verdict of the British people.
  I thought I read a report that the Leader of the Opposition said—this may have been an unfair report, since the Press is occasionally inaccurate, and the right hon. Lady may wish to repudiate it—that if there were an adequate turnout and a clear majority, all parties would accept it.
  Mrs. Thatcher indicated dissent
  The Prime Minister: The Leader of the Opposition says that she did not say that. In that case, I wish that she would repudiate that. [Interruption] I am delighted to hear that she has made her position clear. A Member of Parliament would need to be arrogant to say that whatever the country decided in this ballot could be disregarded by the House.
  Mrs. Winifred Ewing: Will the Prime Minister refrain from taking umbrage if I suggest that he asks the Secretary of State for Scotland to make any ministerial broadcast in Scotland, since the Secretary of State's anti-EEC views will be more in tune with those of the Scottish audience?
  The Prime Minister: Of course I never take umbrage at any proposals made to me by the hon. Lady. The broadcasting authorities in Scotland, which to some extent are separate, will try to preserve a balance between the pro-Market and anti-Market adherents and will give a fair coverage to both.
  Mr. Johnson Smith: Since the Prime Minister is not to make a ministerial broadcast, will he take the opportunity now of justifying the exclusion of British subjects living abroad from voting in the referendum when Irish citizens living in this country, who may have already voted, will be given an opportunity of voting yet again?
  The Prime Minister: The question has been put to me before. I did not say that I would not make a ministerial broadcast. I said that I had no present plans to do so. That was my answer. Should there be, within the discretion of the broadcasting authorities and as part

  1017
  of the balance they maintain, the possibility of ministerial broadcasts—suitably balanced, of course—I would consider that.
  As regards voting, the House will debate the Referendum Bill on Thursday. That Bill will be taken in Committee on the Floor of the House. These are matters for discussion at that time. We have declared the views of the Government on this matter.
  Mr. Spriggs: Does my right hon. Friend realise that he has many right hon. and hon. Members behind him who would prefer the Cabinet to take another look at this matter and to allow all Ministers to make statements based upon their own opinions and not those of the Prime Minister?
  The Prime Minister: I should always prefer to have my hon. Friend behind me than some right hon. and hon. Members at whom I have to look from this Dispatch Box. My hon. Friend is my parliamentary neighbour, and I spoke for him when he was a candidate in less hopeful seats.
  As for my hon. Friend's question, this unprecedented agreement to differ in an unprecedented situation, namely, the referendum, is unlimited in its effect on all Ministers and others in the campaign in the country. It was never envisaged by any of us that that would be the position in the debate this week.
  Mrs. Thatcher: Will the Prime Minister accept that on this issue he has some friends in front of him, if not behind him? As his dissenting Ministers seem to be having it both ways, would not it be better for the Prime Minister and for everyone else if they resigned, pending the result?
  The Prime Minister: The right hon. Lady's last few words remove from me the obligation to refer to her as "my right hon. Friend" in view of her support. I do not accept what she says. This is a unique situation. It is a situation in which the right hon. Lady's party is divided, as ours is and as the country is. I am proud that my Cabinet is more representative of the two views than the rather crony-dominated Cabinet which preceded ours. That is why the country was taken into the Market without the promised full-hearted consent—and I have
  1018
  never heard whether the right hon. Lady will dissociate herself from that, either.
  If the country votes in accordance with the Government's recommendation, there will be no doubt about the position. There has been every doubt since 1971, when the Government of which the right hon. Lady was a member took the establishment, but not the British people, into the Common Market.

QUESTION OF PRIVILEGE
Mr. English: I beg to submit to you, Mr. Speaker, that the Prime Minister's Written Answer yesterday on European Community membership revealed a contempt of this House and a breach of its privileges.
I am not referring to the last paragraph, which is simply the normal courtesies between Members of the same party. Nor am I referring to the Prime Minister's instructions to members of his Government to act in accordance with Government policy when they are on official business. I am referring to the first sentence of the second paragraph, which reads:
"This freedom does not extend to parliamentary proceedings and official business."— [Official Report, 7th April 1975; Vol. 889, c.351]
Official business is of no concern to us, but restricting the freedom of parliamentary proceedings is a matter for this House and not for the Government. As was pointed out earlier, on a previous occasion in 1931 no restriction was placed on right hon. and hon. Members speaking personally, even if they were Ministers, to express their own views.
It is the law of the country that Members of Parliament have not merely a right but a duty to express in this House their opinions and to be protected in ways in which they would not he outside this House. They are protected, for example, against defamation by absolute privilege.
It is the principle of the procedures of this House that a Member may come here and say what he chooses. Normally, members of the Government do not do that, but in this case they are to be allowed to do so outside this House. I cannot imagine a more complete derogation from the rights of this House than

1019
to say that its Members may speak out-side it but not in it.
In so far as the wording of which I complain refers to proceedings in this House and to the personal views of Ministers, I submit contempt of this Ho wording of which proceedings in this personal views of that it reveals a contempt of this House.
Mr. Speaker: I shall consider the matter and rule upon it tomorrow.

BILL PRESENTED
  PETROLEUM AND SUBMARINE PIPE-LINES
  Mr. Secretary Varley, supported by the Prime Minister, Mr. Secretary Callaghan, Mr. Secretary Ross, Mr. Secretary John Morris, Mr. Harold Lever, Mr. Edmund Dell and Mr. John Smith, presented a Bill to establish the British National Oil Corporation and make provision with respect to the functions of the Corporation; to make further provision about licences to search for and get petroleum and about submarine pipelines, refineries and the supply and use of petroleum; to authorise loans and guarantees in connection with the development of the petroleum resources of the United Kingdom and payments in respect of certain guarantees and loans by the Bank of England; and for purposes connected with the matters aforesaid: and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 127.]

  SCOTTISH AFFAIRS
  Ordered
  That the matter of the Clayson Report on Scottish Licensing Law, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Thomas Cox]

  ORDERS OF THE DAY
    SUPPLY
    [13TH ALLOTTED DAY]—considered

    EUROPEAN COMMUNITY MEMBERSHIP)
    Order read for resuming adjourned debate on Question [7th April]
    That this House approves the recommendation of Her Majesty's Government to continue Britain's Membership of the Community as set out in the White Paper on the Membership of the European Community (Command No. 5999)—[The Prime Minister]
    Question again proposed
    3.36 p.m.
    Mr. Nigel Spearing: On a point or order, Mr. Speaker. On 19th December last, in a debate on the six-monthly White Paper report on EEC negotiations, the Government put down on the Order Paper certain regulations from the EEC concerning the budget which were to be debated along with it. As a result of representations, those documents were not debated.
    Yesterday, the Government put down on the Order Paper two other Commission documents, Nos. R /650/75 and R /1372 / 73, concerning regional aid. As a result of an objection which I made yesterday, those two documents were not moved to be taken note of yesterday, although the debate concerning approval of the recommendation in the White Paper was taken.
    Today, the Government have for the second time put these Commission documents on the Order Paper. I submit that, although it is strictly in order in terms of procedure, it is not in the best interests of proper debate or within the democratic traditions of this House.
    Therefore, I protest once again. I hope that the Government will not move these documents, so that they may be taken separately, though together, and properly debated on their own merits on another occasion.
    Mr. Speaker: The moving of motions dealing with the documents is not a matter for me. As for debating them, they cannot be debated together without the approval of the whole House.

    1021
    Before I call the right hon. Member for Finchley (Mrs. Thatcher), may I say a word about the state of my list of speakers. Although the debate yesterday began on time, only 17 back benchers spoke, and some speeches could have been equally effective if they had been shorter. I have more than 50 right hon. and hon. Members who wish to take part in this debate. I hope that right hon. and hon. Members will make their speeches shorter.
    3.38 p.m.
    Mrs. Margaret Thatcher: Yesterday the Prime Minister opened the fourth major debate in 14 years on Britain's membership of the EEC. On each of the first three occasions the Prime Minister began the day as an enthusiastic advocate of the cause that his Government were proposing. This time the Prime Minister chose to open with a very low-key speech leaving out most of the broader issues or dwelling on them only briefly.
    We are aware of the right hon. Gentleman's problems. If we were not aware of them yesterday, we have been made aware of them in Question Time today. At present he has to rely more on his political opponents than on his alleged political friends to secure the decision which he considers right for Britain.
    It has been suggested in some quarters that my party might find it tempting to withdraw support in order to embarrass the Prime Minister. But we have voted consistently for Britain in Europe by a large majority and would not think of performing W-turns on this issue.
    In 1961, when the right hon. Harold Macmillan first came to the House with the idea that we should make an application to the Common Market for membership, the Labour Party was lukewarm in the debate. Indeed, it did not vote upon the main question. On that occasion the Conservative and Liberal Parties voted 313 for the application. There were only five votes against, of which one was Conservative.
    In 1967, when the Prime Minister made his application, 488 hon. Members voted for the application, and only 62 against, including 26 Conservatives.
    1022
    In 1971, on the result of the application, 356 hon. Members voted for it and 244 against, which included some of ours.
    Throughout, our record has been consistently that the vast majority of the Conservative Party have voted for the European idea in support of making applications, even when some of the right hon. Gentleman's party did not vote in support of the first application, and again we have supported the idea of Britain in the European Community.
    The Prime Minister dealt mainly with the renegotiations and the Labour Party manifesto of 1974. I do not believe that this issue will be decided on those matters. The results set out in the White Paper are difficult to assess and very complicated. I believe that the matter will be decided on the broader issues associated with membership, and it is this argument which I propose to deploy today. I will deal, first, with the case for being in the Common Market, then the case for staying in, and finally the alternatives.
    First, the case for being in the Common Market. I believe, with a number of hon. Members who spoke yesterday, that the paramount case for being in is the political case for peace and security. It is taken for granted now that Western Europe, which has been the centre of troubles within our lifetime, will not embark again upon its own destruction. I think that we should not too readily take that for granted but for the tremendous efforts and constructive purpose which have led to those nations working together in the Common Market.
    One of the measures of the success of the Community that we now take for granted is essentially security. I think that security is a matter not only of defence but of working together in peacetime on economic issues which concern us and of working closely together on trade, work and other social matters which affect all our peoples. The more closely we work together in that way, the better our security will be from the viewpoint of the future of our children.
    I believe that people today recognise two quite different needs. First, there is the need to be part of some smaller group to which we can belong and feel and know we belong. We see that daily in a certain amount of revulsion against

    1023
    size. [Interruption] I hear sounds coming from a certain direction. The country with perhaps the greatest devolution of power—Germany—is one of the most active members of the Common Market. So there is this need which we must all recognise and take into account in our policies and in the institutions which we fashion.
    The second need is the knowledge that it is only when we get and work together that we can achieve the larger objectives which we arc seeking to achieve. It seems to me that the prospect of the Common Market fulfils both those needs —the need to identify with one's own nation and country and the need to work together as a community and an alliance of nations for the well-being and betterment of mankind.
    Mrs. Winifred Ewing: May I take it from the right hon. Lady's remarks that she supports the view that powers should be devolved to Scotland equivalent to the powers of the Bavarian Parliament?
    Mrs. Thatcher: The hon. Lady would be unwise to conclude anything of that kind. The Conservative Party has always stood for genuine devolution of decision making. I am sure that the hon. Lady will be interested to know that the letters which I get from some people in her country say that Edinburgh is just as remote as London. The hon. Lady has not been here as long as I have. That sounds rather like the Prime Minister. I must not fall into his ways too soon, but I admire his instinct for self-preservation.
    I believe that these two needs are met by countries being in the Common Market and working together for the larger purpose. Therefore, my first reason for believing that we should be in the Common Market is peace and security.
    The second reason concerns what I believe to be most important—access to secure sources of food supplies. We had quite a lot of argument and debate yesterday about food in the Common Market. I think that we have to view that against the background of the world's food reserves and the amount of food that this country needs to import. We need to import at least half our food to survive. Taking into account the import of fertilisers and foodstuffs, it comes slightly
    1024
    above the 50 per cent. mark. The figures were given in the Lubbock Memorial Lecture at Oxford recently.
    Against the background of that need we must remember that the world's food reserves are now smaller in proportion to its consumption than they have ever been. We now have to live from the products of one harvest to the products of the next. The reserves are not sufficient, or the same, as they used to be in the past. In these circumstances, it is only prudent and sensible for the Government to obtain steady access to the Community, which could be self-sufficient in many agricultural products, and which, because of its combined bargaining power, is in a far better position than any single country to negotiate with the rest of the world.
    We are the most vulnerable country with our need for food imports. Therefore, it is vital that we secure access to continuous and good sources of food supply. In some years supplies from the Continent will be more expensive; in other years they will be cheaper. But the great benefit is access and greater stability of supplies.
    Obviously we had some debate about prices. I notice that the White Paper is very modest in its claim. But undoubtedly the common agricultural policy has not had the effect upon food prices which many opponents of the Market thought it would have. One has only to look at the latest official Government reply in Hansard of 17th March to see that the Secretary of State for Prices and Consumer Protection said:
    "the overall level of food prices in the United Kingdom is not at present significantly affected one way or the other by our membership of the European Community."—[Official Report, 17th March 1975; Vol. 888, c. 1125.]
    The right hon. Lady took the general overall picture. Of course, some commodities are up and others are down in price.
    Mr. Norman Buchan: Does the right hon. Lady recognise that there are two points here? First, it is irrelevant to the comparison whether the CAP has put up prices or not, but it has. [Interruption] The right hon. Lady was making the point that the CAP had not put up food prices and she used this answer to prove it. It does not prove it. The CAP did put up our food prices.

    1025
    Secondly, on the comparison that the right hon. Lady was making, all the major commodities—beef, lamb, butter and cheese and all the grains, including wheat and maize—are dearer than outside the Common Market. The answer and the White Paper are wrong and totally out of date.
    Mrs. Thatcher: As far as 1 can see, what the hon. Gentleman is saying is that the EEC prices did not put up food prices in this country but the CAP did. I should not like to argue that from a public platform. I prefer to take the official Government reply, which I believe is correct—that the overall level of food prices in the United Kingdom is not at present significantly affected one way or the other by our membership of the Community.
    The third main reason why we should belong to the Community is that it is the largest trading and aiding unit in the world. It is larger than the United States; larger in the amount of goods which it imports than the United States; larger than the United States in aid. It is a very great advantage for this country to be a part of that very much larger trading bloc. This has become very obvious to other countries. We can appreciate that by looking at the number of them which wish to negotiate direct with the Community, no longer so much with the separate countries. Country after country wishes to obtain access to the Community itself, to the most powerful market in the world. They are far more interested in the Community than they ever would be in supplying us alone.
    Furthermore, as time goes on we are more likely to get access to the raw materials we need to fabricate our exports through bargaining as part of a community than we are ever to achieve by bargaining on our own. It is part of the same economic argument. One needs access to secure supplies of food; one needs access to secure supplies of raw materials—particularly if one has to import them to survive.
    At present, on the trading point, half of our trade is with Western Europe as a whole. Through our membership of the Common Market we have preferential access to all those countries, which we should not otherwise have. Those countries comprise our eight EEC
    1026
    partners, the seven remaining EFTA countries, with which we have free trade agreements by virtue of belonging to the Community, and Greece, Turkey and Spain, which have Community preferential agreements. Therefore,. on the broad strategic trade and aid argument we have preferential access to Western Europe, with which we conduct 50 per cent. of our trade. I doubt very much whether we should be able to get that on our own.
    Yesterday we had a good deal of argument about the trade deficit. Indeed, the hon. Member for Renfrewshire, West (Mr. Buchan) had a good deal to say about that, as indeed had the right hon. Member for Battersea, North (Mr. Jay). The Minister of State for Foreign and Commonwealth Affairs, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), substantially answered the question last night, but unfortunately —[Interruption] I said earlier that the Government had more friends on the Opposition side of the House than on their side. I am being proved right with almost every interjection.
    On the trade deficit we were challenged. What right hon. and hon. Gentlemen did not say was that about four-fifths of the trade deficit came from the supply of about five different commodities to this country. Had we not bought them from Europe we would have had to buy them at the same or increased prices elsewhere.
    First, on food, including dairy products, which we bought from Europe because many of the products were lower in price than they were in our traditional markets, to substitute our traditional markets for Europe would have meant that the adverse balance would have been worse than it was. Secondly, fuel accounted for part of the deficit. Because of the increased oil prices, we bought fuel products from the EEC—we had to buy some of them because of lack of refining capacity—and they went up in price, so that was a neutral factor in relation to the deficit. On plastics and steel we had an adverse balance. Again, we had to have some of these commodities because we could not supply them. We could not supply the plastics partly because of the Flixborough disaster, and we could not supply the steel because the British Steel Corporation was not able to supply enough last year. If we had not got

    1027
    those supplies from Europe we should have had to buy them elsewhere.
    On all of these things, membership of the Community did not have an adverse effect on our balance of trade; in fact, it helped us, in so far as some of these things cost us less in Europe than they would have cost elsewhere. [An HON. MEMBER: "What about the balance of payments?"] The balance of payments is worse under the present Government than it has ever been under any other. Furthermore, we are borrowing more under the present Government than we have ever borrowed under any other.
    The fourth main strategic reason for us being in the Common Market is to provide a world role for Britain. We on the Opposition side of the House have always attached great importance to a world role. On our own, as a nation of 55 million, we would have some voice, but not enough. Traditionally, Britain has always been part of a larger grouping, and was listened to partly because of that grouping as well as because of our own particular attributes. It used to be the Commonwealth, but since then most of the Commonwealth countries have become independent and have set up their own trading preferences and arrangements. That did not happen only after our accession to the Common Market. For years and years the Commonwealth preferences were being eroded, as those of us who tried to sell to many of the Commonwealth countries knew. Naturally, they set up their own industries, and naturally they protected them in the early stages. That meant that steadily our markets were closing down. I watched that process year after year. It became vital that as those markets closed down, so we should be able to open up markets of equivalent or greater capacity elsewhere.
    The Community opens windows on the world for us which since the war have been closing. It is already strong and already a major influence in the world.
    Those are the four big strategic points for being a member of the Community. They are as strong now as they ever have been.
    There are also additional points now for staying in the Community which perhaps did not exist at the beginning. First, the Commonwealth itself now wants
    1028
    us to stay in. I know of no adverse comment on this matter. All the comments that have been made, whether by the Prime Minister of Australia, the Prime Minister of New Zealand, the Prime Minister of Canada, the Indian Minister of Commerce, or the Jamaican Ambassador to the United Nations in New York, have been to the effect that they wish us to stay in. This is indeed a further powerful reason for staying in.
    The second reason is that we can begin to quantify some of the benefits. The document produced by the Britain in Europe Group, which sets out 176 examples of grants and loans made in the last two years by the Community institutions to this country, is most effective. It sets out specific examples of grants and loans totalling some £290 million, which have gone all over the country.
    Mr. E. Fernyhough: How much is loan and how much grant?
    Mrs. Thatcher: The grant is £89 million and the loans are £200 million. That leaves out of account £176 million paid from the guarantee section of the Community's Agricultural Fund.
    One can point to a large number of tangible benefits in the form of grants coming to this country. The right hon. Gentleman the Leader of the Liberal Party enumerated a number of separate items yesterday. They vary from very large grants of some £34 million or £35 million to small grants such as grants to the families affected by the Flixborough chemical plant explosion. The EEC gave grants to the planners and grants to agriculture. It gave one grant after another to which one can point; and, of whichever area one is speaking, all this came from the EEC.
    Another reason for staying in is that our partners have done everything possible to be both co-operative and constructive. It has been noticeable how they have helped this Government through all their renegotiation difficulties. I believe that on the whole the Prime Minister and the Foreign Secretary did a good job in the negotiations, and so far as they have obtained improved terms we are delighted and hope that those, too, will help to keep Britain a member of the Common Market. My right hon. Friend the Member for Penrith and the Border (Mr. Whitelaw) said yesterday

    1029
    that he believed that renegotiation is a continuous process. It was my right hon. Friend the Member for Knutsford (Mr. Davies), I believe, who described the Common Market as almost a non-stop negotiating machine. Of course, that is likely to be so in any community which is an organic, living community. It is constantly developing the whole time, constantly responding to the interests of its members.
    The right hon. Member for Jarrow (Mr. Fernyhough) indicated a moment ago a certain amount of scepticism about the total amount of grants and loans, but it is quite clear from the White Paper that our calculations, made two or three years ago, about the effects of the Common Market on our Budget were wrong. It is equally difficult to try to make precise forecasts of the sums involved here when we are looking to the future. All we know is that the figures given in the White Paper show that this year, when we were expecting to pay a net contribution of some £165 million, our net contribution turned out to be only £31 million; so our calculations were wrong. The result has been that we have contributed far less to the Community budget than we had expected to contribute. That is another plus for Britain.
    On the common agricultural policy, despite what the hon. Gentleman has said, that has not had as adverse an effect on world food prices as he and some of his hon. Friends, and a number of other people, feared at the time it was negotiated. But, in fact, there are very good reasons for believing that the agricultural policy will gradually become more consumer-oriented than it has been in the past. It is natural that as a country has fewer people working in agriculture and more working in the manufacturing industries, its policies will become more directed towards the consumer than towards the agricultural producer; but I and a number of my hon. Friends would hold very strongly that those who work in agricultural production should get just as good a living as those who work in producing manufactured goods.
    Another good reason for staying in is the effect that there would be on investment and jobs if we were to pull out. Again, this is very difficult to quantify.
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    Obviously, quite a number of multinational companies will prefer to invest in Europe rather than here if we are not a member of the Common Market. A number of companies here have already indicated that they feel that if we were to withdraw there would be a loss of jobs. Firms like GKN, Lucas and Vauxhall, and a number of people in the chemical industry, have indicated that if we were to withdraw investment would not be forthcoming here; and in their view it would have an adverse effect on jobs.—[Interruption] I assume that the hon. Member for Bolsover (Mr. Skinner) is interested in getting investment, even overseas, if it helps us to provide jobs in areas where jobs are needed.
    Mr. Frank Hooley: Is not the right hon. Lady aware that in 1973 the outward flow of industrial capital, or capital for investment, from this country to the Common Market countries was £400 million while the flow the other way was only £50 million?
    Mrs. Thatcher: I think the hon. Gentleman is trying to accelerate new investment towards the Common Market and away from this country. The position is already difficult. We should not try to make it more difficult still. We want more investment here and are quite happy for multinational companies to come and invest, particularly in areas where we need jobs.
    The last reason for staying in is that it would be traumatic—to use the Foreign Secretary's own expression—to come out. When we went in we knew exactly what we were going into. We had had very powerful negotiations, under my right hon. Friend the Member for Sidcup (Mr. Heath), over a period of two or more years and knew exactly the conditions we were to face when we went in.
    If we were now to withdraw, it would be a leap in the dark. We should not have any idea of the trading conditions into which we were coming out, or of the effect on sterling. It is not a genuine alternative. A genuine alternative would be to have two sets of negotiations and choose between them; but that would not be possible. We knew what we were going into because of the careful negotiations. If we withdraw we have no idea of what alternative trading arrangements we shall be able to secure. Quite a

    1031
    number of people have made a different suggestion, that perhaps we could return to EFTA. We are already a member of the free trade area by virtue of being a member of the Common Market; and if we were out every EFTA country would have to secure EEC permission because of the free trade agreements. Secondly, we would be a market of only 40 million, which is hardly comparable to a market of 200 million in the EEC. Thirdly, agreements on EFTA are particularly tough on rules of origin, and those in themselves, in the way they operate, could have an adverse effect on some of our trade, particularly in motorcar components.
    Having been through some 60 pages of the rules of origin one understands the difficulties associated with them. As hon. Members will know, there are provisions covering certain sensitive products in EFTA agreements under which tariff barriers have gone down, particularly in textiles, with the EEC. Those barriers would be erected again. So even if we could get into EFTA, that would be no answer to our problems. A second alternative would be to have a free trade agreement with the Community. The first thing that occurs to one on this is that a time when one has just broken a treaty is not, frankly, the best time to ask for another, particularly when one is a country of a similar size to other countries in the Common Market and one's products are such that one competes with many of the others.
    Many people may say that Norway did so, but she got agreement before she went in; and Norway is a market of only 4 million people with an economy quite different from ours. Any such arrangement would require protracted negotiations which would probably follow the general lines of those agreed with other EFTA countries, and again there would be sensitive products. Secondly, the clauses and articles dealing with State aid to nationalised industries are, if anything, slightly tougher in the free trade area agreements with the EEC than they are in the initial EEC agreement. That EEC agreement specified certain grants that were compatible with the treaty. The free trade area agreement does not repeat those particular grants; and, as I have said, it is slightly
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    tougher on State aid to nationalised industries than the EEC treaty ever was.
    Mr. Douglas Jay: Does not the right hon. Lady realise that if we withdrew in that situation over the broad area of industrial goods this country would really be in a free trade relation with both groups and, therefore, all we would be abrogating—[Interruption] Well, if hon. Members do not understand that they do not understand the basic facts. In that situation the onus would be on any other country to alter the status quo and take the initiative in raising tariffs against us. Does she really think that that is likely to happen?
    Mrs. Thatcher: The right hon. Gentleman is taking a virtually unique view in thinking that he can select certain parts and not others, that he can just opt out of the agricultural part and keep the free trade area part. But if we abrogate a treaty we abrogate all the treaty and then have to start negotiating again. I see absolutely no grounds for believing that one can get exactly those bits one wants while taking none of the others which do not happen to suit one.
    Mr. Jay: Does the right hon. Lady not realise that the EFTA countries are now in exactly that position of industrial free trade without the Common Market obligations?
    Mrs. Thatcher: The EFTA countries negotiated their own particular treaties with the EEC. We have no such treaties. We should have to start the negotiations all over again. We do not have such a treaty and we do not know whether we would get it. The time to ask for a new treaty would not be when we had just broken the old one. As the right hon. Gentleman knows, those EFTA countries which are steel producers had to promise to align their steel prices with those of the Community without consultation. There are also certain other restrictions on fishing which were applied to Norway, although I agree that fishing has not yet been fully resolved in the treaty.
    The choice is whether to be outside the Community and yet have to accept everything which it decides on trading provisions, including standards and safety provisions and prices of steel, or whether

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    to stay in the Community and have an influence over all those decisions which will seriously and closely affect the whole of our industrial life.
    Mr. Ron Thomas: Is the Leader of the Opposition suggesting that the EEC will prejudice its £2,000 million balance of trade surplus with us simply out of pique and erect trade barriers and become the inward-looking club that many of us feel it is?
    Mrs. Thatcher: What I am suggesting is that the hon. Member has absolutely no grounds for assuming that we should get a free trade area agreement with the EEC when it has made strenuous efforts to meet all our requests and demands to keep us in the Community. I believe that the hon. Gentleman wants to accept those parts of the treaty which suit him and forget about the rest.
    I hope that our economy will soon be in better shape and overcome the adverse balance of trade, and I am sure that the Prime Minister shares that view. We cannot assume that we would have an alternative area to go to, and the result may be that we should have to go it alone. There being no certain alternatives, it would seem that we have very carefully to consider keeping the arrangements and agreements we already possess before going completely into the unknown. Being in the EEC will not, of course, solve all our economic problems, or anything like it. Some of them are home grown and have to be dealt with by us. There are the problems of inflation in particular which we have to cope with ourselves, whether we are in or out of the Community.
    For Britain to abrogate a treaty is bad for Britain, bad for our relations with the rest of the world and bad for our future trading relationships. I believe that Britain has always played a major role in the world and still has a major role to play. I do not believe it can play that role to best advantage on its own, and if we wish to give our children maximum peace and security in a very uncertain world, our best course of action is to stay in the Common Market.
    4.14 p.m.
    Mr. Brian Walden: The Leader of the Opposi-
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    tion began, very properly I am sure, with a tour d'horizon of what we had or had not done in the past and of who had voted for what and who had not. I would be the first to accept that if she is trying to contend that the very heart and core of the anti-Market case lies within the Labour Party, she is right. I am sure, however, that she will not misunderstand me when I say on this issue that we all have to accept some strange bedfellows. I hope she will not feel too disappointed in having to agree with my right hon. Friend the Prime Minister on this issue, whether he is low key at present, as she alleges, or whether he is enthusiastic, as she claims he was in the past.
    The side I support happens to comprise the majority of the Conservative and Liberal Parties in the House of Commons, plus the CBI, the NFU and Sir Oswald Mosley. But, then, my hon. Friends who disagree with me are in no better position. They are supported by the nationalist parties, the right hon. Member for Down, South (Mr. Powell), the Communist Party and the National Front. Which of us is the more motley crew is a moot point, so moot that I think it much better not pursued. It would be wiser of us all on the Labour benches to assume that, for what seem to us as individuals good and sufficient reasons, we have arrived at our views without fear of guilt by association.
    On the issue itself, I have never pretended in the past, and I do not pretend now, that I regard this as the most important issue facing the country. I do not. Among a number to which I could give a higher priority I cite just one. Should we or should we not preserve a mixed economy? To my mind that is an unresolved philosophic and practical dilemma for my party and one which will have the most profound significance upon British society. However, even there there is some chance of compromise. After all, one may support a mixed economy but dislike the present mix. On the EEC, as we now stand, all hope of compromise has gone. Time has run out. There are no more expedients left for deferring a decision. This week the House of Commons must say "Yes" or "No", and later the electorate will have to say "Yes" or "No".

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    Although I am enough of a politician to dislike seeing bridges burning behind me, temperamentally I would far sooner make a decision than postpone one and I am glad that we have reached the point at which we have to decide. I believe that our present uncertainty on EEC membership weakens us in several crucial spheres, particularly financial and economic. We need to decide our future and to get on with it. This country cannot go on being a coy and cool friend of our European partners. We either dissolve the partnership or we make a wholehearted attempt to have a success with it.
    Naturally I draw a very clear distinction between entering the EEC in the first place and deciding to leave it now. It means not only that the United Kingdom would unilaterally renounce a treaty that it has so recently signed—and make no mistake about it, our credit in the world stands not upon such a pinnacle that we can lightly do that without regard to the consequences. It also implies that few of us can see no logical distinction between being opposed to entry and wishing to leave after having joined. I would be sorry to believe that that were so. However, listening to yesterday's debate. I noticed that the Leader of the Scottish National Party, the hon. Member for the Western Isles (Mr. Stewart), several times referred to joining the EEC as though we had not already joined. The profound wish in many hearts that we had never joined cannot undo the fact that we have.
    That is the reality of the situation. A die has been cast. A destiny has been determined. We can certainly try to undo it, but let nobody suppose that that is much the same thing as never having joined in the first place. It is supremely different—indeed, so different that a unique constitutional device has had to be contrived to try to circumvent the wishes of Parliament, a Parliament which not only voted to join in the first place, but which everybody knows will vote on Wednesday night even more decisively to stay in the Market.
    A constitutional dodge, associated previously only with Professor Dicey, a stone-blind reactionary who wanted to use it against home rule, has had to be devised in order to get us out of a situation that the House wishes us to be in. In
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    that respect, if in no other, coming out is profoundly different from joining in the first place.
    I hear it argued that our experiences within the Common Market have been so appalling that any expedient would be justified to get us out. What are these appalling experiences? They are usually related to our trade deficit with Europe. The logic of that case escapes me entirely. Is it suggested that we leave the EEC and then cease to trade with the EEC countries? I assume that the proposition is that we should set up a free trade area, in which case we shall go on trading with EEC countries, and the deficit will stay exactly where it is until we do what we ought to have done long ago, and will in the end have to do, namely, submit ourselves to the disciplines and sacrifices that will put our own house in order.
    The problem on the trade deficit side is that we are responsible for the way in which we regulate our economy and produce those situations. I agree completely with the analysis by my right hon. Friend the Prime Minister of this matter. I only wish that I could see more will to resist the current madness which at the fiat of over-mighty subjects robs us of any option except inflationary money-printing on the one hand and deflation and unemployment on the other, as the only things that we are allowed to do because of the prison that this movement has allowed itself to be shoved into. When we do something about that, we shall see some impact on our trading deficit with Europe. That is where the shoe pinches. There will be no escape from the hard choices involved. Economic management is a uniquely high priority. I fear that it will become a crisis and that there will be no escape.
    I do not deceive myself that the argument in the country will be conducted mainly on economic policy—not a bit of it. There were kind but naive friends of mine who assumed that when we drummed up the seven points for renegotiation, none of which directly mentioned sovereignty, that would mean that everybody would play fair and that the antiMarketeers would not bring up the sovereignty issue, because it was not in the manifesto.
    Mr. Spearing: It was.
    Mr. Walden: If my hon. Friend looks at the seven points for renegotiation he will see that sovereignty, if mentioned at all is mentioned in the most marginal sense. It will be the keyboard upon which all the high notes in the country are played.
    We are told that our sovereignty has been undermined. Let us examine that proposition, because that is the core of the case against my right hon. Friend the Prime Minister's proposition. As I believe that the onus lies on those who wish to make the change, let us look at the core of their case, especially in relation to my own party. It surely cannot be national sovereignty that is worrying my hon. Friends. It is perfectly proper that the right hon. Member for Down, South should portray himself as a thoroughgoing nationalist, because that is what he is. I have no doubt that he will stir many hearts with reminiscences of vice-regal splendour, and that he will chill a good deal of blood with talk of the aliens without and the aliens within our society. It is entirely open to him. He has always, or at least in recent years, expressed those views.
    Is this supposed to be the traditional posture of the Labour Party? I had assumed that we were an internationalist party. Although it is an important function of internationalists to extend the hand of friendship to those who despise and detest our system of government, there must be just a little tiny corner in our hearts for those who actually approve of it.
    Therefore, I take it that the Labour Party is not particularly worried about national sovereignty. So the problem must be, as we have been told, parliamentary sovereignty. I must say that I am much encouraged. Events of recent years had tended to conceal from me the depth of affection in which parliamentary sovereignty was held by the strong antiMarketeers in the Labour Party. I knew that some of them felt it, but I had been misled into believing that that feeling was not entirely universal. I now see my mistake. Parliamentary sovereignty is what they really care for.
    Unfortunately, for my sins, I am of a somewhat sceptical turn of mind. Therefore, I ask myself certain questions. First,
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    I wonder whether the reality of the threat to parliamentary democracy does not lie within our bounds rather than in Brussels. If parliamentary sovereignty is a priceless jewel to be preserved unflawed, why are we having a referendum at all? The referendum is the most brazen affront to parliamentary sovereignty in my lifetime.
    I will say something else which will not be the least popular but which needs to be said. If we are to be told about the value of parliamentary sovereignty, let me ask some of my hon. Friends this: if the will of Parliament is now so vital to them, if parliamentary sovereignty matters so much to them that they cannot bear to see it abridged by any regulation, why was it that instead of campaigning to change the law, which is proper, so many of our party when in Opposition wished to, and did, defy the law, which was the will of Parliament and therefore the very embodiment of parliamentary sover eignty? Where were the doctrines of parliamentary sovereignty then, and who was having recourse to them then?
    Some of us who really believe in parliamentary sovereignty, against all its challenges, have felt lonely people in the Labour Party in recent years. [AN HON. MEMBER: "My hon. Friend is not so lonely now."]—I welcome the change, although I do not need to be told that no man should come here as a delegate from the massed party of the country, that no man should suffer himself to be mandated by the general management committee of his party, that no man should place any outside responsibilities against his parliamentary judgment. I accept all of that. But it seems to me that the right place to exalt parliamentary sovereignty is not in Brussels but in Blackpool during the month of October.
    I could be asked "That is all very well but, flagrant though the offences against parliamentary sovereignty have been from within our society, does that change the fact that membership of the EEC has further abridged it?" No, it does not, and there is no point in pretending otherwise. But surely the Foreign Secretary must be right when he points out that the reality of the EEC is that what a member country finds insupportable it is not

    1039
    required to support. Does anyone suppose that the late President de Gaulle—or, for that matter, even the present President, M. Giscard d'Estaing, who is somewhat different both temperamentally and in his opinions—lay awake at night wondering about the portentous threat to French sovereignty posed by membership of the EEC? Of course they did not. I am very fond of the French, and I am especially fond of Paris, in more than one way, and I am not being rude to them when I say that they are stubborn realists. It is a bit more realism that we need on this matter. Realists know that the EEC can, does and must take account of national political situations. If the French and the Germans, or for that matter the British, find some formulation of the Brussels Commission politically unacceptable—
    Mrs. Millie Miller Mrs. Millie Miller (Ilford, North)rose—
    Mr. Walden: The trouble is that if I give way I shall prolong my remarks, but for the hon. Lady I will give way.
    Mrs. Miller: I should like to refer the hon. Gentleman to one of the problem countries of the EEC, Italy, which at this very moment is living in fear and trembling of new regulations being introduced not by the Council of Ministers but by the Commission on Agriculture, against which there is no veto. I wonder how that affects his argument.
    Mr. Walden: I take my hon. Friend's point although I am not at all sure that the regulations will have the impact she supposes. I am bound to say that if I were an Italian it would not be fear and trembling of Brussels from which I should be suffering but fear and trembling of the incompetence of my own Government.
    I find it crass to suppose that these regulations are simply imposed without further ado against enormous national protest, that treaties are brandished and people are told to go away, keep quite and simply obey them. The EEC countries are democracies, and democracies are led by democratic politicians who have to placate annual conferences and win elections. It is a very strange idea that these chaps do not understand the problems of other politicians. Of course they do.
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    The whole history of the EEC is of compromise and accommodation. Where a particular problem is found to require different solutions in different countries, a formulation is always devised which enables that to take place. Of course a text-book formulation of the EEC may well frighten the apprehensive, but a textbook formulation of our system bears very little relation to what is happening at present, to say the least. It does not even wholly identify the true centres of power. We need some new text books, but in the meantime we might make up the deficiency by being a bit more realistic and a bit less apprehensive.
    I do not find the case for leaving the EEC to have been made, and I think that the onus lies on those who now wish to take us out to show quite conclusively the benefits that this will confer on the British people. For my part I cannot see those benefits and, although I hope it will not, I think that the anti-Market campaign will in the end, when it gets out into the sticks, degenerate into narrow nationalism, the plea for a siege economy, for Socialism in one country. I was never very enchanted by the rhapsodies of the Eurofanatics but I certainly prefer their version of the future to that grim and barren alternative which it seems to me the anti-Marketeers will end up with.
    The rational answer, and certainly the one that would suit me best, is to say that one might as well stay with an established and, when all is said and done, none-too-onerous arrangement, the leaving of which at best would be disruptive and at worst might give our fragile economy that final push over the precipice; and, if it goes, then there goes with it the worthwhile society that it supports.
    4.36 p.m.
    Mr. John Davies: The trouble about this debate is that as it proceeds one is confronted with the fact that very much of what one has prepared to say has already been said much better by somebody else. I find this is particularly so in the debate on the European Economic Community which, since I have been in this House, has seen a good deal of discussion over the years. One is in some difficulty in trying to reconcile one's own prepared oration with the exigencies expressed from the

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    Chair to observe brevity which I will seek to do, and at the same time not to fall into the hazard of producing a totally dislocated statement. I will try to bridge these various gaps, no doubt with some deficiencies.
    I should like to follow the hon. Member for Birmingham, Ladywood (Mr. Walden), in his scintillating speech, and in the first place on the subject with which he dealt in terms of the various sovereignties which have been under consideration in the country and within this House. I agree with him that a good deal of nonsense is talked about sovereignty, but there is no doubt—and I can have no doubt of it myself, after even so brief a period as I have spent in this House—that the issue of parliamentary sovereignty, the ability that this House commands to have under review all the major issues that affect the future of the country, to express its opinion, to give its guidance and where necessary to impose its discipline, is of fundamental importance in the way this country is run. I accept that I understand it to be the case. In the time I have been in the House, I have always heard it so expressed by my right hon. Friend the Member for Down, South (Mr. Powell), and I have respected his statements on it.
    But I am bound to say that, in the same way, my own brief experience of this House has not led me to suppose that the House itself exercises a remarkable degree of pressure or effect upon the passage of legislation as it emerges through the House of Commons.
    I wonder how many hon. Members had the opportunity of reading an article by the hon. Member for Basildon (Mr. Moonman) in The Times some time ago on the question "A time to talk and a time to act". He said something which has been my personal experience of the way in which this House is operated in terms of its legislative process. He said,
    "…the fact is that, by the time a Bill comes before the House, no matter how unclear its intentions or how badly drafted, any amount of discussion will rarely shift emphasis or intention, for it already embodies hours of consultation with outside interests and Civil Service preparations which no government will willingly see repeated."
    I must say that both as a Minister and as a back bencher in this House it has
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    been my experience that the degree to which this House can shape and frame legislation upon which the Government have already spent an immense amount of time is small. Therefore, whether the legislation be of a domestic or Community nature, the House must find a means of scrutinsing it within its own capacity, subject to the sort of restrictions which the hon. Member's article clearly implies.
    The means adopted in the House of scrutinising European legislative proposals have proved to be not ineffective. It is interesting to recall the occasions in recent years when the expression of opinion of this House on Community legislation seemed to have a positve effect on the conduct of Ministers. It is curious that that has happened particularly with regard to Community proposals.
    We can recall our discussions about juggernauts and the effect which the pressure that the House put on the then Minister of Transport had in the conduct of his affairs in Brussels. We can think of the question—my right hon. Friend the Member for Down, South will recall it very well—of the powers of summary arrest in the event of non-compliance with certain vehicle insurance requirements. The pressure exercised through this House undoubtedly had a powerful effect on the Minister concerned. My hon. Friend the Member for Banbury (Mr. Marten) will recall his contribution to a discussion on the system of vehicle driving licences, the way in which they were provided and the age at which they could be granted. He cannot doubt that that discussion had a profound effect on the Ministers dealing with that matter.
    The methods which have been used have had precisely the effect which I believe the House most usefully can exercise, namely, of impressing on Ministers before they take action the feelings of the House about the measures contemplated. The methods which we have adopted to deal with European matters have not been ineffective. Indeed, I wonder whether they might be more widely applied to domestic legislation.
    A Green Paper embodies a large degree of resolution which is, to all intents and purposes, immutable. Would it not be of interest if a Select Committee or Select Committees were to consider Green

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    Papers and gave the House their opinion on the suitability of the measures proposed or contemplated? Green Papers are the subject of discussion with outside bodies, and if the House and individual Members wish to contribute to those discussions they do so. But normally they are not subject to the sort of scrutiny which is devoted to Community legislation. It would be interesting if that were done.
    Therefore, on the issue of sovereignty, there is little that can be said to show that the legislative capacity of the House has been or is being severely undermined by the Community institutions.
    Mr. Spearing: Does the right hon. Gentleman agree that, despite the truth of what he has said, when the Government are considering future legislation and advisers are advising Ministers about certain courses of action, it is almost certain that they will not advise courses of action which will conflict with Community policy? Therefore, not only would the direction of the legislature be governed by the direction in which the Community was going, but the House would not be given the option of discussing the merits of the wider options.
    Mr. Davies: I very much doubt whether that is so. The Community proceeds, not solely by a series of proposals, but, as the hon. Gentleman knows very well, by a wide range of consultative documents which, broadly, precede the development of proposals in instrument form. Therefore, the House has the opportunity—and it should exercise it—to discuss these matters when they are in a much more formative stage than is normally the case.
    I turn to the question of food and the common agricultural policy. I do not wish to repeat what has been said by my right hon. Friend the Leader of the Opposition today. However, in the adverse remarks made about the common agricultural policy—and, regretfully, I think there will be a period of dearth rather than of plenty in world supply—little has been said about the real interests of the farming industry. I regret that deeply. The common agricultural policy is not least an instrument whereby the preservation and health of the agriculture industry should be maintained.
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    This country decided years ago, perhaps without sufficient consideration, that it was wise to make a judgment about the number of people employed in the farming industry solely in relation to the economic criteria of the alternative employment in industry or elsewhere. But the agriculture industry is a vital part of the social structure of this country and of Europe. I am convinced that if we do not take determined steps—we are not taking them now—to protect and preserve our agriculture industry, we shall suffer greatly in terms, not simply of food production or of the means of feeding ourselves, but of the texture of our country, of our society, and, not least, of our environment. Therefore, I see in the CAP a means of ensuring that there is preserved in this Continent something which I believe is of the greatest value to it and the disappearance of which will be a matter for the greatest concern.
    I turn to the other principal area of discussion, namely, the economic consequences. The anti-Marketeers apparently blame Community membership for a degree of the deficit in trade which they believe is overwhelming any potential economic advantages which we may draw from the Community. That argument has been repeatedly exposed in the past two days.
    Mr. Fernyhough: Does the right hon. Gentleman agree that every ministerial statement leading up to our taking the decision to join the Common Market pointed out that capital would flow to this country like water flowing down the mountainside and that our trade would increase tremendously? Does the right hon. Gentleman also agree that none of the rosy pictures which he and his colleagues painted has turned out to be true?
    Mr. Davies: I was always of the opinion, and said so, that the purely technical effects of tariff abatement were bound to operate more favourably in relation to the then Community countries than to us at the outset. No one could have presumed that this country would be in its present parlous economic condition at the time that forecasts of these matters were made. For 18 months at least this country has been grossly over-consuming and grossly under-producing. The effect of those contrasts is to induce an overwhelming propensity to import.

    1045
    Whether those imports come from Community countries or elsewhere, the cause is here and nowhere else and the remedy is here.
    I agree entirely with what the hon. Member for Ladywood said. It is absolutely futile to try to pin on to other people the causes of our own weakness, which we must remedy. Therefore, contrary to what the right hon. Member for Battersea, North (Mr. Jay) would have us believe, we shall not correct an intrinsic internal productive weakness by adopting a siege economy, with drastic import controls. We have to correct this ourselves. I apologise for responding at some length to the intervention of the right hon. Member for Jarrow (Mr. Fernyhough).
    What I have said so far represents, to a large degree, the defensive side of the argument that must be deployed. There is a major positive side which we must not fail to state. The whole renegotiation procedure is a fantasy which has the one advantage that it gives us cause and time to rethink our convictions. In facing the need to convince people of the dramatic and even tragic effects that might be brought about by withdrawal from the Community at this stage, we are forced to review our thinking and convictions on this matter, which have been generated over many years.
    As I look towards the next quarter of this century I realise that all the large issues we have to face cannot be faced alone. For instance, we are facing the end of a century in which the whole problem of access to primary resources, whether they be energy, food or other essential materials, is conditioned not just by a rate of exhaustion higher than the rate of discovery but also by political overtones which have a fundamental importance for our future.
    Whether we are thinking in terms of food, energy or essential metals, we cannot for one moment believe that we can necessarily guarantee ourselves either the safeguards or the deals necessary to preserve our position, with Europe, as one of the great transformation areas of the world. The Continent of Europe is not a continent of primary resources. Valuable though finds of oil and gas in the North Sea may be, they do not con-
    1046
    stitute a vital reversal of the resource patern of this Continent. Europe is a Continent of transformation and will remain so. To be such a continent Europe must be able to count with certainty, and on reasonable terms, on continuing access to supplies of a wide variety of materials. Otherwise we could easily find ourselves and for almost negligible values at times held totally to ransom in terms of our performance. Britain, as one country alone, is not equal to dealing with that problem.
    A second and no less major issue over the remainder of the century is the management of our technology, not just the ability to stay in the hunt in all the advanced fields of technology in which we have hitherto been high-level performers. From now on we may easily regress in this sphere unless we proceed in concert with others.
    There are other things to be borne in mind, for example, the handling of our waste and pollution. I wish to preserve a decent way of life and at the same time to create a more elaborate technology. I see problems ahead in trying to reconcile the preservation of human decency and dignity at work with the electronic control of so much of our activities. If we act alone without the degree of comprehension that goes with the Community, we shall not succeed. There are many other such spheres.
    The Lomé Convention is a great step forward. To use such an agreement not just as a means of transferring help to people but as a means of actively ensuring that there is growing capacity for developing countries to look after themselves and to support and aid that operation is a unique break through in terms of relationships between developed and developing countries. However, it is only a beginning. There is an immense amount to do, especially in relation to the problems of the continent of South-East Asia as they are accumulating today. Alone Britain cannot figure in dealing with that problem.
    During the next 25 years or so—and it may be longer—the question of the generation of an adequate monetary system will arise. Who can imagine that this almost anarchic floating arrangement between countries is a basis for sound industrial development? It simply is not

    1047
    and will have to be remedied. Who can imagine that the existing arrangements with regard to the law of the sea can be altered to suit our point of view if we are alone as an individual representative? We shall simply be a cipher and an insignificant voice if we so remain.
    For all those reasons and for all that lies ahead, I cannot believe that our vote tomorrow night will be anything but a strong affirmative, and I pray that it will be so in the country.
    4.56 p.m.
    Mr. Frank Hooley: I am an internationalist and for 30 years I have tried, in a modest way, to promote in this country the principles and ideals of the United Nations and an understanding of the great development of the international bodies which have grown up on the framework of the United Nations Charter.
    It is primarily because I am an internationalist that I am an anti-Marketeer. I reject completely the narrow concept put forward by my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden), that those of us who are opposed to the Treaty of Rome and who are opposed to the arrangements in Western Europe at present have no interest in international co-operation. It is the Europeans who are developing the narrow isolationist attitude, the narrow ethos of protectionism against world food trade, of special arrangements to a privileged small group of countries. That is the ethos of Europe.
    Those of us who reject that ethos do so because we want to see this country play a role in the genuine international organisations, the UN, the International Monetary Fund, the World Bank, the General Agreement on Tariffs and Trade, UNCTAD, the World Food Council and other bodies. These bodies are of importance to this country and we should be seeking to develop, enhance and strengthen them. It is the European Community concept which is hostile to these bodies and which, over the past few years, has developed an inward-looking approach to the great international problems that face us. The classic example of this is the common agricultural policy, which is the cornerstone of the EEC's economic arrangement.
    1048
    Let nobody suppose that the French Government would for one moment remain within the Common Market if anyone threatened the CAP. This is why the renegotiation on that point has been no renegotiation at all. The fundamental elements of the CAP are still there. It is a deliberate policy of discrimination against world food suppliers —it is a twentieth-century version of the Corn Laws—and a deliberate policy of dear food, which is contrary to the interests of our own people and to the interests of many consumers on the Continent.
    The system works this way. If prices in the world commodities fall as they are now falling—and falling significantly—the system of levies is designed to maintain dear food within the Common Market. If prices within the Common Market show any inclination to decline, the system of intervention buying is deliberately designed to maintain them.
    These two principles are totally unchanged by renegotiation. The White Paper does not seriously claim that they have been changed. The consequences for this country have been that whereas in the world market we could have bought beef, lamb, mutton, veal, cheese, butter and today wheat and maize, at a lower cost, we have been compelled by the system to buy dear. A more wicked and reprehensible aspect of the policy has been the deliberate creation of great mounds of stored-away food, deliberately taken from the consumer by the intervention policy. We have had the beef mountain and the butter mountain. We now have a vast surplus of wine and of dried milk. We have had the deliberate denaturing of wheat to make it inedible.
    The curious consequences of this policy is that the British taxpayer, about whom Conservative Members are so sensitive and concerned, is paying more under this system to keep food dear than he paid under our own system of deficiency payments to keep it cheap. If there was any condemnation of the policy, that should be it. Those, like me, who wish to see a genuine international trading arrangement, want to see an approach to worldwide food and commodity agreements which will in some respects resemble the Commonwealth Sugar Agreement.

    1049
    There are those who sneer at us and say, "Oh well, all you want to do is exploit the poor peasant in the West Indies, Fiji and Mauritius". Nothing of the kind. The essence of the Commonwealth Sugar Agreement was that it was a fair deal between the consumer and the producer. To the producer was given a stable market and reasonably stable prices. The consumer was given a fair price in the shops. It was a system that worked extremely well for 20 years and was welcomed by both sides. It was a system that was destroyed by our entry to the Common Market.
    Mr. Peter Temple-Morris: Has the hon. Gentleman heard of the Lome Convention? Is not the purport and effect of that aimed at the far-reaching goals at which the hon. Member worthily aims?
    Mr. Hooley: Not at all. I propose to deal a little later with the Lomé Convention and to draw attention to the considered judgment of the Overseas Development Institute in London about the exact force and achievement of that convention.
    I want to avoid the narrow protectionist outlook represented by the common agricultural policy and move towards genuine international co-operation in the wider framework of such bodies as the United Nations and all the great organisations and agreements such as GATT which try to provide sensible co-operation throughout the whole world. I do not want a narrow, exclusive club for Western Europe. I want to see genuine co-operation between the countries of Africa, Asia, the Caribbean and Latin America so that there is a give and take, a genuine exchange and fair dealings between the two sides.
    My right hon. Friend the Foreign Secretary said at the outset of the negotiations that the Government believe that the monetary problems of the European countries could be resolved only in a worldwide framework. I believe that he was absolutely right. If this is so, why bother with Brussels? Why waste our time dealing with the apparatus of the Commission and the Council of Ministers when it is the worldwide framework, as my right hon. Friend has said, which matters?
    1050
    Many hon. Members try to say that here we are creating a splendid economic super-State which can stand up to America and Russia and which can play a powerful, independent economic role in the world and get its own way. Therefore, they say, we must join in this super-State. What happened when the oil crisis arose and there was the problem of recycling oil revenues? The Common Market was absolutely helpless. It did not even devise a common policy. France, Germany and Italy ran like scared rabbits in all directions to make private deals with countries such as Iran, Saudi Arabia and Libya.
    There was no common policy, no agreement, no effective organisation. This great super-economic State, when faced with the most serious and difficult financial crisis in the post-war period, was totally helpless to deal with it. What happened was that the Chancellor of the Exchequer took an important initiative. He began negotiations. He went to the IMF and through that managed to achieve a working arrangement, or the beginnings of one, for the recycling of the petro-dollars.
    Through the OECD, and subsequently by bringing in the United States, Japan, Canada and other countries, we have been able to devise arrangements which, for the moment at least, have begun to bring under control this great international problem of recycling the surplus revenues of the oil States. But the European Commission, the Common Market apparatus, this so-called European super-State, this economic giant, has been totally irrelevant to the problem. I fail to see how British interests have been in any way advanced in this crisis by membership of that body.
    Our membership of the IMF and of OCED has been of far greater importance than our membership of the EEC.
    The energy crisis was likewise beyond the capacity of the Common Market to cope with because it required cooperation between all the major consumer countries in the world and not simply between the nine industrial countries of Western Europe, although these are important consumers of oil and have an important interest. It is the International Energy Authority not the Brussels Commission which is now important in dealing with problems of oil. It

    1051
    is negotiations between Europeans and Americans, the Japanese, Canadians, Swedes and other industrial countries, together with the OPEC countries, which will eventually resolve the problem of how to get a flow of an essential raw material from the producers to the countries which need it, on a reasonable financial basis. But the European Commission is totally irrelevant to the problem.
    Mr. Russell Johnston: The past five minutes or so of the hon. Gentleman's speech have been concerned to criticise the Community for lacking a foreign policy. We know this perfectly well. The corollary of his criticism must be that if the Community did have a foreign policy it would be able to exert the kind of pressure which he correctly pointed out it was unable to exert during the oil crisis.
    Mr. Hooley: It is not primarily a question of foreign policy. It is a question of monetary and economic policy. There are other major countries, such as America, Japan and Canada, whose interests are so intricately bound up with these problems that it is nonsense to suppose that the Commission or the Western European conglomeration can have a policy and go its own way without the co-operation of and without close consultation with these other major industrial countries. I hold that the Commission and the apparatus of the EEC is basically irrelevent to dealing with these problems. The bodies which matter arc the IMF, the International Energy Authority and the OECD, where all the industrial countries and the oil producers can meet together to solve the problems.
    The White Paper dismisses the idea of a European monetary union as something which has been tacitly abandoned. There are differences of opinion whether that is the European view, but if it is true, why stay in? If a European monetary system is not contemplated—and the White Paper says that for practical purposes it is finished—why bother? Surely it would be more sensible to build up the system of special drawing rights through the International Monetary Fund and strengthen the genuine international monetary unions which are of importance to the whole world. I cannot see the
    1052
    point of going forward within this complex of arrangements in Western Europe when we believe that Western Europe is not serious in going ahead with a matter of vital importance if we are to have a genuinely integrated system of economies among the nine countries. If the White Paper is right in saying that this idea has been abandoned--and I am prepared to accept that from my right hon. Friends—I suggest that we should look elsewhere for our international monetary arrangements through the IMF.
    Mr. Neil Marten (: If one is to believe what is said in the Community, it has not been abandoned. 'The Heads of Government communiqué of 10th December 1974 affirms that the will of the Nine has not weakened and that their objective has not changed since the Paris Conference. European monetary union is still there. It is only a question of time.
    Mr. Hooley: I agree that there is a difference of opinion on this matter. I am debating what the Government claim to have achieved in the renegotiation. The claim which the Government are putting to the British people and which I shall argue with my constituents is that European monetary union is effectively a non-starter and that it is something way out in the future which will not affect us. On that basis, and indeed on the other basis, I am prepared to argue that the International Monetary Fund is a far more important body to this country than is the EMU.
    We have already been told by my right hon. Friend the Member for Battersea, North (Mr. Jay) and others of the disastrous effects on our balance of payments of membership of the Common Market, and I shall not dwell on that. The figures are established and are irrefutable. As the Financial Times pointed out, possibly in the next decade the important new markets for British industry may not lie only in Europe, although European markets will be important, and I do not deny that. The important new markets will be in countries which have the great oil revenues, such as Iran, Nigeria, Indonesia, Venezuela and possibly, after a lapse of time, Angola, Zaire and Algeria. Those countries need the industrial equipment and products which we can supply and

    1053
    they will be abundantly able to pay for them. The oil crisis has to some extent widened the scope of international trade and the possibilities for British industry, so long as we take our eyes off this magic Paris-Bonn axis and look around us at the real opportunities in the world.
    Beyond that, there is the question of the supply of industrial raw materials which will become more significant in the next 10 years as the Third World demands better prices and a more reasonable deal for its products. The Brussels Commission is helpless in this matter. It has no access to control over bauxite, copper, tin, nickel, manganese and uranium, not to mention oil. Certainly we can have negotiations with European countries and with the producers of these materials, but those negotiations will have to include the United States, Japan and the other great industrial countries. It is nonsense to suppose that we can formulate our own little European policy and go it alone on that basis, because we shall have to come to terms both with the Third World producers and with our world competitors who also need these materials.
    I want to say a few words about relations with the Third World. One of the key questions in this debate has been whether the Common Market is outward-looking and generous towards the Third World and believes in a genuine relationship of co-operation with the countries of Asia and Africa. The record of sugar is not encouraging. We had to fight like fury to get the 1·4 million tons of sugar into our own market. We were not asking France, Germany, Italy or Holland to accept sugar from the Caribbean, Fiji or Mauritius. We were simply saying that we wanted to retain an arrangement which had been valuable to our traditional suppliers and to British consumers. After endless debate, obstruction and argument we at last received permission to continue an arrangement which was valuable to us and to our traditional suppliers.
    The hon. Member for Leominster (Mr. Temple-Morris) referred to the Lomé Convention. I draw to his attention a seven-page study of the convention made by the Overseas Development Institute in London. One cannot seriously call in
    1054
    question the expertise of the ODI in matters concerning the Third World and help to the Third World. I do not intend to weary the House by going over the whole document, which is lengthy, but I will quote from it two sections, one on trade and one on aid. Referring to the Lomé Convention, the document states:
    "The convention does not, therefore, substantially improve the terms of access for ACP countries over what would have been the case if the Yaoundé Convention had simply been reviewed …. the goal identified by the Select Committee".
    —that is a Select Committee of the House—
    "as" the most important for associates, associables and the rest of the Third World '—free access to the EEC market—is not brought very much nearer by the terms of the convention."
    On aid, the document has this to say:
    "the aid provisions of the Lomé Convention represent a worsening en the position under the Second Yaounde agreement…. in purchasing power there will be a decline, given the rapid inflation of recent years: the Lomé per caput level is, in real terms, more than 40 per cent. below the Yaounde II figure."
    Those who preach to us about the tremendous historic success of the negotiations which have taken place should ponder on the considered judgment of the ODI.
    Mr. Richard Wood: Is not the hon. Gentleman trying to elevate the judgment of the Overseas Development Institute and his own judgment above that of the 46 ACP countries, which are well satisfied by the arrangement and presumably would be much less satisfied if Britain were to withdraw from the EEC?
    Mr. Hooley: I accept that the ACP countries were willing to ratify and accede to the convention as the best arrangement they could get in the circumstances, but they were dissatisfied with certain aspects of the agreement and said so at the time.
    More serious in regard to the convention is that left out of the privileged circle of associates are the Commonwealth countries of Asia, including India, Bangladesh and Sri Lanka, the largest and poorest countries in the world. They receive little food aid and no financial aid, but they are major recipients of British aid. The United Kingdom must help the poorest countries and channel its aid through the international agencies of

    1055
    the United Nations over and above its bilateral efforts. I am in no way disparaging or denigrating the generosity of France, Germany and Holland as individual countries which in aid terms has exceeded our own. I am saying that the EEC as an organisation has not shown any particular generosity. Nor has it matched up to the demands of the Third World in terms of this convention.
    There is another point that I must cover as it directly affects my constituency although it is not so much related to the overall problem of world relationships between the Common Market and ourselves. The Labour Party fought for 20 years to make the steel industry accountable to Parliament not only through the creation of the British Steel Corporation but by Section 15 of the Iron and Steel Act 1967, which gave the Government control over major investment decisions in the private sector. That was swept away by the European Communities Act 1972. Our own Parliament now has no effective control over steel in the public or private sectors. Prices, mergers and acquisitions are now subject to control by European bodies. To obtain a stake in the special steel industry in Sheffield, following the collapse of the Jessel empire, the British Steel Corporation had to go cap in hand to the European Commission under Article 66 of the Treaty of Paris. The commission gave permission for that acquisition but it laid down conditions which were completely unacceptable and which would have involved unemployment in other cities in the United Kingdom.
    If Britain withdraws from the EEC we shall still remain a member of 94 major international organisations. We shall still have a full voice, full rights and full opportunities of discussion, consultation and influence within those organisations. Some of those who oppose our withdrawing talk as though we are about to depart to some other planet, that we are about to be cast into outer darkness and that we shall cease to belong to Europe or the world. That is a totally false picture. I am completely persuaded in my own mind that co-operation with the world at large and co-operation with Europe will be feasible and advantageous to us outside the EEC.
    Our future depends on our own hard work, inventiveness and industrial enter-
    1056
    prise, and on the successful development of the genuine international bodies such as the UN, the IMF, GATT, UNCTAD and the rest. It also depends on the vigorous exploitation of our natural wealth, such as coal, oil, gas, farmland, fisheries and the rest. That is where our future lies and not in Brussels or Bonn.
    Mr. Deputy Speaker (Mr. George Thomas): There are 32 right hon. and hon. Members who are eager to take part in today's debate. If all hon. Members take 26 minutes very few are going to get in.
    5.24 p.m.
    Mr. Neil Marten: Every time that I am called in a Common Market debate the previous speaker rather exceeds his time and the occupant of the Chair, Mr. Deputy Speaker, always makes that remark. I always take it to heart.
    I much enjoyed the speech of the hon. Member for Sheffield, Heeley (Mr. Hooley). I hope that he did not misinterpret my remarks about economic and monetary union. I was only saying that it is quite clear that it is still an objective of that curious thing called the Common Market. It has not been dropped, although the White Paper gives the impression that it has been pushed back for our children and our children's children to consider.
    I agree very much with what the hon. Member for Sheffield, Heeley said about the wider international organisations through which we should work. We should work through the OECD and the IMF, for example. It is a parochial approach to international problems, such as finance and economics, not to work straight through those organisations.
    I also agree with the hon. Gentleman about the European market. I am not sure whether he used the word "decline", but it is not as important as it has been in the past. That is proved by the figures. Before we joined the Market our trade with the European Community was increasing by roughly 2 per cent. a year. In the last year, 1974, it went up by only 1 per cent. Therefore I think it is true to say that, while it is early days for us to draw a firm conclusion, it seems as though our trade with the Community is increasing at a less rapid rate than it was. However, our trade

    1057
    with the Middle East, the petro-dollar States, and the developing countries, which are getting quite a lot of the petrodollars, is increasing and has a great capacity for increasing.
    At this stage I shall take up the speech of the hon. Member for Birmingham, Ladywood (Mr. Walden). Obviously, the hon. Gentleman has had to leave the Chamber. I shall want to do the same thing myself before too long. The hon. Gentleman opened up the very subjects about which I wish to speak. I agree very much with his opening remark that we should not smear people by association. I was appalled when I read a letter in The Times from Lord Gladwyn. Well, I was not appalled because he has done so before. And one of my hon. Friends wrote a similarly orchestrated letter—perhaps orchestrated by the European Movement—to the Daily Telegraph. Happily, both papers published my replies.
    Mr. Russell Fairgrieve: May I point out to my hon. Friend the Member for Banbury (Mr. Marten) that no one orchestrates my letters. I wrote them myself.
    Mr. Marten: I was not saying that my hon. Friend did not write his letters himself. It was the placing of the letters in the two papers which was obviously orchestrated. I have seen that happen before. I cannot prove it, but the implication is always there. However, I hope that we can drop that kind of silly time wasting and that sort of silly, childish argument.
    The hon. Member for Birmingham, Ladywood raised the question of the breaking of the Treaty. It is a matter that keeps on coming up in the Common Market argument.
    Mr. Percy Grieve: You don't say.
    Mr. Marten: I do say, and I am just about to say it. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) who, at the time represented, Reigate, is present and on the Opposition Front Bench. Throughout the whole of the debates on the European Communities Bill we were assured repeatedly that we could always come out of the Common Market. That has
    1058
    never been disputed. If the assurance, before going in, was that we could always come out, who can complain, if we vote to come out in the referendum, that we are breaking the Treaty? That seems to me to be a highly technical point.
    Further, we must remember that when the Government were in Opposition during the European Community debates they said, and particularly during Third Reading of the Bill their official Front Bench spokesman said—I do not have a copy of the speech in front of me; it is normally in my little file that I usually carry around, but I did not bring it with me for this debate—quite clearly that they did not accept the terms of the Treaty of Accession because we were not allowed to debate that Treaty in the House. They made that absolutely clear. The then Opposition also said that if they were returned to power and that has now come about—they would pledge themselves to renegotiate. They have now gone through the motions of renegotiation. They also said that having renegotiated the terms they would put the matter to the people. They said, finally, that the Common Market had better take note of those remarks before we joined, and before the Common Market countries ratified our accession. They made it clear that the Labour Party, if returned to Government, would not feel bound by the Treaty.
    I hope that we can now drop that argument about the breaking of the Treaty. It seems that the Labour Party is honouring the things that it pledged itself to do. I do not think that we can complain about that.
    The third point that the hon. Member for Birmingham, Ladywood made was that of sovereignty. That matter will come out on top in the debate on the referendum. Sovereignty "is a loose word often used by some people as implying the power to throw one's weight about in the world. We are not talking about that kind of sovereignty—not the power to throw our weight about as some great imperialists in the House want us to do.
    We can divide the question of sovereignty in two. First, if we lose our so-called sovereignty, what will it involve? The right hon. Gentleman the Leader of the House has already clearly admitted

    1059
    that this House has lost its sovereignty over a wide area, and that is not in doubt. My right hon. Friend the Member for Knutsford (Mr. Davies) made a good point about pre-discussion. That is a matter which this House, on its own, after we have come out of the Common Market, can examine and consider in regard to legislation before it reaches the stage of Second Reading.
    We have got ourselves into a position where, despite pre-discussion, laws are finalised by wheeling and dealing in secret in Brussels. We go through the motions in this House of scrutinising material and of having stupid debates at 11.30 at night. However that does not stop Ministers going back to Brussels on behalf of the British people, wheeling and dealing behind the scenes, and coming up with something entirely different from what was presented to this House. In that way this House has lost its sovereignty.
    I am glad to see my right hon. Friend the Leader of the Opposition present. The official Opposition has lost its power to amend draft European legislation, and so has every back bencher in the Chamber. Not one back bencher in the Chamber can amend legislation that is laid before the House in respect of the European Community. If my right hon. Friend the Leader of the Opposition likes to try to take action on that score one night, I should probably support her.
    The present situation means that once legislation in draft form has been finalised, after secret wheeling and dealing in the Community, it is directly applicable and this House cannot change that law without the consent of the other eight members of the Community. To that extent we have certainly lost our so-called sovereignty. Personally, I prefer to call it the power of self-rule.
    However, the question of today's sovereignty is only one aspect of this matter. My real anxiety is aimed at the way in which the
    future will develop. That will be the fundamental issue in the referendum. We must look at what we are really talking about—namely, the setting up of a directly elected European Parliament with legislative powers, a Parliament which will legislate and whose laws
    1060
    will apply to this country. If at a subsequent General Election the British elector by his vote wishes to change the policy of this country, the Government he elects for the United Kingdom will be incapable of altering laws passed by the European so-called Parliament. It is not European: it is only a Common Market Parliament.
    I am glad that my right hon. Friend the Leader of the Opposition did not confuse Common Market with Europe. She used the word "Community" throughout her speech, whereas yesterday my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw), as Deputy Leader of the Opposition, used the word "Europe" many times when he meant Common Market. I agree that it is a good propaganda point for pro-Marketeers, but I believe that we should distinguish one from the other.
    The point about the European Parliament and the inability of the British elector, once that Parliament is set up, to change the laws which it makes, is being hidden by the pro-Market case. The pro-Marketeers know that if the British fully understood that, they would he sure to vote to come out of the EEC. My hon. Friends and I, who find ourselves on this side of the argument, will ensure that throughout the referendum campaign the British public will be made aware of that fact. I hope that on that basis they will vote for self-rule and self-government. I hope that finally they will say "Let us in this country rule ourselves and let us not be ruled by Brussels."
    Some people say that this will not happen. Let us trace the reasons why it will happen, judging by what one understands to be the decisions of the Community. The Summit communiqué issued in Paris clearly refers to the question of the directly elected European Assembly. It says:
    "The Heads of Government note that the election of the European Assembly by universal suffrage, one of the objectives laid down in the Treaty, should be achieved as soon as possible. In this connection, they await with interest the proposals of the European Assembly, on which they wish the Council to act in 1976. On this assumption, elections by direct universal suffrage could take place at any time in or after 1978."
    Let us turn to what happened at the European Assembly in Strasbourg when on 16th January a resolution was passed

    1061
    by the European parliament. It said,inter alia
    "The European Parliament therefore considers a European Parliament elected by direct universal suffrage as an indispensable element in achieving further progress towards integration…".
    Article 3 of that resolution refers to the directly-elected European parliament having a five-year legislative period to begin at the opening of the first session following each election. It is clear it will be a legislative assembly for it will have a five-year life and, if it is legislative, it will, of course, make laws.
    The Conservative spokesman on Europe, my hon. Friend the Member for Saffron Walden (Mr. Kirk), in the House on 29th January, asked the Minister of State for Foreign and Commonwealth Affairs about a directly-elected European parliament. My hon. Friend said:
    "Does not the right hon. Gentleman agree that the terms of the Treaty are mandatory? As the Government are accepting the treaty and are renegotiating within it, they must have accepted the principle of direct elections and are arguing only about detail?"
    In the Summit communiqué we were told that there would be postponement of that decision till after the referendum. The Minister of State replied:
    "While the principle is there established, the timing of its implementation is a matter for the individual States."—[Official Report, 29th January 1975; Vol. 885, c. 389.]
    Both sides of the House now clearly accept a directly-elected European parliament. If we accept that, we surely accept that such a body will do something. It will not sit there and do nothing. It will legislate.
    Let us assume that there is an anti-Socialist majority in that Parliament. The people of this country may want to elect a Socialist Government here because that is their choice. However, there is nothing a newly-elected Socialist Government in this country could do in face of an anti-Socialist majority in Europe. I find it curious that the Conservative Party is prepared to let a Socialist majority in Europe legislate if we are unable to reverse the laws made by the European Parliament.
    Mr. Russell Johnston: It equally follows that the hon. Gentleman would prefer to have a Socialist Government in
    1062
    this country and a Conservative Government in Europe.
    Mr. Marten: I want people in this country to use their vote to elect the Government which they want and not to be ruled by legislation passed by a majority of people in Europe—in other words by continental Members of Parliament in a majority. I do not use that term in any bad sense, but I am referring to people who do not belong to this country. They will be able to make laws which will affect this country. That is my objection, and it should be the objection voiced by many more people in this Parliament.
    I am worried since it seems to me that the judgment of the pro-Marketeers is faulty. The first case occurs on page 42 of the White Paper where there is a proud quotation of what the Prime Minister said in the House of Commons on 2nd May 1967. He was then in his pro-European mood. He said:
    "Together, we can ensure that Europe plays in world affairs the part which the Europe of today is not at present playing."—[Ofcial Report, 2nd May 1967; Vol. 746, c. 314.]
    That was his judgment. His judgment was that we should enter the Common Market and play this marvellous role together.
    How has it turned out? In January 1975 Mr. Ortoli, the President of the Commission, reporting on the year's work of the Community, used these words:
    "Europe's attempt to speak with one voice on critical issues has sadly misfired, and Europe's lack of co-ordination, lack of initiative, to be frank, lack of courage, means that Europe has lost its minor part to become a mere spectator. Europe's role, Europe's influence, is insignificant, ineffective and nonexistence in the forums where major decisions on peace, security and economic and financial affairs are taken."
    Those are not my words. Those are the words of the President of the Commission reporting on his own Common Market.
    Looking at what the Prime Minister said in 1967, his judgment was that once Britain had entered the Community all would be lovely. His judgment was wrong then, just as it is wrong now.
    We were told in paragraph 57 of the 1971 White Paper that there would be a more rapid improvement in our standard of living. In fact our standard of living seriously declined in 1974.

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    Exactly that was forecast by the anti-Marketeers who then opposed entry. Paragraph 45 of the 1971 White Paper said that the effect on the balance of payments would be positive and substantial. We know that the opposite has happened, which was forecast by the anti-Marketeers then campaigning to keep Britain out.
    Paragraph 56 of that White Paper said that membership of the Community would lead to much improved productivity. According to Government statistical digests, productivity declined by 3·3 per cent. in 1974. Again, paragraph 56 of the 1971 White Paper said that membership of the Community would lead to a higher rate of investment. That rate is now down by 6·7 per cent. It was also said that membership of the Community would offer the chance of new jobs. Unemployment is rising. Paragraph 57 said that entry would result in a higher rate of growth of the economy. There is no growth in the economy, which is exactly what the anti-Marketeers said.
    It was said that entry would not lead to a deficit in our balance of payments. It was said that the opportunities for growth would lead to more jobs and greater prosperity for all in Britain if we entered the Common Market. That statement was contained in an advertisement in The Times on 26th July 1971. It was signed by 71 leaders of British industry and commerce.
    Mr. William Molloy: Some leaders.
    Mr. Marten: That is my point.
    Membership of the EEC is a serious question, which the country must judge. This must come after the catalogue of misjudgment I have mentioned. I am not saying that there was anything other than misjudgment. There was no attempt to mislead the country. It was just that the judgment was wrong. Judgments are again being made in the present White Paper, including what would happen if the United Kingdom left the EEC. The country must recognise that the judgment on this occasion is likely to be just as wrong as the judgment of 1971.
    Last time the anti-Marketeers were right. This time the anti-Marketeers are again right.
    5.45 p.m.
    Mr. David Marquand: I shall deal later with what the hon. Member for Banbury (Mr. Marten) said about sovereignty, which was the central point of his speech. However, I should like to take up what he said about the renegotiations—which, after all, we are supposed to be debating—at the outset of my speech. The hon. Gentleman said that the Government had gone through the motions of renegotiation. The right hon. Member for Knutsford (Mr. Davies) described the renegotiations as a fantasy. I sat through most of the debate yesterday, for my sins, and I heard other speakers describe the renegotiations as a charade and as a farce. That theme has run through this debate. Therefore, I should like to try to put the record straight about the renegotiations.
    It is a slightly odd rôle for me to play since I should not have chosen these objectives. If I had drawn up the Labour Party manifesto, the renegotiation objectives would have been different.
    I had no great enthusiasm for the seven points put forward in the Labour Party manifesto. I should have liked to see a Labour Government trying to renegotiate in a different way and for different purposes. I should have liked to see them trying to change the Community in a more Socialist, a more internationalist and, in some respects, a more supranational direction.
    I was sad that the emphasis and the thrust of the Labour Government's renegotiations exercise should have been concerned primarily with the defence of British interests rather than with changing the nature of the Community to benefit all its members. However, that is not the point.
    The point about the renegotiation exercise is this. A British Government came to power a year ago with a manifesto saying that they wanted to achieve certain objectives in the Community. After 12 months of bargaining and give and take, that Government have come back with at least 80 per cent. of what they requested. In doing so, they have demonstrated that the argument of those who said, when we entered the Community in 1973, that the Community was an inflexible monolith which could not be changed was totally without

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    foundation. They have demonstrated that the Community is a genuine community and that its members are prepared to take account of each other's vital interests as each sees its vital interests. In that sense the renegotiations have achieved an important purpose.
    Mr. Molloy: Will my hon. Friend say whether, in view of the fact that they achieved certain of their objectives, the Government were helped in the achievement of those objectives by the fact that there was a possibility of a referendum being held in Britain on whether we should stay in or leave the Common Market?
    Mr. Marquand: I do not believe so. If we look at the history of the Community of the Six before we entered, we shall find that whenever there were differences between five nations and a sixth, the five have always taken account of the interests of the sixth, whichever the sixth nation happened to be. That is the way in which the Community works. It is a partnership of States which take account of each other's vital interests. It has not become a supranational monolith. Indeed, it has not become as supranational as I hope it will become in due course.
    The question which we are debating today, and on which the British people will vote on referendum day, is not whether we should have joined the Community in 1973 but whether we should leave the Common Market in 1975. We must take some account of the costs of withdrawal if we are to arrive at a balanced judgment on that question. I do not wish to commit the sin of exaggerating the likely costs of withdrawal.
    My own personal opinion is that if we withdraw from the Common Market. the horrific picture conjured up by my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden) is very likely to come true. It is very likely that there will be a catastrophic sterling crisis. But I do not wish to place much emphasis on that argument, because even if that were not so I do not think that there can be any serious doubt that over the long term we should be economically isolated—and isolated in a very much colder world than the one we knew before
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    we went into Common Market in 1973.
    It is a total fantasy to believe that somehow or other, because we have now changed our minds yet again, we can summon up the lost legions of the Commonwealth and EFTA and expect them to return to the relationship that we had with them before we went into the Common Market. It is an even bigger fantasy to think that in 1975 we can somehow persuade the EEC to make with us the sort of free trade area agreement which the right hon. Member for Chipping Barnet (Mr. Maudling) failed to get 20 years ago, when the institution was much less developed than it is today.
    What shall we be doing if we withdraw from the Common Market? The hon. Member for Banbury has a valid point when he says that it was stated by the Labour Opposition at the time that there would be a referendum and that there could be a withdrawal. But if we want to estimate the likely reaction of the Common Market to our withdrawal, we must try to look at our behaviour through the eyes of its members and not through our own. How would they judge us if we were now to withdraw?
    We spent several years trying to get in. Having got in, we have spent 12 months trying to negotiate different terms from those we agreed upon when we joined. If the British people now vote for withdrawal, a long process not of renegotiation but of re-renegotiation would have to take place to get some new arrangement with the Common Market.
    It is inconceivable that if we kick our partners in the teeth in this way they will give us the generous treatment which they would not give us 20 years ago. If we get out of the Common Market, we get out to be on our own, and on our own in a very cold and hostile world.
    Mr. Hooley: I remind my hon. Friend that trade not only between Europe and ourselves but throughout the world is now governed by important international agreements under the GATT which are binding on the Common Market countries, on us and on other nations. These will not be abrogated if we withdraw from the Common Market.
    Mr. Marquand: But if we withdraw we shall cease to get the benefits of industrial free trade with the Common Market. It is a total fantasy to imagine that we can get an industrial free trade agreement with the Common Market if we withdraw. I agree that we shall still be members of GATT and the IMF, but that advantage we shall not have.
    I believe that the political costs of withdrawal are likely to be far more serious than the economic costs. It is the political argument that matters most to me.
    The unity of the Western world at the moment is far more fragile than many in this House appreciate and far more fragile than it has been at any time since the early 1950s. We have had a generation of peace and stability such as the human race has never known before, to a considerable extent because of the creation by Ernest Bevin, Acheson, Truman and others in the late 1940s, of the present structure of the Western world.
    We have come to take it for granted. But at present there are very strong currents of neo-isolationism in the United States. Not far beneath the surface, similar currents can be detected on the mainland of Europe. Certainly they can be detected in the Common Market debate in this country. If we pull out of the Common Market, we shall strike a terrible blow at an increasingly fragile structure. I do not say that we shall necessarily destroy it—
    Mr. Molloy: Like France did in withdrawing from NATO.
    Mr. Marquand: Exactly.
    Mr. Molloy: And France is in the Common Market.
    Mr. Marquand: That was stupid of the French.
    Mr. Molloy: The French are stupid.
    Mr. Marquand: But two wrongs do not make a right. For us to do as President de Gaulle did a few years ago in what is today an even more dangerous situation would do far greater damage than he did. Isolationism is catching. If this country lurches into isolationism as a result of the referendum, the effects on the Western world could be very serious.
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    I want now to refer briefly to the argument advanced so persuasively by the hon. Member for Banbury about sovereignty. I agree with him that it is humbug to pretend that there is no loss of sovereignty in membership of the Common Market. I also agree that sovereignty and power are different and should not be confused. There is a loss of sovereignty through membership of the Common Market. But, though I find it consistent and reasonable for the lion. Member for Banbury to use the sovereignty argument, I find it strange that some of my hon. Friends should applaud him when he does so.
    For me, one of the fundamental aspects of Socialism is internationalism. We cannot have internationalism unless we are prepared to give up sovereignty to someone. It may be that the Common Market is not the right body to which it should be given, but to say that in no circumstances should we ever give up any sovereignty to anyone is inconsistent with all that I thought that the Labour Party stood for.
    The nation State was the creation of nineteenth-century capitalism. I believe that it has had its day. The Common Market came into existence because the nation States of Western Europe found that they could not achieve their purposes—the welfare, happiness and prosperity of their peoples—within the structure of the nineteenth-century nation States. Today, the same applies to us as applied to them.
    Let me take some specific, practical examples. Take the problem of regional policy which has concerned a great number of my right hon. and hon. Friends, and which concerns me as well, since I represent an intermediate area. No one who looks at this problem in a European context can doubt that the forces which create regional inequality in this country are part of an international complex of forces. The forces which create disparities between the North and South of England are not confined to this country. They operate all over Western Europe.
    I do not believe that it is possible to counteract those forces effectively within the structure of the nineteenth-century nation State. It is not possible to deal with the problem of pollution effectively within the structure of the nineteenth-

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    century nation State. This is a crowded continent with all kinds of interlocking, overlapping problems which cannot be dealt with effectively within the obsolete structure of the nineteenth-century nation State. That is why I believe it is necessary to work in partnership with other countries in Western Europe.
    We are part of the continent of Europe whether we like it or not. The hon. Member for Banbury attacked proMarketeers for equating the Common Market with Europe. Of course, he is right The two things should not be equated together. But the fact remains that we are part of the continent of Europe.
    Whatever happens on the continent of Europe is bound to affect this country most profoundly. Throughout our history—even in the greatest days of the Empire on which the sun never set—we were always profoundly affected by developments on the continent of Europe. British Governments in the 1920s and 1930s thought that they could stand aside from developments on the continent of Europe. They and the British people learned their lesson in 1940.
    British Governments before the First World War thought that they could maintain a policy of glorious isolation and remain unaffected by developments on the continent of Europe. The British people learned their lesson between 1914 and 1918.
    Whether we like it or not, we are affected by what happens across the Channel. We are more affected now than ever before in our history because this is a smaller world and because we are a weaker Power.
    The question that we must ask ourselves in the referendum campaign and in this debate is this: do we want to remain part of an institution which gives us the capacity to influence the developments which take place on the mainland of Europe, or do we not? We shall be profoundly affected by those developments whether we are in or out of the Common Market. The difference between being in and being out is the difference between being able to influence those developments and being unable to do so. I believe that it would
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    be an act of national folly to give up the opportunity to influence those developments from within.
    6.3 p.m.
    Mr. Hugh Fraser: Three years, three summers with the length of three long winters, have passed since I spoke either to the House or to my constituents on the problem of the EEC. Looking back on the speeches that I made against joining the EEC in 1970 and 1971, I believe that they represented fair and proper arguments. But the question now before the House is of a quite different nature. It is not whether we should go in but whether we should come out and break a whole series of agreements and arrangements which have been made. The whole question now is not of going in but whether we should come out. The considerations now are of a different nature from the considerations which applied on going in or not going in to the Common Market.
    In the last three years, as the hon. Member for Ashfield (Mr. Marquand) said, there has been a complete change in the world outside this country and outside Europe itself. We are seeing the West today in a period of grave disorder, if not decline. We face a situation which is as brittle, inflammatory and dangerous to the interests of the West as we have ever seen.
    Over the last few months a large number of people in this country and many Labour Party Members have seemed almost to think that we are not in the Common Market at all because of the nature of Labour Party propaganda which has undoubtedly confused the issue. But is is a fact that under two Governments we have been and are members of the European Economic Community.
    The issue of economics and various other issues which have been raised can be and have been argued back and forth across the House, but at the end, when the people come to weigh up these matters, they will be no more certain of their balancing of these arguments than they were at the beginning.
    I should like to turn to a few of the much wider considerations. First there is the fact that we are in the EEC. It is

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    a sea of troubles and to be glorious in the act, but to stand out against a tide of events and to try to reverse the tide of history leads, as I know, coming from a Jacobite family, to the block or to a position as absurd as that of Canute. Frankly, I think that to try to turn against what has happened would be an error.
    My hon. Friend the Member for Banbury (Mr. Marten) spoke feelingly about the letter by Lord Gladwyn which appeared in The Times a few days ago. But I must say that a far larger number of Jacobins than Jacobites seem his allies in the political spectrum. I hope that this may give him some pause. His friends seem widely spread with a Left-wing bias. Who rules whom? But this is a Leninist relationship which he must work out for himself.
    I come to my conclusions with regret. I am not and never will be a passionate Marketeer. However, looking back, the last 30 years have been a history of regret and retreat from glory. Looking at both Front Benches and at the shadows or ghosts of those who sat on those Front Benches before, nothing emerges more clearly than the lack of national objective since the end of the 1939–45 war. Our leaders glibly talked about the unity of Europe in the 1940s and 1950s. What did they do? They did nothing. They talked about a great and special relationship with the United States of America. When the right hon. Member for Battersea, North (Mr. Jay) and I and other Members of this House and Senator Javits, and other Americans tried to float a North Atlantic free trade area, what happened? There was not even a pennyworth of Government assistance.
    When General de Gaulle came forward in the late 1960s and suggested, through our ambassador, that there should be a free trade area with political direction by the major Powers, which in every way made sense, what did we do? We rejected it.
    For more than 15 years British Governments have blown hot and cold on the idea of this country having a purpose and mission in the world at all. Unlike the French, who after all bound their ex-colonial territories with hoops of gold, and with bands of proffered administration and the strength of a mother tongue,
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    we sent missions round the world in the 1960s to our friends, our late dependencies, designating the sterling area and telling them "We can no longer look after you. You must be prepared to paddle your own ships and reach some port or anchorage". As a result, of course, they did. As a result, a treaty like the Lomé Convention is more valuable to them than any connection with Whitehall.
    This is a story not of a great people but of a people great but perhaps too much misled by their own politicians. Now, in all these years, whether or not one likes it—I do not like it—there has been one positive, firm act of statesmanship, whether or not it be popular, and that was the action of my right hon. Friend the Member for Sidcup (Mr. Heath) of getting this country joined to the EEC.
    I have not been in favour of it. But there it is. It is a fact. Perhaps I may draw a more homely analogy. If one has been against a marriage and it is consummated, does one try to destroy it? If one has been against an operation for some relative, and if one has the power, does one drag the body of the patient out of the operating theatre? Really, withdrawal from the EEC would be to indulge a personal ideological whim against the national interest.
    Of course there will be difficulties in this arrangement with Europe. Of course there is the problem of sovereignty, which hon. Members have so rightly and widely spoken about and of which they have made such a proper issue. I have always been one who has been what is called staunch on the question of British national and parliamentary sovereignty. I defied even Sir Winston in his day in voting against the first American loan. I have defied my Whips. Of course, that means nothing today in the House of Commons. It is a badge of honour, like one of those hats which are worn in Africa to show that people are properly independent and have been in prison. I have defied my Whips endlessly on these issues
    I have supported my right hon. Friend the Member for Down, South (Mr. Powell) in his brilliant attacks on this issue of sovereignty. Even with my right hon. Friend the Member for Sidcup, I went so far as to insist, when I was a member of the Cabinet for a short while

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    on the defence side, that at Nassau we retained the full independence, if needs be, of our nuclear deterrent. Therefore, sovereignty is a matter of considerable importance to me, as it is to every hon. Member.
    The hon. Member for Birmingham, Ladywood (Mr. Walden) said that the danger to sovereignty is not in these EEC arrangements, imperfect though they may be, but that the danger to sovereignty could well be inside this country if things go wrong. And wrong they are going. My greatest fear is of this growing present derogation to parliamentary sovereignty. Even the absurd idea—with respect to hon. Members on the Government benches—of a referendum is a derogation of parliamentary sovereignty. The giving away of powers to the trade unions is a derogation of parliamentary sovereignty. Day by day we see derogations of parliamentary sovereignty.
    With respect to my hon. Friends and various sides of the House and various people in this country, I must say that there is only one party which is absolutely solid in favour of our coming out of Europe. I know that the party of the hon. Member for Moray and Nairn (Mrs. Ewing) is totally divided, according to today's edition of the Glasgow Herald Even the Scottish National Party is no longer solid on the issue. One party is absolutely solid, and that party wishes to do what? It wishes to destroy democracy. It is the Communist Party in Britain. [An hon. Member: "Reds under the bed."] It is not "Reds under the bed" at all. It is a fact of life, and the more that right hon. Members of the Government realise that the better their constituents will be served.
    Of course there are difficulties ahead. But I believe that to pull out of Europe now would be a disaster at home for confidence within this country and a disaster for our relationships abroad. Britain could now waste far too much time on the referendum, which could become for far too many people an escapist exercise, away from the realities. The realities for Britain are grim. We are living on borrowed time and borrowed money. The sooner this House and this Government get down to the solutions to these problems, the better it will be.
    6.15 p.m.
    Mr. E. Fernyhough: I share at least one thing with the right hon. Member for Stafford and Stone (Mr. Fraser). Like him, in the past I have not always been the best-loved of Members by the Whips. Looking back on those occasions when I was rebellious, I find, like the right hon. Gentleman, that history has proved that I was right.
    The House will appreciate that it was not an easy speech which the right hon. Gentleman had to make. It is never easy for anyone who has trodden a certain road for a number of years and advanced a persuasive argument to have to end up by saying "This is the end of the road and as far as I am concerned the chapter is now closed. I accept afait accompli"
    I am sorry that I cannot do that, because I am satisfied that if the House, looking at the Common Market as it exists today, were facing the question that it faced three years ago, it certainly would not decide in favour of going in. If I had the powers to compel people to do a penance, I would make those proMarketeers whose speeches were so influential in the days when they were saying that it was desirable for us to go in re-read their speeches. What did those speeches really say? They said that if we went into the Common Market it would act as a blood transfusion. They said that it would revitalise this nation.
    We have been in the Common Market. We have had the advice of the Common Market doctor. The truth is that the British patient is weaker and more ill today than when we first went to the doctor. There are other patients of this doctor who have been in the Common Market from the beginning, but they do not hold any hope for us. Italy's years of membership of the Common Market have not solved the great economic and social problems from which she is suffering. One would have thought that after the years that Italy has been a member she would have been in a much stronger economic position today than she is.
    Mr. Grieve: The right hon. Gentleman surely recognises that the ills of this country have nothing to do with our membership of the Community but are due to what my right hon. Friend the Member for Knutsford (Mr. Davies) said a little while ago—to our producing too

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    little, paying ourselves too much and living beyond our means. That we can remedy ourselves.
    Mr. Fernyhough: If I could persuade the hon. and learned Gentleman to do me the courtesy of reading the speech I made in the three-day debate on entry, he would find that that was precisely the content of my peroration. I said that our ills, aches, pains and economic and social problems could not be solved by looking into the crystal ball of the Common Market. They could not be solved by endless journeyings between here and Brussels. They would be solved by the skill, determination and cooperation of the British people. Our salvation lies here. It does not lie outside. Nobody will save us if we are not prepared to save ourselves.
    I am greatly disturbed when I look at the world. On our television screens, week after week in the past few months, we have had pictures of starving people in Ethiopia, Bangladesh, Vietnam and other countries; and here we are saying that it is very desirable for us to tie ourselves, hook, line and sinker as it were, to a system which believes in building up big stocks of meat, butter, cheese and milk and destroying and denaturing wheat. How can we as a so-called civilised, Christian people ever defend the regulations and rules of a system which on the one hand puts into storage millions of tons of food and on the other does nothing at a time when stomachs are empty to marry that food to those empty stomachs?
    Mr. John Roper: My hon. Friend will be aware of the food aid programme of the Community which has been specifically directed to the countries to which he is referring, which has been reported on to this House by the Select Committee on European Secondary Legislation.
    Mr. Fernyhough: I am very well aware of that, and I hope my hon. Friend has read the letter which my right hon. Friend the Minister of Overseas Development has sent out this week in which she makes very clear that the Market will discriminate against the hungry millions in India and Sri Lanka. I had intended to bring that document with me because on its second page there are two paragraphs
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    which are very informative and telling; but obviously it would have meant that my speech would have been a little longer, Mr. Deputy Speaker, than you or the rest of the House would have appreciated, so I did not do so. I recommend my hon. Friend to read that letter and I would then ask him whether he thinks that our proposed entry is as glorious as he tries to make it out to be, because anything which discriminates against hungry men, women and children anywhere cannot be defended at a time when there are the resources to feed them if the will existed.
    Mr. Roper: It is true, of course, that the Lomé Convention applies only to 46 countries, but my right hon. Friend will know that the Community has already agreed a commercial agreement with India and is signing another with Sri Lanka, and that its food aid goes to countries of Asia as well as to the ACP countries.
    Mr. Fernyhough: All I am saying is that in a situation of this kind I prefer the word of the Minister who has responsibility in this field to the word of my hon. Friend. I do not say that in any discourteous way, but it is the Minister who has responsibility in this field and it is she who has passed on this information. I presume she knew that it would be quoted and might be challenged. Therefore, I accept it because it comes from a source which is open to much more challenge than any ordinary Member would be.
    Everybody says that we have to be in the Community because of the influence we shall wield. That is an argument that I have never accepted at all. I do not know why some Opposition Members who are so very concerned about what they call the Left wing in this party do not join us to try to influence the party. I do not know why some of my hon. Friends who are so concerned about some of the Right-wing Tory policies do not join the Tory Party so that they can influence it from inside. The truth is, of course, that one has as much influence outside the Tory Party, if one disagrees with it, as one would have within it if one disagreed with it.
    We have all seen what happens to members of the Labour or Tory Parties if they fundamentally disagree. They become very isolated, very uninfluential.

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    In this respect one has only to think of the right hon. Member for Down, South (Mr. Powell). Nobody could pretend that he has not the ability to influence, but I believe most people would accept that today he carries less influence over those who sit on either side of him and in front of him than he did, say, five or six years ago, quite apart from the time when he was a Minister.
    Speaking of sovereignty, the right hon. Member for Stafford and Stone gave one or two illustrations. He asked whether if one had had a row with a relative one needed to carry on with it. That would depend upon whether the relative or the right hon. Gentleman was in the wrong. It is not normal for people who feel that they are right to make an abject apology to someone who has done them a wrong.
    There are countless thousands of newly-married couples in this country who, if only they would be content to live with their in-laws, could have a higher standard of housing, more money to spend, and live, by and large, a fuller life materially. But many of them choose to live in a squalid slum because it gives them power to make their own decisions and to run their own lives rather than live under the roof of their parents who may be fairly affluent. It is the ability to govern their own lives, to make their own decisions and determine their own way which they cherish and love over and above the affluence that they would enjoy if they would only give up their right not to determine their own destiny. Likewise with countries. There are some things for which too high a price can be paid.
    I am not one of those people who wants Britain to be in the position it was years ago. I am not with the former Prime Minister who wants to make Great Britain great again if he is thinking in terms of its greatness at the turn of the century, because I believe that we have qualities far and away above those to offer to the rest of mankind in these very troubled times.
    Mr. Andrew Welsh. From all the argument of the hon. Gentleman, the logical conclusion is that he favours self-government for Scotland.
    Mr. Fernyhough: I shall be quite honest with the hon. Member. I have put down a note here on Scotland and Wales and I am prepared to say that at a time when more of our people are asking for more self-determination, the right to make their own laws and to govern themselves, it seems very improper, when we are saying to part of our people that there is nothing wrong in their aspiring to do these things, that we should at the same time be giving away, as far as the whole nation is concerned, our right to do what we say Scotland and Wales have a right to do.
    I think that our difficulties are probably due to the simple fact that over the last 20 years both major political parties have promised too much. They have raised the sights and increased the appetites of the people far beyond their capacity to honour their promises. We now realise that there is no Santa Claus who will deliver the goods for the British people. There is no panacea, no simple means by which the hopes, aspirations and appetites of the British people may be satisfied. The British people by their own efforts and determination and by the sweat of their brows will lift themselves out of this economic situation. They will co-operate with the Government in combating, or we shall fail in the fight. There is no one in Europe or anywhere else in the world to come to our rescue in these circumstances. Our rescue will depend completely upon our own efforts.
    I said that if I had the power I would make those who before entry made such beautiful and prophetic speeches about the effect of entry into the Common Market re-read their speeches. However, I am able to quote briefly from an advertisement which appeared in a newspaper in my constituency which was inserted by Common Market supporters. It is called "Common Market Comment". It dealt with depressed areas. God in Heaven knows that if anyone has represented a depressed area through 28 years in Parliament, I have. Jarrow has always had twice the unemployment of any other part of the country.
    The advertisement reads:
    "However, turning a depressed area into a prosperous one is not just a question of aids and inducements. Fundamentally it's a question of national economic strength and confidence in the future. Our entry into the Common Market will create this strength and this

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    confidence. Stagnation will give way to growth. Investment money will flow into the areas that now have a surplus of labour, creating many more jobs in many industries."
    It was wicked for intelligent men to have put that sort of advertisement in the newspaper in Jarrow in 1971 to try to convince the people that their unemployment would disappear and that there would be economic growth if we joined the EEC.
    The people of Jarrow know that the Common Market is not the answer to their problems. They know, too, that the EEC Regional Fund will not be an answer to their problems. The figures explain what I mean. We in Britain will spend £470 million this year in the development areas. Anybody who thinks that the EEC Regional Fund will make a great and fundamental contribution should compare its proposed £150 million spread over three years with the amount we are proposing to spend in Britain. It can then be seen how insignificant that amount is by comparison.
    Mr. Hugh Fraser: We are borrowing.
    Mr. Fernyhough: The right hon. Gentleman says that we are borrowing, but we have borrowed many times before and I am confident that if the Labour Government remain in office we shall not only repay that debt but we shall do something which we have achieved twice before —we shall get the country out of the muck and mess it was left in by the Conservatives.
    The tragedy of the present Government, like the tragedy of the 1964 Government, was that it had to take over a bankrupt country which had been led into that situation by the Conservatives. We had to give the country new life. On both occasions we left a succeeding Conservative Government with a handsome balance of payments situation and on both occasions the Conservatives squandered it. Once more it is our turn to clear up the mess.
    I can never believe that it is desirable that a country which is faced with economic and financial problems such as those we face should ever have to subscribe to the free movement of capital. This is one of the key issues in the development of any country. If a Government cannot
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    control the movement of capital, they cannot determine the extent of growth. If we are to rescue ourselves, we must not only expect our people to make the necessary effort: we must expect from the capitalists a social conscience which far too few of them have exhibited. They must be taught that it is their moral obligation where their country is struggling for its very existence to invest their money in their country where they made it rather than transfer it to other countries as many of them have done.
    The British people have yet to speak. I am glad that we are to have a referendum, and I hope that when the count is taken the people will make a decision which I believe they would have made in 1972 had they been given the chance. I believe that they will say that Britain will remain an independent country and that, because of its values, it could be a beacon to the rest of the world.
    6.38 p.m.
    Mr. Russell Fairgrieve: I did not have the privilege of being a Member of this House when the historic debate took place in 1971 with the great majority of 112 Members wishing this country to join the EEC. For that reason alone I am grateful to have the opportunity to speak tonight. I cannot be the only person who arrived into a political career for some reason other than mere party ideologies. I had sufficient experience of the waste of war to become interested in politics. I am sure that many hon. Members on both sides of the House found themselves, by their natures and beliefs, able to settle for one or other of the party ideologies in order to serve higher causes.
    I am grateful for having been called this evening, but it is a greaty pity that we are once more going through this debate. We have just had the renegotiations, whatever they were, and we are now about to have the referendum, whatever it is. How did it all happen? I regret that we have to lay some blame for this situation upon the Prime Minister, one of the three patrons of the European movement. It was he who in the late 1960s would not take "No" for an answer, and he who went with the then Foreign Secretary round the capitals of

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    Europe starting the negotiations which were to be continued in the early 1970s with the objective of entering the EEC. Now, because of the difficulty of half of the Labour Party producing a manifesto that talks about agreement in principle, but wanting better terms, we have this wretched, dubious device of a referendum which is going to consume and waste the next few months of valuable British time.
    My hon. Friend the Member for Banbury (Mr. Marten) did me the honour of referring to a letter which I wrote to the Daily Telegraph I believe it is fair, because it must have caught him a little bit in the raw, to refer to the facts which I mentioned in that very short letter. What is the line up as we enter the referendum phase? Those who want Britain to stay in Europe include the great majority of the Conservative Party, the great majority of the Liberal Party and approximately half—I do not want to use emotive words—of the Labour Members, those who are sometimes known as the moderate half. There are also British industry, the National Farmers' Union and our partners in Europe and America. Those are the people who want us to stay in Europe. Who wants us to come out? In this House. one half of the Labour Party—
    Mr. Richard Body: Has my hon. Friend not left out an important wing of the Communist Party?
    Mr. Fairgrieve: I am now dealing with those who wish us to come out. They include, as I have said, the other half of the Labour Party, namely, the Tribune half, the Communist Party, the militant and Marxist leaders of certain trade unions, and Russia. I do not wish to say anything more. It is for the people of this country to make their judgment.
    There are two views. Those who wish us to stay in want to see a strong Britain in a united Europe, and those who want us out wish to have a weak Britain in a disunited Europe. When I think of a countryman of mine many years ago, Keir Hardie, and what he meant when he talked about international socialism and the brotherhood of man, I wonder what has happened to the thinking and philosophy of some Members opposite.
    Mr. John Ovenden: He was not talking about the Treaty of Rome.
    Mr. Fairgrieve: It is with sad, natural Scottish regret that I have to include the Scottish National Party with those who are lined up against the EEC. I did not include it in the previous list, because I believe that its reasons are completely different and to some extent tactical. It is an anti-Westminster establishment decision. I am certain that in the three unlikely events of, first, our coming out of Europe, secondly, the United Kingdom's being split up, and, thirdly, the SNP's being the Government of Scotland, the first thing it would do would be to slap in an application to join the Community, to spite the English.
    Mr. Welsh: Where does Scotland stand in the hon. Gentleman's United Europe? Shall we have independent representation? Denmark, with a similar population, has about 22 permanent representatives of various stature, whereas the Scottish Office has one relatively minor official.
    Will the Scottish Conservative Party stand up for independent Scottish representation in Europe or for the status quo?
    Mr. Fairgrieve: If the hon. Gentleman had heard some of the things which I have been saying for years he would know that I have advocated immediate application by all member States of Article 138 of the Treaty of Rome, which calls for direct elections by universal suffrage. That means Scotsmen electing people direct to Strasbourg, and not having them chosen for them by a Westminster Government.
    Mrs. Ewing: What about the Council of Ministers?
    Mr. Fairgrieve: Scotland is the one part of the United Kingdom that has always been international. This has been manifested in history by the Old Alliance, Bonnie Prince Charlie, and the Prince across the water. We have sent soldiers to India and statesmen to New Zealand and Canada. We were the one international part of the United Kingdom. It is ridiculous that Scotland should ever consider coming out of the part of the world that she has been in for all her history.

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    I turn to a few other points. The first is the question of the grants. We are receiving huge grants from Europe. There is the question of regional policy. The fact that we should receive from the £500 million Community regional fund, £150 million over the next three years, was scorned. That is only the start. I want to remind people who denigrate the Community on this subject of what the facts are. There are nine members of the Community, of which we are one, subscribing to regional funds. Of those nine members, three are creditor nations, receiving more than they are putting in. Those nations are Italy, Ireland and the United Kingdom. Much maligned France, is getting less out than she is putting in, though I grant that it is not by much. Out of common decency we should remember these facts.
    We know that the grants will mean a lot to industry and employment in this country, particularly Scotland, which will receive a large proportion of the United Kingdom funds. This is vital to my constituency of Aberdeenshire, West, one of the most important beef-producing areas of the United Kingdom. We are glad that the National Farmers' Union has been followed by its counterpart in Scotland in advocating that we should stay in Europe. It amazed me to hear the SNP spokesman for agriculture only yesterday going against his own NFU. He is meant to be a practical farmer.
    Already money is coming in the form of grants to the fishing industry for building fishing boats in Scotland. At a time when we are receiving grants to help the fishing industry in Scotland a non-EEC country, Norway, is dumping subsidised cod in Scottish ports.
    In my constituency there are four major paper mills. Their main export market is now the European Community. They know what it means to them if we come out of Europe. There are two textile mills, which form parts of large British organisations. The textile industry has stated quite clearly the catastrophic effect our coming out of Europe would have on it.
    On the question of national sovereignty I make one brief point because it will come up in the next three months. About the faceless bureaucrats, there are fewer bureaucrats in Brussels to look after 250
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    million people than there are in Scotland to look after 5 million Scotsmen. That shows the level of the exaggeration on this point.
    Mr. Ovenden: They are extra.
    Mr. Fairgrieve: The national sovereignty and the strength of Germany and France have increased by their being members of the EEC, whereas our sovereignty has decreased by not being a member. Anyway, what real sovereignty is left in a world that can destroy itself overnight by nuclear holocaust?
    We must look to future generations, to the future of mankind. The development of the EEC is a step along the way. If we in Europe are ever to repay the debt we owe to the 25 million people who were killed, maimed and wounded in two world wars, then Europe must unite.
    6.50 p.m.
    Mr. D. E. Thomas: It will not surprise hon. Members that I have a rather different perspective of the European Community from that so far shown in the debate. I am concerned not so much with the impact of the Community on Britain as a whole as with the impact of continued membership on the Welsh economy, on Welsh industry and agriculture, and particularly on the political developments now taking place within the United Kingdom concerning devolution and the type of institutions we are creating in Wales.
    It is clear to me, from what I hope was an objective reading of the renegotion White Paper, that the so-called terms cannot be described as a major issue in the debate. The contributions from both sides of the argument have not centred on the terms. That confirms me in the view that the renegotiation exercise has brought no fundamental change in the structure of the treaties or the way in which the Commission and the Council of Ministers are interpreting them. The very fact that the renegotiation exercise took place as part of the normal working programme of the Community indicates that for the Community it was a nuisance to get out of the way rather than a fundamental exercise.
    That means that the fundamental objections that we in Plaid Cymru had hack in 1967, when my hon. Friend the Member for Carmarthen (Mr. Evans) was

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    first in the House and spoke in the European debates then, and in 1971, when the Conservative Party took the British and Welsh people into Europe without consultation, still stand. Those objections were to the type of supranational institution that the EEC is. We have had bitter experience of being part of a political and economic union throughout our modern history. We have been subject to policies of economic, industrial and political centralisation, and we know what the effect of those policies on peripheral areas and regions can be.
    Our major fear, which is the basis of our objection to Welsh and British membership of the EEC, is that Wales will become the periphery of a periphery, with no representation in the institutions of the European Community. But even if we were to have representation in the type of institutions that exist in the Community, even if we were to have the type of directly-elected European Parliament that is canvassed by some hon. Members, the result would be to create a supranational European structure in which the smaller regions and constituent nations would be even less likely to have a clearly-heard voice.
    The European Community faces a fundamental contradiction in its structure. If it is to democratise itself, all that it will do is to create massive so-called democratic institutions, so out of touch with the people they represent that it will be impossible for them effectively to scrutinise policy decisions or to produce legislation which can be relevant to all the people they are supposed to govern. It is impossible to develop democratic institutions along the lines now envisaged by those who have advocated a directly-elected European Parliament.
    The results of centralisation, which we have experienced in Wales, will be exacerbated for Wales, Scotland and the North of England within the EEC. The current net flow of direct investment capital will make it more difficult to diversify and strengthen the Welsh economy. The tendency to concentrate economic development in areas already most favoured by industrialists will continue. We believe that the central areas will become relatively more prosperous and the peripheral areas relatively poor. It is
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    clear to us from any objective study of the economic structure of the EEC regions that the Community has not benefited Brittany or the other peripheral regions.
    It will be argued that the regional fund is only in its infancy and that regional policy is only now getting off the ground. That only strengthens my argument. Any European structure which gives such a low priority to regional policy and a social fund cannot call itself a community. It cannot care for the peripheral areas or, for that matter, the 25 million people in Europe living below the poverty line, living in relative social deprivation. The over-centralised economic and political structure of the Community can mean only that there will be further disbenefits to the periphery—to Wales, Scotland and the regions.
    One section of the White Paper caused me much concern. We have advocated that there should be a special development agency for rural Wales and that there should be special policies to induce manufacturing industry to come to Mid-Wales. Yet we see in the White Paper that a request has been made for a special derogation from the treaties and the policies of the Community in respect of the Highlands and Islands Development Board. That confirms my view that the board is contrary to the treaties and the policies of the Commission and the Council of Ministers. That is why a special derogation must be sought. Therefore, I am concerned about the flexibility of a Welsh Government, when the Assembly is set up, to pursue their regional policies and to have the type of incentive or infrastructure policy that they would want. That will be severely limited by being within the EEC competition policy structure.
    We have seen no fundamental change in the structure of the common agricultural policy as a result of the renegotiations. Yet that policy has increased the income disparity between various parts of agriculture. Farmers at the higher end of the income bracket received more, whereas those in the hill and less-favoured areas, although we now have a concession in those areas under the operation of the CAP, receive relatively less in terms of the total spending under the CAP than they would receive under a deficiency payments system. The burden on the lower income taxpayer and

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    the pensioner is relatively far higher under the CAP system than under the deficiency payments system.
    The National Farmers' Union and the Farmers' Union of Wales talk about the need for a five-year development programme for agriculture. The British Government's ability to invest more in agriculture will be restricted by the common agricultural policy if we remain in the Community. Last year's beef crisis reflected the British Minister of Agriculture's lack of flexibility within the CAP system. I do not see why the farming unions in particular retain their commitment to continued membership.
    Our view, particularly at this time in the political development of Wales, is that we will not have ourselves put into the straitjacket of the European Community. We will not prejudice the potential sovereignty of the Welsh people, when we have our Assembly and a Government in Wales, by committing ourselves to an institution in which we have no representation and over which we have no control. I am certain that that is the view of the majority of the Welsh people.
    Mr. Speaker: Order. I am grateful to the hon. Member for Aberdeenshire, West (Mr. Fairgrieve) and the hon. Member for Merioneth (Mr. Thomas) for making speeches much shorter than most of those made by their predecessors. I hope that this will continue.
    6.59 p.m.
    Mr. Alan Lee Williams: The hon. Member for Merioneth (Mr. Thomas) made an interesting speech. I always enjoy listening to him. He is my favourite nationalist in the House, because he does not lecture or hector the House. But the hon. Gentleman makes a mistake in thinking that the European Community is as static as he imagines.
    My right hon. Friend the Foreign Secretary has shown in his renegotiations that quite a lot can be achieved within the Community, particularly in respect of the common agricultural policy. Of course it is not perfect—we know that—and it still has not been fundamentally changed. It still very much benefits the French farmers. The House knows that, and I do not think that the Government have made any attempt to conceal it from the House. But we still find our-
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    selves in the position currently of renegotiating this aspect. It is an on-going process. Therefore, there is a prospect within the European Community of meeting some of the difficulties which the hon. Member for Merioneth has mentioned.
    I would say to my right hon. Friend the Member for Jarrow (Mr. Fernyhough), who spoke with great passion—I only wish that I could match his eloquence—that the only chance of meeting his major point about helping the needy and the poor is by concerted action with our European partners. It is beyond the capability of the United Kingdom to do it alone. I therefore think that we should try as my right hon. Friend the Foreign Secretary has done in the period of renegotiation, to get major concessions. I think we have obtained some concessions. Again, however, they are only part of the story. But it is an on-going business, and in this direction we must do more.
    During the course of the past two days we have had a series of what I consider to be misleading descriptions of the European Community. The hon. Member for Newham, South (Mr. Spearing) said that it was "pale blue". He implied that the European Community was for the benefit of what he called capitalists. I would say to him that if he likes to make a detailed examination—and I have asked my right hon. Friend the Member for Jarrow to do this, too—of the areas of public ownership that are to be found within the European Community, he will find that Britain is not at the top of the league but that it is behind France and Germany. He will find that there is no restriction within the workings of the Treaty of Rome which will prevent the Secretary of State for Trade or the Secretary of State for Industry from coming to the House with proposals for radically reorganising the British economy. There are no restrictions that one can see in the practice of the European Community.
    It is very important to say that because I think it will be one of the arguments used by the opponents of staying in the Community that somehow or other a British Chancellor of the Exchequer will have to clear his Budget statement with our partners before he presents it to the House. I do not believe that to be the truth of the matter at all.

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    The right hon. Member for Stafford and Stone (Mr. Fraser) made what was I thought a most interesting speech because he put the matter in historical perspective, and one must see this debate, which has, after all, been going on for 15 years, in historical perspective. But he also touched on the real nub of the problem as far as we on this side of the House are concerned when he mentioned the right hon Member for Sidcup (Mr. Heath), because it was he who negotiated British entry into the European Community. I said outside at the time, because I had lost my seat and was no longer in the House, that I thought that it was a commendable achievement, but the main missing ingredient in the presentation of the case by the right hon. Member for Sidcup was the common touch. The general population, particularly the people who support the party on this side of the House particularly trade's unionists, thought that the European Community was quite alien from what we were trying to achieve.
    I think the arguments were pitched in the wrong way. I am not trying to escape my own share of responsibility, because I had a hand in that campaign, since I have been a pro-Marketeer for a number of years, but I thought at the time and, looking back, feel retrospectively very strongly, that the emphasis always on the benefits purely in material terms—although I think they are there—were wrong and that some of the essential idealism had gone out of the debate.
    I must say that I am less of a sceptic than my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden) basically is about the European Community, although I fully understand his position. I was attracted to the European Community idea for its idealism, because I believed that it would be possible, with all the imperfections of the Treaty of Rome, to reorganise Europe in such a way that not only would we rid ourselves of the horrors of the two world wars but we would be able to play a major part in world politics; that we would be able to evolve into an interdependent relationship with the United States rather than a one-sided relationship in which the United States had all the power and most of all the influence.
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    This was part of the basic idealism which motivated the European movement, and I do not think that need necessarily and wrongly be interpreted as anti-American, because I happen not to be anti-American.
    At the same time, there must be an awareness by all of us, now that we go towards what I hope is the final hurdle in respect of British membership, that what we are trying to create here is an outward-looking Community. a Community which is concerned about the Third World. But we must also be aware that because of the difficulties which we have at the present moment, the industrial problems and some of the other problems which my hon. Friend the Member for Ladywood mentioned, there is a mood in this country—to be found not only in the United States, but in this country—of apprehension. People are uncertain. They hear many making speeches which give the impression that we are now facing—as indeed I think we are in many respects—the gravest crisis this country has faced since the inter-war period. People are therefore apprehensive.
    In these circumstances, those of us who wish to see Britain firmly in Europe must argue the positive case that the only way we can overcome some of our problems is by working with like-sized and like-minded Powers in Europe; and we must admit at the same time that gradually there has to be a loss of sovereignty. I see no reason why we should run away from this because, if I have to generalise, I think that most British people would be confederalist rather than federalist. I think that most people who think the problem through in respect of the European Community realise that we are entering into a relationship with supranational implications, and it is only fair that those who argue the case should make that absolutely clear.
    Although my right hon. Friend the Foreign Secretary has indicated that in the period of renegotiation the move towards monetary union has been temporarily put aside, it would be misleading the House to give the impression that this has been totally abandoned, because in fact it is part of the European idea. The timing is vitally important, and I agree with my right hon. Friend that to talk about monetary union by

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    1980 against the backcloth of a declining economic situation was dangerous nonsense.
    Nevertheless, I firmly believe that the European Community will give us a chance, not to resurrect the glories of the past—because that is impossible—but, with France, Germany and the Benelux countries, to build a Europe which is sufficiently powerful in the areas of technology and science to compete on equal terms with the Soviet Union and the United States. That is no bad thing.
    7.10 p.m.
    Sir George Sinclair: The Government have announced to the House that they have made considerable improvements in the terms of our membership of the EEC. I wish to add my congratulations to those expressed by other hon. Members on their achievement. But that was always possible once we were members and started negotiating with friends who were fellow members and who were dedicated to the proposition that an unfair arrangement for any member would weaken and damage the whole Community.
    I welcome the Government's achievement, but I am sad that there has been not one word of acknowledgement from the Government benches of all the work done by those representing Britain in the European Parliament—all drawn, regrettably, from the Opposition benches in this House and in the other place. They have faced all sorts of difficulties, without much help and they have worked extremely hard. Everyone in the European Parliament will, I think, allow that they have done much to gain acceptance and understanding of the British case and have played a major background role in the Government's renegotiation. It is very poor-spirited of the Government not to have acknowledged this achievement.
    Today we are debating, not the small print of what has been gained in Europe, but the main issue. What is the great value of our remaining in Europe? The basis of it is identity of interest—a point well brought out yesterday by the hon. Member for Berwick and East Lothian (Mr. Mackintosh) and today by my right hon. Friend the Leader of the Opposition. There is a real identity of interest between this country and our fellow members of the EEC. It has been built out of
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    our common experience of a war-torn Europe.
    The main identity of interest is political. It is in security and defence for the people of the West working in unity. If that is not achieved, we shall face two threats: first, that Europe will again be divided and will tear itself apart, and, secondly, that we shall not be strong enough to stand against the military strength of the USSR, which is increasing year by year in spite of all the talk of détente. Our basic duty to our people is to ensure that they live without fear and in a world in which there is stability.
    We have an identity of interest in the sort of open society we are trying to create in Europe where individuals can fulfil themselves and where we can, by hard work and hard thinking, achieve a standard of prosperity for our people.
    We share a common interest in our need for raw materials and food from outside the EEC—a point emphasised by my right hon. Friend the Leader of the Opposition.
    A major role for Europe is to provide a large, civilised and understanding bioc which will recognise its interdependence with the rest of the world—a bloc which will realise how important it is for peace that the Third World shall share some of the prosperity of the industrialised world. There is every sign that, in the EEC, this interdependence is recognised. It has now been given institutional form and action has led to agreements, such as the Lomé Convention, to help the poorer countries.
    Another interest which has always been in the minds of our people is our relationship with the Commonwealth. I speak as someone with deep family connections in Canada, Africa, India and Australia. For me, one of the great strengths of our membership of the EEC is that it is supported by all the people with whom we have been associated most closely in defence and trade matters and in bringing communities to independence. As independent Commonwealth countries, they are fully in support of our remaining members of the EEC and in helping them to establish better and more profitable relations with Europe. As members we can help to put their case to our fellow

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    members in the EEC, many of whom have much experience of dealing with the Third World.
    There is also our relationship with America. For that we are grateful, remembering two of the greatest trials of freedom in the Western world—the First and Second World Wars—and the Marshal Plan. The Americans have always been major supporters of a strong and united Europe which could share with them the burden of defence of the free world and the maintenance of free societies throughout the world. Therefore, all our friends outside the EEC support our remaining in Europe.
    People say that membership of the EEC is a good thing for Britain. It could be a good thing for Britain. It is what we make it. Membership is no solution to our internal problems— a point which has been made by many speakers. Europe provides us with opportunities to recreate our industrial vitality and to regain our self-respect by learning once more to pay our way in the world. So far we have not taken advantage of the opportunities offered. We are skulking about with self-inflicted industrial wounds and dislocations when we should be thrusting our way into the trading opportunities provided by Europe. Europe will not solve any problems for us. How-ever, if we take advantage of the opportunities that Europe is opening up to us, we shall serve our people well: we shall be able to restore our self-respect, take part in the greater community of the EEC and help Europe to rebuild its strength; we shall contribute to stability and peace in the world. Now, it is our duty to give an unmistakable lead to the country. That is what we are sent here to do. We should give it in this debate and in the two Divisions that follow in this week. We should make it clear that our judgment is backed by many groups in this country—the Confederation of British Industry and the National Farmers' Union, as well as by the leaderships of the great political parties. We should make it abundantly clear that our opportunities, responsibilities and duties lie in a united Europe. I hope that the votes at the end of this debate will reflect our determination and the leadership of this House.
    7.21 p.m.
    Mr. John Ovendon: It comes as no surprise to me to find that pro-Marketeers in this debate are concentrating upon the political advantages rather than the economic advantages of membership. Strangely enough, two years ago the position was precisely the reverse. We were then being told of the enormous economic opportunities which awaited us in Europe. I am not surprised that that is not being said today because we no longer need to look into the crystal ball. We have the facts. We can look at the books, and we know what the effect of membership of the Common Market has been on this country's economy and balance of payments.
    I would not attempt to blame all our economic ills upon our membership of the Common Market. I remind the proMarketeers that our membership was supposed to make it easier for us to solve these problems and that we were supposed to have before us wide opportunities which would increase the prosperity of this country. That has not happened. No longer, therefore, do we hear the economic argument about Europe. We hear some strange argument about Britain's withdrawal from Europe being a threat to world peace—and a stranger argument I have rarely heard. Even if one is an advocate of the cold war politics, which we have heard advocated so splendidly by Conservative Members today, surely a better vehicle for pursuing those policies is the North Atlantic Treaty Organisation, which is quite irrelevant to the EEC.
    We are supposed to be debating the White Paper presented to us by the Government as a result of their renegotiation of the terms of membership. The Labour Party's election manifesto, on which all Labour Members were elected, specifically rejected the terms which were negotiated by the Conservative Government for British membership of the Common Market. The present Government came to office pledged to conduct a fundamental renegotiation of those terms and to reconsider membership in the light of that renegotiation so that they could make a recommendation to the British people. The logical assumption is that success in that renegotiation would lead

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    to a recommendation to stay in and an unsuccessful outcome would lead to a recommendation to leave the Market.
    The question before us seems to be whether that renegotiation has been successful to the extent that membership, which was unacceptable a year ago, is now desirable. If we are to claim that fundamental renegotiations have been successful, we must be able to demonstrate that there have been fundamental changes as a result of those renegotiations. I am in no doubt that we fail upon that test.
    First, the Labour Party manifesto rejected the imposition of a common agricultural policy which prevented access for low-cost producers to the British food market. After a year's renegotiation the principles of the CAP remain entirely intact. We have not altered one fundamental point of a policy specifically designed to protect inefficient European farmers by maintaining EEC prices above world levels. It has been argued, strangely enough, that the CAP can be used to provide cheaper and assured supplies of food. That is a gross distortion of the whole purpose of the CAP and totally inconsistent with the machinery of import levies and denaturing which form the framework of the CAP.
    Throughout this debate there has been a determined attempt to pretend that import levies are not affecting food prices in Britain, yet we know for a fact that over a whole range of basic foods levies have forced up prices. I find it quite inexplicable that certain hon. Members should admit that levies are being imposed on imported food and in the same breath claim that this has no effect upon prices. Sugar has been quoted time and again by pro-Marketeers as an example of how we benefit from the CAP. That is not in any way surprising because it is virtually the only food which can be obtained inside the Common Market more cheaply than outside, and that will be for only a limited period. In contrast the CAP prevents us, by its ban on beef imports, from obtaining beef which is now cheaper in the world markets than it is in the EEC.
    The facts of life show us that world prices for food are now falling and that the CAP will come back into its own, that it will play the very rôle it was
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    designed to play and keep the price of food in this country above world levels.
    Our objective as regards the Community budget was clearly defined in our manifesto. It was defined as securing
    "New and fairer methods of financing the Community budget."
    The manifesto commitment continued:
    "Neither the taxes that form the so-called own resources' of the Communities, nor the purposes … on which those funds are mainly to be spent, are acceptable to us. We would be ready to contribute to Community finances only such sums as were fair in relation to what is paid and what is received by other Member countries."
    That achievement of renegotiation should hardly be mentioned in the same breath as the statement from our election manifesto.
    There has been no change in the system of raising finance for the Community budget. There has been precious little alteration to the distribution of the budget proceeds. We have been offered purely a compensatory mechanism to refund part—I stress, only part—of our excess contribution to that budget and then only in carefully defined circumstances.
    Two basic problems arise as a result of this mechanism. What happens if we fail to satisfy the conditions laid down? If, for example, our per capita income rises above 85 per cent. of the Community average, we would qualify for no compensatory payment. As I understand it, there would be no limit to the unfairness of the contribution we would be asked to shoulder as a result of membership of the Community.
    The other problem is that this mechanism is for a limited period of seven years. There is no guarantee that it will be renewed. As we have not changed the basic nature of the financing of the Community in the renegotiation, we would return to that should this mechanism not be renewed. I ask my right hon. Friends to explain what guarantees they have for any continuation of a compensatory mechanism. In short, we cannot fairly claim to have achieved the objectives of renegotiation. The real question before us is whether membership is desirable without the changes which the Labour Party demands.
    The answer to that question must be a firm and clear "No". There are not

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    sufficient economic advantages in membership, as we have seen over the past few years, to outweigh the burden placed on us by the budget contribution and by the CAP. Excessive contribution to the budget represents not merely an injustice which will lead to growing resentment in this country against the Community but a surcharge on the living standards of working people in Britain.
    An unfair and excessive burden on our balance of payments can only lead to a corresponding diversion of resources into exports to compensate for that situation. That must mean a reduction of home consumption and a reduction of living standards for the British people. We have already suffered enough in this country for the massive and unavoidable increases in oil costs without consciously and deliberately adding to the burden, as we shall do if we remain members of the Community.
    Equally, I believe that continued acceptance of the common agricultural policy would prove to be a self-inflicted wound. That would largely undermine either our living standards or our ability to compete in EEC or world markets. There is little advantage in the reduction of tariffs for our exports if we are to take on board the problem of higher food prices which will lead to higher wages, which will lead to our pricing ourselves out of the very markets in which we are claiming now to have advantages.
    What do we do if we leave the Common Market? I have sensed a feeling of despair in speeches as though there was no future outside the EEC. It is as though this country did not exist before it joined the EEC, as though the rest of the world had somehow slipped into the sea since this country joined the Common Market. This is the insular approach of the Eurofanatics to which we have become perhaps immune over the past few years.
    It may well be that the EEC countries would choose in their own interest to continue trading with us. I find it a strange argument which says that the EEC, which has gained so much from free trade with us, would cut off its nose to spite its face by re-erecting tariff barriers against us. The loss would he on the part of the EEC countries if they
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    did so. It is inconceivable that, when countries are running such a massive surplus with another country, as the EEC countries are running with Great Britain. there should be any serious consideration of tariff barriers being erected.
    I remind my hon. Friends, particularly my right hon. Friends, that the Labour Party exists to protect and promote the living standards of working people in this country. We must ask whether Common Market membership under the terms open to us is consistent with that commitment. In my view it is totally inconsistent. Big business in this country is unanimous in its support of British membership. It is obviously attracted by support for the principle of free competition which is enshrined within the Treaty of Rome.
    I remind my right hon. Friends that this party exists to distort free competition. This party came into existence to prevent the free working of the market. We have seen some strange arguments in the White Paper. These have been repeated in the debate. It is suggested that we should forget the Treaty of Rome and should look only at present practice. It is said that we should ignore the prospect of economic and monetary union because it has not been talked about and that we should ignore references to the harmonisation of tax policies because that is not happening at the moment.
    It is an appalling principle that we should consider joining a Community the rules and objectives of which we intend completely to disregard. That would be bad for Britain and it would be bad for Europe. Either we go into the Community with full knowledge of the obligations placed on us and prepared to work for the objectives of the Community, or we get out of the Community. It has been said that there is no future for us outside the Community. That ignores the economic facts of life. Above and beyond that it is the politics of defeatism and of despair and it is the advocacy of tired men who lack political imagination.
    7.35 p.m.
    Sir John Eden: Unlike the hon. Member for Gravesend (Mr. Ovenden), I welcome the White Paper. I am glad that the improvements achieved are sufficient to enable the Government, or at any rate a large part of it,

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    officially to support our continued membership of the EEC. The White Paper made two things clear. The first is that the Community is flexible and the second is that it is easier to exert influence on its institutions and policies from within than from outside.
    The word "renegotiation" is misleading. The original terms established the basis for entry and were negotiated from outside. They have now been improved and modified after entry from within. That process of adaptation and change will Continue because the Community is not static. It is living, organic and developing. None the less, the progress made, as set out in the White Paper, is a tribute to our negotiators. It is also a testimony to the understanding, tolerance and good will of our Common Market partners— attitudes that would be forfeited if we now decide to withdraw.
    Opponents of our membership rest their case, as we have heard today, largely on the issue of sovereignty, by which they seem to mean the ability to take on our own decisions affecting our own interests. How real can that be today? Given the gravity of recent international events, given the persistence of Communist penetration in many parts of the world, who can doubt that today's urgent need is for free nations to identify their common interests and combine their resources in resisting further encroachment?
    There are two matters in which we, a small and heavily populated island, have a major interest. They concern food and exports. We have to import almost half our food requirements. We must therefore be able to sell the products of our factories to pay for it. So the price of food to us is important and it is not without significance that food accounts for more than half our total trade deficit with the EEC.
    That underlines the fact that since 1972 our membership of the Community has brought us a considerable price advantage in certain important items of food. But our interest in food is not limited to its price. To an even greater extent we have an interest in the continuing supply of food. Our membership of the Community will help to secure that for us, just as that same membership, by offering to us the best prospect for long-term economic growth, will enable us to expand
    1100
    our industrial base to pay for it. That will ensure for us a much better independence, a much more worthwhile sovereignty, than any realistic alternative international relationship could produce.
    Sovereignty is not, after all, a document, a piece of paper, or even a treaty. In reality, sovereignty is our economic strength, our self-sufficiency and our political stability. Sovereignty is also and pre-eminently the maintenance of parliamentary government.
    I agree with the Prime Minister that these aims are more likely to be won by our remaining members of the EEC. There can be no doubt, as the White Paper makes clear, that their atttainment would be infinitely more difficult if we were to withdraw. That being so, I hope that before referendum day the Prime Minister will drop his low-key approach and, in the words used last night by his right hon. Friend, the Minister of State for Foreign and Commonwealth Affairs, he will triumphantly describe to the British people the advantages of keeping Britain in the enlarged European Community.
    7.39 p.m.
    Mr. Maurice Edelman: The right hon. Member for Bournemouth, West (Sir J. Eden) has properly set out the advantages of remaining members of the European Community, to which I fully subscribe. Much of the discussion about the question of renegotiation or negotiation is a matter of semantics. What is clear is that the negotiations on the limited objectives set before himself by the Prime Minister, set out in the manifesto, have been fully realised. To that extent I commend the achievements of the Prime Minister and the Foreign Secretary.
    The debate so far has been conducted in a reasonable and constructive way and I have no doubt that that atmosphere will largely be echoed in the country although a number of bogy words such as "Brussels" and the "Commission" will be used to frighten people. No doubt words such as "Eurofanatic", which was used by my hon. Friend the Member for Gravesend (Mr. Ovenden), will be used to intimidate the public. But I believe that the majority of the British electorate will give full weight to the real issues and to what it

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    means to Britain in the future for us to remain a member of the Community.
    The idea of the European Community was born out of the disaster of war. I was a member of the very first British delegation to the Council of Europe in 1949, where some of the ideas which eventually became the basis of the Treaty of Rome were first formulated. Although my hon. Friend the Member for Gravesend was rather derisive about the political content of the Treaty of Rome and the purpose of the European Community, the political idea that was then put forward and which remains the basis of the European Community today was that there should be a community system of political and economic co-operation straddling frontiers and enmeshing friends as well as former enemies in a united purpose.
    That project was heightened later by the admission of the Germans to the Council of Europe and so, for the first time, we saw the creation of a community instrument, the Coal and Steel Community, which gave an assurance that the French and Germans would never again go to war for the coal and steel of Alsace-Lorraine. The object of the community system was to tear down Customs barriers and to enable the peasants— who, I remind my hon. Friend, are the working class of Europe— to have guaranteed prices for their products to protect their livelihood.
    When talking about the common agricultural policy it is a mistake to think of the farmers of Europe in terms of millionaires driving around in Cadillacs. They are ordinary working people, with sometimes very modest and inefficient farms, who have led depressed lives and are seeking to elevate their lives and to obtain a fair return for their labours.
    What we wanted to do at this first great meeting of the Council of Europe, which was attended by Hugh Dalton, Herbert Morrison and Winston Churchill, was to seek the economic and political integration of Europe and to put an end to the Balkanisation of Europe, which was the origin of the fratricidal wars which had continued for over a century. Our purpose was to try to avoid the tribal nationalisms which in the past have bedevilled, and even today still bedevil, the condition of Europe.
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    Those who say that the purpose of achieving peace which the founders of the Community of Europe put before themselves is now anachronistic should think again. These tribal nationalisms are alive in the world today and are responsible for some of the greatest miseries which confront Europe and the world in 1975. How much better would it be if in the Middle East there were some kind of economic and political community linking together those countries which are liable to go to war.
    It has been suggested by some of my hon. Friends that the Treaty of Rome is a capitalist racket. That was not a description given to it by our Socialist comrades who were the founders of the concept of the Council of Europe and the European Communities. They were people who believed in the ideal of the European Community. They believed on that basis in a fraternal concept which was put forward by such excellent Socialists as Andre Philippe of France, Henri Rollin of Belgium and Schumacher— men of the Resistance and of the concentration camps. To suggest that those people would promote a capitalist racket is an insult to their memory. My hon. Friend may smile but we should be careful of the way in which we speak about them. They were men who had seen the evils of perverted nationalism. They were men who during the war suffered in camps and in the Resistance. They came out determined, as they put it, to create a better Europe, and they wanted to try to establish a mechanism for so doing.
    Mr. Ovenden: I do not want to give my hon. Friend the wrong impression. I was not smiling about that. I intended to point out to him the supporters of Socialism on the Opposition benches who were expressing their support.
    Mr. Edelman: Not only my hon. Friends but many of our friends and comrades in constituencies should know that the European Community is a concept in which Democratic Socialists played a full part, and the principles they then enunciated are equally valid today. They did not want a diktat from the centre. They wanted to achieve planning by consent, and that was the democratic principle which they put forward. It was they who put forward the idea of a tripartite organisation in the Economic and

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    Social Council. It was they who put forward the idea of co-operation between Government, employers and trade unions
    When my right hon. Friend the Secretary of State for Industry talks about planning agreements and tripartite planning, he should not imagine that he invented the idea. That idea has been in existence in Europe for many years. It was at the basis of the Monet plan for the modernisation and re-equipment of French industry. That most successful plan and enterprise was carried out years before my right hon. Friend ever thought of tripartite planning or planning agreements. I am happy to see that he has now caught up with those desirable concepts.
    I will touch briefly on the question of sovereignty, which is essential to our debate. It is true that in the early days before the European Communities were formed, in the Conference of Messina and similar organisations, there were those who looked forward to a federal Europe. In those days, I recall. the division was between the federalists and the functionalists— those who believed that by functional co-operation it was possible to knit Europe together and to create a Europe which would be different from the institutionalised Europe we arc talking about today.
    One of the products of that functional concept was Concorde. I have always been a supporter of Concorde. Although initially I supported functional co-operation, looking at the example of Concorde — where there is a treaty without joint accountability, a treaty without proper responsibility, a treaty in which there has been a surrender of power without a compensatory control— I must come to the conclusion that such an institutional arrangement is necessary to knit Europe together.
    Every international treaty means a surrender of a certain amount of sovereignty. It means an agreement either to do or not to do something. In surrendering that element of sovereignty for a specific purpose, in any international treaty we are carrying out what we have done under the Treaty of Rome. We have abandoned a measure of sovereignty for a specific purpose, but we have not abandoned our sovereignty. I believe that that willing surrender of sovereignty for a specific
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    end, with delegation of power for a particular purpose, is wholly desirable. Those of us who support the idea of the European Economic Community should not feel any sense of shame or diffidence about affirming that we are in favour of this limited cession of sovereignty for a specific purpose. That, indeed, is how it has turned out to be.
    It is true that there are weaknesses in the structure of the Community and perhaps in the application of the Treaty of Rome. If there are weaknesses, let us correct them. We shall not correct them by skulking or abstaining. We shall correct them only by sending a delegation to the European Parliament and by seeking to influence the evolution of the Community. I believe that that is the way to participate and the way in which to amend the admitted imperfections inside the Community.
    I accept fully that not all the institutions of Europe are perfect, but equally imperfect are our own institutions. I entirely agree that the European executive must be checked. Equally, I believe that our own executive must be checked. I think that the improvement of the Commission and of the Eurocrats lies within our own power. They must be called to account. As I have said, the first way in which we can do so is for the Government, when this matter is decided, to send a delegation to the European Parliament so as to strengthen its control of the Commission. The power to control the Commission already lies in the European Parliament. It is up to us to take the necessary action to make it effective.
    I have touched on sovereignty, and I add to what I have already said by pointing out that sovereignty is never absolute. Sovereignty lies in the power to exercise. influence and to affect decisions. To that extent I feel that within the greater authority of the European Communities our sovereignty, far from being weakened, will he extended. My right hon. Friend the Minister of State for Foreign and Commonwealth Affairs, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), has very properly said that President de Gaulle. in whom there was no greater nationalist. found himself perfectly at home within the European Economic Community after his first hesitations. There has never

    1105
    been any question of France losing its glory, prestige or self-dedication because it has become a member of the Common Market. What is true of France is true of Germany, Italy, Belgium and Holland. All of those countries have maintained their national personality.
    I say to my hon. Friends who are nationalists that their fear of losing their national personality and of being smothered by this greater entity is false. On the contrary, I believe that they will have a greater opportunity than they have anticipated of defining and expressing their national personality, even as nation States, within the wider framework of the Community. I believe that they will have greater opportunities than they have had in captive isolation, as it were, within a smaller organisation. That is not to say that I support in any way the Balkanisation of Europe. That could lead to the greatest evils. On the other hand, I believe that sovereignty and national identity can and will be preserved within the Community and that ultimately we shall see not only the strengthening of Europe as an entity but the flowering of the individuality of regions, nations and smaller groups.
    Before I conclude I must refer briefly to the common agricultural policy and the question of cheap food. Everyone in this House who seeks to obtain cheap food for the British people is not only justified but obliged to do so. I am certainly strongly in favour of any policy which leads to the cheapening of the cost of living and the cheapening of food. At the same time, we must recognise that within the structure of the Community one of the aims is to give some sort of security and a fair return to the producer, to the farmer, to the peasants about whom I was talking a short time ago.
    Within the framework of the Common Market the CAP, for all its imperfections, has the validity that it is the quid pro quo which the peasant workers of Europe seek in exchange for the right of the British industrial worker to send his industrial exports into a greater market without any barriers.
    It would be entirely wrong to think of the CAP as a protective mechanism designed to preserve the self-interest of a handful of people. On the contrary, I believe that the CAP, despite some of
    1106
    its shortcomings, offers the opportunity of providing a continual supply of food in an age in which not only world supplies of food are becoming scarcer but food outside the Market is likely to be very much dearer.
    Let us remember that, happily, the days of colonial cheap food are over. That source of cheap food was based on the exploitation of native peoples. We sent our industrial products to their countries and they sent us their "cheap" food. I put the word "cheap" in inverted commas because they sold their food to us at prices which meant sweated labour in the colonies from which they derived. I hope that that kind of cheap food policy has gone for ever.
    Mr. Leslie Spriggs: My hon. Friend has said that the day of cheap food has gone for ever. I hope that he will accept that most of his hon. Friends agree with him. I hope that he will remember that it was the exploitation of the Commonwealth countries and their cheap food which helped to destroy the Commonwealth as we knew it.
    Mr. Edelman: If my hon. Friend is talking about the colonies, I agree with him entirely. That leads me to a further point. Now that those countries have achieved their independence and become more sophisticated, and now that the patterns of world trade are changing, the food that is available from them is being directed into different markets. There is no going back on that. Therefore, it is hopeless to think that somehow we can reconstitute the omelette which was made from the shattered eggs of the Commonwealth as we knew it.
    I must add an addendum to that proposition. What use would it be to have relatively cheap food in a slump situation such as the 1930s when the unemployed could not afford to pay for it? That is why I say that the main economic purpose of the Community must be to create the kind of industrial prosperity for which Britain is eminently qualified.
    The decision to be taken by the electorate in the referendum will be conditioned by many factors. Many people will vote on impulse, prejudice, sentiment and xenophobia. Many considerations will apply other than purely rational considerations. There will be gut reactions and there will be the opportunity for

    1107
    demagogues to incite people to vote. There will be demagogues who will try to incite the people to vote in both directions. I am not claiming that the fault will be on only one side. It is up to us to give the country a lead in considering these matters objectively and clinically.
    Even those who are opposed to the Market must recognise the deadly upheaval that would take place if the treaties were denounced. I use the word "denounced" deliberately. There is no question of the Community breaking up because we decide that we do not want to be members. However, we would have to denounce the Treaty of Rome, to which we are signatories. In that event Britain's honour would be damaged. We would appear as treaty-breakers. Britain's credit would be damaged and confidence in Britain's stability would also be damaged. Then would come the grave day of reckoning.
    I do not believe for a moment that we could have any kind of industrial free trade area. I do not think that that would work because our former partners would not hear of it. Why should they allow us to have a policy which some of my hon. Friends and some Conservative Members claim would be based on a cheap food policy? Why should they allow us to undercut them in an industrial free trade market? The whole proposal is contradictory.
    There would come the day of reckoning. The Foreign Secretary and the Secretary of State for Trade would have to go hawking round the world capitals begging for somebody to take on Britain as a partner. I wonder how many doors would be slammed in their faces and how much British trade would be lost in such an event. I wonder how high the cost of food would be if Britain, lacking the bulk purchasing power of the USA or the Soviet Union, had to go out into the open market to buy food. We should have turned our faces on the broad vista of co-operation and would be faced with isolation in an overcrowded island, in circumstances which would spell only disadvantage to everybody in our nation.
    I hope that when these arguments are deployed in the referendum campaign the British people will learn the real truth about Europe. I also hope that the very
    1108
    word "Europe" will not be used as a bogy to stampede opinion. We have a choice before us. The choice lies between peace and unity in Europe and a return to the fragmentation of that continent which has resulted in so many tragic wars. Because of my belief that Britain's future must lie with Europe, I support my right hon. Friends in their presentation of the White Paper. I hope that presentation will have the overwhelming support of the whole House.
    8.2 p.m.
    Mrs. Winifred Ewing: I am happy to assure the hon. Member for Coventry, North-West (Mr. Edelman) that although Scotland has been in the "common market" with England for over 260 years, we have not been smothered— and I do not think that is likely to happen, whatever the outcome of the debate and whatever may be the decision of the people.
    If we stay in the Common Market after the referendum, my party will wish to emphasise the point that for Scotland there must be no taxation without representation. The Community comprises a body of institutions which reaches its view by compromise in a wheeling-dealing kind of situation. Some rights are sacrificed to others. If we are to be in the Common Market, the Scottish National Party demands for Scotland appropriate votes, seats and representation in every sector of the institutions directly for Scotland, on the basis that where there is wheeling and dealing we want to be in on the act. In other words, if the decision of the people is to stay in, that is the position of my party. We have made this point many times in exchanges during Question Time.
    Some hon. Members have made the point that the onus in this debate lies on those who wish to come out of the Common Market. I suggest that that is not the case. I believe that the onus is on those who wish to stay in. I make that point for two reasons. First, in the debates which led to Britain going into the Community many arguments were advanced which have now been proved to be false. No doubt the people who advanced those arguments held them sincerely, but since they have been disproved the onus in this debate should rest with those who want us to stay in.

    1109
    The second reason is that we were told before we went into the Common Market that entry would be made only with the full-hearted consent of the British people. In the election in 1970 the two major parties said that this was not to be an election issue, and there was a considerable desire to sweep the whole matter under the carpet. However, I have not forgotten all the speeches which were made in the House in the period from 1967 to 1970. The argument about growth rate does not look so attractive now that we have experienced a static growth rate. We were told that after we were in the Common Market we would reach a growth rate of 6 per cent. The argument about prices was also made to look attractive. But the price we paid for entry involved the introduction of VAT and decimalisation, and we all know how those items have contributed to price increases.
    We have only to contrast the situation with Norway and to compare its price increases with ours to see the pattern of events. The same is true of other European countries which are not within the Community. On the subject of jobs, we know that there is a 4· 6 per cent. unemployment rate in Scotland and an unemployment rate in the United Kingdom of 3·4 per cent. The situation in Europe reflects the fact that unemployment rose by 40 per cent. in the last period for which we have statistics.
    A recent parliamentary answer showed the effect on the investment situation. Again the existence of the Common Market goes against us, since in investment terms we put in more than we get out. I saw a letter written to my hon. Friend the Member for the Western Isles (Mr. Stewart) by the head of a motor vehicle organisation making the point that we needed to go into the Common Market because competition would be good for the motor car industry. One has only to realise what happened to the person who wrote that letter to judge the accuracy of that statement. The invesment situation is not good, and certainly the export situation is against us. Common Market countries are selling more to us than we sell to them.
    What has come out of this debate is the fact that many of the economic arguments have turned out to be misleading.
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    It may be that a certain honesty is creeping into the debate— namely, on the lines that what people are really interested in is the political motive. That factor is now coming into the open at last, and the economic arguments are admitted to be specious. I welcome that honesty. There has been a great deal of dishonesty on the subject of the EEC.
    Many pious hopes have been expressed about the White Paper as if those hopes were statements of fact. Those desires are ostrich-like because, for example, we have not yet achieved a common energy policy. Maybe a common policy will never happen, and, if it does happen, it will not attempt to control the rate of extraction of oil in the North Sea, or Scottish oil as I prefer to call it. The achievement of a common energy policy will not govern the price which we can charge or the markets to which we sell, and I believe that the hopes in that respect will be merely pious ones.
    Mr. Roper: The hon. Lady will understand that any future policy of the Community has to be agreed by all its members. Therefore, the Government are justified in saying that they will not permit a policy to be introduced which does not give us the power we require.
    Mrs. Ewing: We have had many statements to the effect that the consent of all members of the Community is required and that we need fear nothing. Despite that consent, however, terrible things have happened. We have had policies which do not suit us, such as the common agricultural policy. I regard that policy, along with the common energy policy, as a further example of pious hope.
    It is the habit of many pro-Marketeers to repeat statements time and again without giving explanations. We have often heard the statement that we must be in the Common Market because it consists of 250 million people, but we are never told that there is a much wider market outside— namely, the market of the whole world. Recent figures have been given to show that Scotland's exports are higher per head than those of any other country in Europe, except West Germany. There is great potential for the development of Scottish trade, which has increased more rapidly outside the EEC than within it.
    The second statement which is repeatedly made is that once we are in

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    the EEC we cannot get out—in other words, that there is something inherently dishonest in getting out of treaties. But nations have got out of many treaties in the past. There cannot be anything dishonest in such a course if we let the whole of the voters decide and if we follow their wishes. Indeed, there would be something dishonourable if we were not to follow the wishes of our people following their vote in the referendum. According to my understanding of the situation, we shall get out of the Common Market if the vote goes against our staying in.
    We are told that we must be part of a large unit, a great bloc, so that we can be as large an entity as Russia or America. But we are not told why we must be part of that large bloc. I am reminded of the United States lawyer who addressed the jury by saying, "These are the conclusions on which I base my facts." That, roughly speaking, is the kind of argument we have heard often in these debates.
    When the Leader of the Opposition was asked a specific question by the hon. Member for Renfrewshire, West (Mr. Buchan), the right hon. Lady answered by quoting the Prime Minister's White Paper. It is at least nice to see solidarity between the two Front Benches. It goes a little way to make up for the lack of agreement in one major party. I remember that in a previous Parliament the present Prime Minister sought to gag his back benchers by threatening to remove their "dog licences". In this debate it is the Front Benchers who are being gagged by not being allowed to voice their opinions. I am sorry that the Prime Minister is attempting to gag his own Ministers, because I am sure that many of them would have interesting things to tell us, especially the Secretary of State for Scotland.
    In dealing with the renegotiations, the Prime Minister said:
    "I told Parliament that the renegotiations, begun last April, had now gone as far as they could usefully go"— [Official Report, 18th March 1975; Vol. 888, c. 1456.]
    Why was fishing omitted? Why was fishing not even on the agenda? That is perhaps one of the reasons why there was a blockade in Scotland affecting every boat and crew. There was total solidarity among people who do not normally want to act in that way. A totally unified
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    industry was there for the first time because it did not want the EEC fisheries policy to come into force on 1st January 1984. There were other matters on the agenda concerning imports from Norway and the 40-ft. boat. I attended all the fishing meetings.
    We are not here to discuss the subject of the renegotiations. We are here to discuss the EEC and matters of principle. The renegotiations achieved almost nothing. The formalities of the EEC budget financing remain. There is no fundamental change in the CAP. The results of the renegotiations resemble the piece of paper which came back from Munich. They are not worth the paper on which they are written.
    Many speakers in this debate have dissected the renegotiations. There is no point in my rehearsing that matter. The omission of steel is a fundamental point. When the Prime Minister said happily that the renegotiations had gone as far as they could go, he missed out some important chunks— energy, steel and fishing.
    As regards the regional fund, there is a strange theory behind the CAP. I live in a country which is self-sufficient in most basic foods. We prefer fresh to frozen food. That is reasonable. We are accustomed to it. The common agricultural policy is designed to put vast quantities of food into cold storage. Some of the member countries do not have enough cold storage to operate this policy, even if they want to. The policy has not worked. If it was intended to prevent increases in prices, it has not achieved that aim. It has resulted in the shocking mountains of butter, beef and milk powder. I am told that there is now even a wine lake.
    The common agricultural policy is not fundamentally altered by the renegotiations. The policy is not suitable for Scotland, which could be a food exporting country. In any case, if we chose to subsidise consumers why should we subsidise Russian consumers? Why should we not subsidise poor people in Bangladesh and in other places who need the food? Why should we not subsidise our own distressed pensioners and housewives who, in view of the low wage rates prevailing in Scotland, cannot make ends meet? There have been other failures within the EEC both from our point of

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    view and from that of the other member States.
    I am not blind to the argument that it is wonderful that nations which were once at war are now sitting together in a Parliament. I was a child of the war, which affected my home very badly. I recognise that aspect of the EEC.
    Unfortunately there is a different motivation behind the EEC, much of which concerns the labelling of the Common Market as a rich man's club and as a friend of the large international companies. On the whole, the small business man in Scotland is not in favour of joining Europe, while the man from the big international company is in favour of doing so. That is a fairly significant observation.
    I remember my hon. Friend the Member for the Western Isles saying that a fair definition of the EEC was that it was the taking in of each other's washing machines. There is that aspect which cannot be hidden. There is a great deal of muddle attached to the EEC. For example, I received a letter today from the Secretary of State for Scotland concerning grants to fishing boats. I was told that if a fishing boat had been ordered an EEC grant could not he obtained. I did not believe that. When I visited Europe I had discussions on this matter. I found that that was not the case, and I have a letter confirming it. The EEC grant can be applied for any time before delivery of a boat. Meanwhile there are months of muddle while Ministers in the United Kingdom do net know the rules and regulations. Perhaps that is understandable since the regulations are so numerous.
    I asked the Secretary of State for Social Services for information about comparative family allowances in the member States. I was told that I could not be given that information as it was too complicated. I asked for information about the subsidies that were paid to the fishing industries of member States. I cannot be given that information. Neither can the fishing industry obtain such information, according to one official spokesman.
    There are alternatives to the EEC. I think that the prophecy of doom— that we must stay in the EEC— is one of the strange things about this debate. We
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    exported goods to the EEC countries before we entered the Common Market. Whatever tariff barriers existed then, we accepted them and beat them. Twentythree per cent. of Scotland's exports go to the EEC member States, excluding England. A far higher proportion of our exports goes elsewhere. The alternatives will be there. Denmark has indicated that she will leave the Common Market if we withdraw. Already the alternatives are beginning to form.
    Aspersions have been cast about the strange bedfellows among the pro- and anti-Common Market factions. One thing strikes me as strange. While fighting the last election, the Tory Central Office was keen on supplying people in my constituency with chits asking questions. We were asked the same questions throughout the campaign, which was boring. One question concerned the "Reds under the beds", mostly in the Clydeside area. That question was asked repeatedly. Some people fear that the Communists will take over Britain, although the Communists receive only a tiny fraction of the total vote. The Conservative Party is unified in wishing to remain within the EEC. I find it puzzling that it wishes to rush into this alliance if it is against Communism, since Italy is on the brink of Communism and a large Communist Party exists in France.
    I hope that the documents that are issued to the public will not contain pious hopes in the guise of facts. I hope that the truth about the economic failures of past years will be clearly explained. If that is not done, it will be a terrible reflection on this House.
    The right hon. Member for Bournemouth, West (Sir J. Eden) said that sovereignty was economic power. I do not accept that. The sovereignty we are talking about is the right to make decisions within a democratic system and to control the decision makers. We can easily envisage a State strong in economic power which does not have the type of sovereignty of which we are now thinking. The statement that there is something noble about economic power is not acceptable to my party. Having spent hundreds of years evolving a parliamentary system designed to give back benchers control over Front Benchers, it seems extraordinary that we are about to throw

    1115
    away the careful controls or the right of scrutiny which we have developed.
    Mr. Michael English: Does not the hon. Lady realise that that is perhaps why the two Front Benches want to throw the system away?
    Mrs. Ewing: I would not attribute such an evil motive to either Front Bench. They are, after all, both divided, not quite half and half.
    I believe that an independent Scotland would have very considerable alternatives. It would be self-sufficient in basic foods and in most fuels. It would be exporting some fuels. It has very sophisticated industries. It has a clever population. It has plenty of space. It has a geographically strategic position of the utmost importance which would make it able to bargain with any bloc or trading group. I believe, therefore, that if the EEC makes its institutions more democratic, as it must do— possibly it will take a rather long time, and maybe too long— it could be that an independent Scotland would keep its options open.
    As the EEC stands at present, it is not democratic enough for the Scottish National Party. The regional fund is just a token. The regional funds of the United Kingdom, of which my party makes many complaints, are much more likely to solve regional problems in the north of England, in Scotland and in Wales than is the EEC's fund. But, having said that, we are still critical, because we do not have enough democratic control in this House.
    There is a strong anti-Market feeling in Scotland, and we cannot accept a central count. That would be an attempt to hoodwink not just the people of Scotland but every single citizen who votes.
    8.22 p.m.
    Mr. John Roper: I hope later in my speech to take up some of the matters raised by the hon. Member for Moray and Nairn (Mrs. Ewing) about the need to achieve a more democratic Europe, but I want to begin by dealing with her remarks about the renegotiations because, unlike her, I believe that the renegotiations have been significant not only in what they have achieved but in what they have indicated to the Foreign Secretary, the Minister of Agriculture and the Prime Minister about
    1116
    what can be done within the Community. All of them have come back to this House to tell us how they have found the Community institutions far more flexible than they had imagined, far more open to change, and far more amenable to the suggestions which my right hon. Friends have made to them. Therefore, the renegotiations are as important for the way in which they have shown Ministers of this Government the value of the Community and the flexibility of the Community institutions as they are for the positive achievements on specific matters in the renegotiations outlined by the Prime Minister yesterday.
    As the hon. Member for Moray and Nairn said, one of the difficulties in this debate is that many of those who will vote in favour of continued British membership tomorrow will be voting for very different reasons. The same applies to those who will vote "No". People see the Community not as an end or objective in itself but as an instrument to achieve the very varied purposes for which they came into politics.
    I see the Community as an instrument to achieve the objectives for which I joined the Labour Party nearly 20 years ago. I see it as a means whereby we can secure in the long run an increase in people's living standards, although there is no doubt that in the short run the picture is bleak inside or outside the Community.
    What is even more important is the social control of industry. This is a matter which has been raised in this debate and elsewhere. In my view, we have a better chance of achieving the social control of industry within a European Community than we would have as one country on our own. I think of firms in my own constituency. They have. And have had for a long time, their international links. They have become transnational companies already, with the result that if pressures are put on them in one country to develop or not to develop, they can move to other countries. It is only as we develop transnational trade unionism and economic and political institutions for the Community that we shall be able to control and harness industry.
    Mr. Doug Hoyle: Can my hon. Friend say whether we are

    1117
    likely to develop these transnational trade unions, bearing in mind the divided trade unions that we have in Europe? Can he also tell the House of any action which has been taken against the multinational companies and how, for example, he would deal with the multinational car companies which are likely to move out of this country into Europe?
    Mr. Roper: I was about to come on to the matters raised by my hon. Friend. We have had an advantage in this country because in one sense our trade union movement is more united than those of other countries. We do not, for example, have the problems which have existed in France and Italy with trade unions divided on religious and political grounds. However, the German trade union movement is more united than our own, mainly because it was set up by representatives of the British trade union movement after the war and because it has learned from our mistakes what a trade union movement should be. However, the French and Italian trade union movements have come together remarkably in recent years. We have the important agreements whereby the former Catholic trade unions are admitted to the European Federation of Trade Unions and the Italian Communist trade union is associated with the federation. These developments suggest that the barriers about which we were concerned in the past are no longer as real as they may appear.
    As for the multinational companies, of course, one country by itself is very much restricted in what it can do with multinational companies. Already the regulations and controls on some forms of tax evasion are an instance of what the Community can do. But this is an area in which a Labour Government within the Community would want to work with the other Socialist governments towards further controls.
    I do not argue that the Community is perfect. I see within its framework a better chance of achieving objectives of that kind than is possible outside it. It is a balance of risks. We have to make a judgment. On balance, I think that we have a better chance in the Community than outside it.
    The third reason why I joined the Labour Party was to help to create a more
    1118
    peaceful and just world. I see the Community as a way of achieving that objective. For the reasons adduced by my hon. Friend the Member for Hornchurch (Mr. Williams) and others, I believe that we have a better chance of doing that within the Community than outside it.
    I want now to comment on the suggestion made by my hon. Friend the Member for Newham, South (Mr. Spearing) about the possibility, if we were to leave the Community, that we could retain the status quo and that there would be no question of tariff barriers being re-erected against us. My understanding of the GATT is that that would be illegal. It would be improper for us not to extend zero tariffs to everyone with whom we had most favoured nation treatment. Without a free trade agreement, we could not allow our tariffs with one country to be lower than those with other members of GATT. Therefore, it would be necessary to negotiate a Free Trade Agreement with the Community.
    It has been argued that the Community would want us because its members sell more to us than we sell to them. The balance of payments deficit of last year has been quoted, but these are aggregates on both sides. While they represent to us 35 per cent. of out export market, we represent to them only 8 per cent. of their export market. We are much less important to them than they are to us. Therefore, the assumption that a free trade agreement would be easily available is a rash one to make. Even if it were, we must remember the point made by my right hon. Friend the Prime Minister yesterday, repeated today by the Opposition, that a free trade agreement would involve us in many of the controls on our rights to introduce industrial and regional aids to industry about which people complain under the present regulations.
    Free trade agreements with former EFTA countries have written into them the same restrictions and clauses as appear in the Treaty of Rome. For example, the steel industry of Sweden has to follow price by price the steel industry agreements of the Community. Otherwise it will not be allowed to continue to have free trade access.
    We would have many matters which people consider to be disadvantages—for

    1119
    example, enforcing fair competition between countries which have free trade arrangements—without any right to have a Minister in Brussels to take part in the decision making regarding those controls and regulations. Indeed, the Foreign Secretary would not be able, as he was a month ago, to ensure that the regulations are sensible and are adjusted to the needs of this country. I suggest that we would have many of the disadvantages and few of the advantages which we have as a member of the Community.
    Other economic arguments have been raised in which hon. Members have quoted remarks made in 1970 and 1971. The economic situation has changed considerably from that time. It would be foolish to pretend otherwise. I have been looking at the White Paper issued by the Labour Government in February 1970 and its economic assessment. It is interesting that in paragraphs 68 to 70, when referring to the effects on the balance of trade with the Community, the Labour Government, when making their application, were aware that the impact of our membership would be unfavourable in that there would be an adverse effect on the balance of trade initially. Certainly nobody thought that it would be as disastrous as the £2.000 million recorded last year. But, as has been said, special factors affecting last year's balance of trade figure with the Community are unlikely to be repeated.
    Reference has been made to the fact that big business is interested in the success of the Community and our membership of it. The hon. Member for Moray and Nairn referred to that matter. That is an important point with which I have to some extent concerned myself. Therefore, two or three weeks before the Easter Recess I wrote to 100 firms in my constituency, both large anti small, asking for their views on our continued membership of the Community and, in particular, what they thought would be the effects on prosperity and employment in the area if we were to leave the Community.
    I have had replies from a representative sample—not from all of them. These replies are from some of the big firms as well as the small, and from some of the multinationals in both the public and private sectors, in the general engineering sector and that linked with the car
    1120
    industry and in the paper, textile, clothing and food industries. Although two or three of these firms which solely serve the home market say that leaving the Community will have little effect directly on their sales, the extraordinary thing is that the vast majority reply that they consider that leaving the Community would have a serious adverse effect upon their exports and upon employment in the constituency.
    As the textile industry has recently been debated in this House, I should like to quote from a letter which I received from a very small firm in my constituency, Messrs. John Faulkner Limited:
    "It is not easy to see far into the future, but the fairly obvious effect on this firm of leaving the Common Market now would quite clearly be disastrous within a relatively brief period.
    A substantial proportion of our products (synthetic fibre sewing threads) are exported either directly or indirectly to the EEC, and this would certainly be much reduced if we came out.
    But as you are no doubt aware, textiles generally suffer most from the massive flood of cheap imports either heavily subsidised, dumped, or produced in low-cost areas of Asia.
    In so far as the United Kingdom lost European markets for engineering products, if we left the EEC more effort presumably would be made to increase exports to Asia where they would either have to be given free as aid, subsidised with long cheap credits, or paid for by even more cheap textile imports.
    I can really see little hope of my company, even though it has been completely modernised with the very latest machinery, surviving for more than a year or two if we left the EEC."
    Mr. Ron Thomas: Will my hon. Friend advise us on what is meant by the first part of that letter—that the company would no longer be able to continue to export to the EEC? The point we were trying to make earlier was that the threat was that the EEC would construct tariffs against us, which would be quite contrary to the GATT, would it not?
    Mr. Roper: Thas was the point I had hoped to establish earlier. Under GATT if we left, the EEC would be obliged, and we would be obliged, to return our tariffs to the level of the common external tariff or our previous tariff—the most favoured nation tariff. It would be wrong for us to deal with countries with which we did not have either a free trade

    1121
    agreement or a customs union on a basis of tariffs which were below those which we offered to other most-favoured-nation countries. That is the regulation of the GATT. We would not be allowed to do it. Therefore, this particular firm, as others, assumed that there would be difficulties because the textile industry in the EEC would want to see tariffs imposed against us if we were not in the Community, as might the European chemical industry, or we might see pressures coming from the car industry in the Community. There would pressure within the Community for a re-erection of tariff barriers and, therefore, the barriers would have to go up, under the regulations of GATT, unless we negotiated a free trade agreement.
    Mr. Hoyle: Is it not a fact that we have an adverse trade balance on textiles with Europe that is getting wider each year? It has gone from about £4 million to £69 million. The flood of cheap imports has not been reduced because we are in the Common Market. Indeed, we have had to accept imports from the Mediterranean associates. The burden-sharing scheme will not help the textile industry until the 1980s, by which time there may not be a textile industry.
    Mr. Roper: I am grateful to may hon. Friend for that intervention. He will know that the British Textile Confederation, representing the textile interests, and the textile trade unions have come to the view that it would be in the interests of Britain if we remained within the Community. I am aware of the fact that we have not increased our exports as much as we would like, but every textile firm in my constituency that wrote to me said that it believed it was essential for its business that we remained within the Community. Therefore, I can only take the advice of the textile firms, and, indeed, accept a view not disputed by the many textile trade unionists either.
    I want to comment on another area, which was referred to by my right hon. Friend the Member for Jarrow (Mr. Fernyhough). That is the way in which the Community behaves towards the Third World. When we had these debates in 1971 one of the most serious challenges to the question of our mem
    1122
    bership was the suggestion that the Community was an inward-looking rich man's club and that it was not a body which would care for the poor countries of the Third World. I remember my right hon. Friend the Secretary of State for Education and Science saying how heavily this weighed with him then in opposing British membership. I believe that the most remarkable achievement of renegotiation by my right hon. Friend the Minister of Overseas Development in the past 12 months is the progress that has been made in transforming that image of the Community as an inward-looking organisation to a picture of an organisation which shows its concern and its care for the Third World.
    We have spoken already of the Lomé Agreement with 46 countries. It is worth remembering that provision is made in that Agreement for Angola, Mozambique, Namibia and Rhodesia all to be allowed to become members of that convention once they become independent, so it may well be, before long, 50 ACP countries. Indeed, although the agreement on that pattern of trade was restricted to countries which were of a certain kind, we have negotiated commercial agreements with India and Sri Lanka and are doing this with Bangladesh and Malaysia.
    What is more important is that my right hon. Friend has persuaded the Community to accept the principle of the globalisation of aid and to agree that the idea that aid should be restricted to those countries with which there have been traditional ties in Africa, the Caribbean and the Pacific should be extended, with a fund which would apply to other countries as well. That is a significant achievement. It has been agreed in principle though not yet worked out in detail. Nevertheless, that is important.
    There has also been a significant improvement for the non-ACP countries. Because of the demand of my right hon. Friend the Foreign Secretary in June last year, there have been considerable improvements in the Community's generalised scheme of preferences. Originally, there were 51 sensitive products listed in that scheme. There are now only 16. I must confess that certain pressures for further reductions in restrictions within the generalised scheme of preferences would cause considerable difficulties in areas such as my own, because—certainly

    1123
    with rising unemployment and the rising tide of low-cost products—any move to press the Community to abolish all restrictions on textiles, footwear and cutlery would find considerable resistance, not only in this country but in some other countries of the Community, too. We can say, therefore, that as far as trade and aid policies are concerned, the Community has made remarkable changes in the 12 months, and this has been an achievement of which—
    Mr. Spriggs: My hon. Friend has referred to the problem of low-priced products. I would like to know from him, if he can tell us, where these products are, because if they are being imported at low prices, those low prices are not being handed on to the consumer in this country. Can he tell us where they are?
    Mr. Roper: My hon. Friend is going some way from the subject of our continued membership of the Community. The Under-Secretary of State for Industry is investigating this matter and has promised to let my hon. Friends know the results of his investigations. But that is a subject far from that which we are discussing today.
    Finally, I turn to the question of sovereignty, because this is a point which has been and will be central to our debate. There have been references to two different forms of loss of sovereignty. There has been the loss of sovereignty, to some extent, by this House to the executive at the Council of Ministers which makes decisions, some of which, it is considered, are outside the control of this House. There is also the loss of sovereignty in general terms by the United Kingdom to the Community. Reflecting on a possible loss of sovereignty by this House to the executive in the last 12 months, I would say that the existence of the Scrutiny Committee and debates on the Floor of the House have opened up many of the activities of the Council of Ministers and the way in which the Community operates in a manner which was not thought feasible when we had our debates in 1971. We await with interest the report of the Select Committee on Procedure, which will suggest further ways in which we can improve our treatment of these matters.
    I believe that the loss of sovereignty by the United Kingdom to the Com
    1124
    munity was inevitable, as in any application to join a community. That is what a community is about. Certainly, if the decision in June is, as I hope, that we decide to stay in, we must work hard to build mechanisms for democratic control of the Community. That means, as my hon. Friend the Member for Coventry, North-West (Mr. Edelman) said, taking an active part in the European Parliament; giving more power to that Parliament and fulfilling the Anglo-Italian Declaration of 1970 by moving to direct elections to the European Parliament.
    I believe that if the referendum results in a decision in favour of our staying in the European Community, many of my hon. Friends who have opposed membership will be among the keenest to develop parliamentary institutions within the Community and to ensure that the democratic processes of this country are extended within the Community of Europe. I hope that that prediction, at least, will prove true.
    This is a critical debate. We have alternatives outside the Community, and it is foolish to say that it is a question between utter black and utter white. What we have to do, however, is to judge the alternatives and to weigh in the balance the advantages and disadvantages of staying in or of coming out. I have no doubt where the balance of advantage and disadvantage lies. I believe that this House will express that view overwhelmingly tomorrow night and that the British people will confirm that opinion in the referendum in June.
    Mr. Deputy Speaker (Sir Myer Galpern): The hon. Member said that this was a critical debate, and obviously many hon. Members wish to take part in it. The last three speakers took 21 minutes, 23 minutes and 24 minutes respectively. A greater consideration should have been shown for their colleagues who are anxious to take part in the debate. I hope that my comments will be noted by subsequent speakers.
    8.45 p.m.
    Mr. John Farr: I can assure you, Mr. Deputy Speaker, that I shall speak more briefly than did the last three hon. Members and he as concise and quick as possible. I will not therefore refer to the speech of the hon. Member for Farnworth (Mr. Roper) except to say that I did not agree with much of it.

    1125
    We have heard today from both sides of the House some particularly brilliant speeches, especially the first two, speeches which have been brilliant for their eloquence and content. However, perhaps the whole tenor of the debate is best summed up by the words of my right hon. Friend the Member for Knutsford (Mr. Davies) who said that the period during renegotiation and since the Treaty of Accession has been one of contemplation to enable the House and the country to decide whether what we did when we signed the Treaty of Accession was right and whether it is desired to reverse that process in the next few weeks. He deployed his arguments in his usual concise and knowledgable way.
    I want to deploy my arguments on precisely the same question—whether events have changed significantly in this country since the Treaty of Accession, what we can learn as a result of the subsequent two-year trend of events, and how we should vote on Wednesday night. Very little has been changed in the period of renegotiation. The Labour Party's manifesto with its seven objectives was, I believe, a manœuvre by the Prime Minister to unite, in the only way open to him, the seriously divided parliamentary Labour Party. Great play has been made throughout the country of the achievements of this Minister or that in securing radical alterations to the Treaty of Accession and other fundamental improvements. In fact, the changes are minute. There is nothing fundamental or radical about the seven objectives and the Prime Minister has no ground for boasting about having secured a major achievement. I can therefore conclude only that all the blarney and ballyhoo has been part of a delicate tight-rope act by the Prime Minister which was his only way of securing party unity over the next few difficult months.
    The seven objectives which the Prime Minister listed in the manifesto at the last election were dealt with in his statement to the House on 18th March. Each is set out with a comment after it by the Prime Minister explaining what the Government have achieved. The first objective—that major changes in the common agriculture policy should be made—has not been achieved. Minute changes have been
    1126
    secured, but there has been no major change. To give the Prime Minister due credit, he did not seek in his speech yesterday to indicate that a major change had been secured.
    However, as one who is interested in agriculture, I can say that the only effect of the renegotiation on many commodities is that there is less security and less guarantee at the end of the road for a farmer producing beef, for example, than there was before. The old deficiency payment has been swept away. The renegotiation has succeeded only in abolishing the intervention board and the intervention policy operated by the EEC, which has left many producers in this country in a difficult position. In many other respects the contribution made by renegotiation has been completely negligible, and the common agricultural policy as a whole, with many of its distasteful aspects, has been virtually unchanged.
    The second objective was
    "New and fairer methods of financing the Community budget."
    Apparently minor improvements have been made, related to the limiting of the size of our contribution, but, even so, those of us who objected to membership in the first place will still object to the possible hundreds of millions of pounds net contribution per annum which this country could pay to remain within the EEC.
    Thirdly, the manifesto said that the Labour Party
    "would reject any kind of international agreement … to accept increased unemployment."
    We reject that objective entirely, because it was never an understanding of any arrangement which my right hon. and learned Friend the Member for Hex-ham (Mr. Rippon) made, when he negotiated the terms for a Conservative Government, that membership would lead to any form of increased unemployment. Conservative Members, whether in favour of membership of the EEC or not, would not accept as a price for that membership a high or increasing level of unemployment.
    The fourth objective referred to,
    "The retention by Parliament of those powers over the British economy needed to pursue effective regional, industrial and fiscal policies."

    1127
    I do not regard those powers as having been retained. My hon. Friend the Member for Banbury (Mr. Marten), in an excellent speech, referred to documents on various industrial matters which we receive every week in the House. Three or four weeks ago I had one the size of a telephone book, which I had to consider with some of my colleagues in an hour and a half. I did not have a chance to read it. In any event, it seemed to me and to many other hon. Members on both sides to be a wasted exercise, when we knew that we did not have the power to amend one line or word in that vast document, and that much of its content was produced, formulated and finalised before we even joined the Market. I do not regard our sovereignty and parliamentary control as having been maintained in a right and proper manner.
    I have dealt with the fourth objective. The fifth objective concerned the relevant articles of the Treaty of Rome relating to exchange control. The Government conclude that they have used the existing articles to secure their purposes. Therefore, there has been no great achievement there.
    I come to the sixth objective, concerning the Commonwealth and developing countries. I do not regard what the Government have achieved for countries such as New Zealand and Australia as being of particular note. Despite the achievements that the Government claim, New Zealand cheese imports will still virtually stop in 1978. The future of New Zealand butter imports is uncertain, and, despite renegotiation we still pay a 20 per cent. import duty on New Zealand lamb and mutton.
    The Labour Party manifesto's seventh objective was:
    "No harmonisation of Value Added Tax which would require us to tax necessities."
    I shall arrive here early on Tuesday to hear what the Chancellor says about that. I and a number of my hon. Friends have written to him in recent weeks on the subject and have received no satisfactory assurance. We can only come to the conclusion that there may be something unpleasant in store.
    In the past two years there has been a disastrous decline in our non-oil trade balance with the EEC. We had a credit balance of £132 million in 1970, but in 1974 we had a non-oil deficit of £1,600
    1128
    million. Food prices have soared in Britain. Between 1972 and 1974 they went far higher than in countries such as Sweden and Norway, which have remained outside the EEC. The food price situation in this country is clouded because of two very bad world harvests in the past two years, which have put up the price of many products. But world prices are starting to decline. We can now buy our wheat and beef more cheaply outside the EEC than within it. I believe that in a year or two's time we could have cheap food, if we were in a position to avail ourselves of the opportunity to import it.
    We have quite a number of multi national companies in Britain. One hon. Member mentioned Vauxhall. There is an inevitable conclusion concerning the subsidiaries in Britain of companies such as General Motors, Ford and Litton Industries. Once we are firmly within the EEC, as part of the Nine and with the same economic structure, they will, being international companies of great efficiency and repute, concentrate their production in one or two plants in the geographical centre of the EEC, which is not in Britain but is south of Paris. They will close down their factories in countries which are on the periphery, such as England and possibly Italy.
    I am not putting that forward as an idea to frighten people in any respect. I can only say that that is what Litton Industries have already done so far as their typewriter output is concerned. They took over Imperial Typewriters five or six years ago and they had two producing plants in Leicester and Hull, which they have closed in the last few months. They have transferred all their production rights, patent rights, jigs and tools for Imperial Typewriters to a new modern plant they have in West Germany, and that West German plant will be the sole producer of Litton Industries' typewriters within the EEC. However, they have kept another manufacturing outlet in Europe, and that is in Sweden. It is a relatively small plant which will cater for the EFTA group of nations and provide them with a typewriter manufacturing capacity. I believe that if we had remained with EFTA without the EEC, the EFTA typewriter manufacturing capacity of Litton would have been preserved in Leicester and Hull and would not have

    1129
    gone to West Germany, as is now the case.
    The example I gave of Vauxhall, Ford and Litton Industries is not very fanciful. It is, for instance, what Whitbread have done. In the past 10 or 15 years they have bought up quite a number of breweries in East Anglia and other parts of the country. They have closed them down within a decent interval of time and built a whopping great new brewery about 60 miles north of London on the Ml, and all the Whitbread production is in the geographical centre of their outlets about 60 miles north of London.
    The same thing will make common sense, I fear, to such companies as General Motors, which are in financial difficulties with Vauxhall, and to Ford, just as it has to Litton Industries, and one of the reasons for which Britain should withdraw from the EEC is that we run the risk of losing a good deal of our own industrial manufacturing capacity when the multinational giants choose to move it to the geographical centre of their fields of operation.
    I conclude by saying that I do not think that Britain's future lies within the EEC—an EEC apparently heading for a European federal state by the 1980s. Instead. I believe in joining once again our friends in EFTA outside the EEC to trade in peace and harmony with those within the Community, and bound to them of course by the firm links with the North Atlantic Treaty Organisation for defence purposes. I believe, too, that, while outside the EEC, we can continue to strengthen the principles and purposes which hold our Commonwealth together, and that as the centre of that Commonwealth we stand to have a better future than as some peripheral State in a federated States of Europe.
    Mr. Deputy Speaker: The hon. Member for Harborough assured the Chair that he was going to help us. I think he ought to know that his speech lasted 20 minutes.
    9.4 p.m.
    Mr. Ron Thomas: I agree with a good deal of what the hon. Member for Harborough (Mr. Farr) has said, but I wish to concentrate on other aspects of the White Paper on the renegotiation because that is what I
    1130
    understand we are discussing. I agree with my hon. Friend the Member for Gravesend (Mr. Ovenden) that it is not long since the party of which I am a member was completely opposed to the terms which had been negotiated. However, in the short time since then, we have been told not only that the terms are acceptable but that the White Paper could well have been written by the least objective of the pro-Market groups.
    The White Paper concerns me because it might well be a "Comic Cuts" version of it which is distributed to every home in Britain. I wish to refer to certain aspects of it because its phraseology and the way in which the words have been shifted about have created a totally different impression from what is the case.
    As the Ministers responsible for industry and employment have been gagged and will be unable to speak in this debate, I wish first to consider the question of regional investment. Document R/650/65 deals with the latest Commission recommendations on regional policy. On page 2 it is stated that
    "the Commission, in exercising its powers under Article 92 of the EEC Treaty, takes account of the fact that the Member States have the best knowledge at the national level …"
    It is put differently in the White Paper, which states:
    "The Commission acknowledges that national governments are the best judges"
    of what is required. That is different from "takes account". The Community document goes on to say:
    "The Commission is always prepared, taking account of the general interest, to consider compatible with the Common Market changes to aid systems,"
    and so on. The White Paper states that changes in national aid systems will not be regarded as incompatible. That is not what the Community document says.
    On the question of capital movements, the White Paper states that action to control capital movements in order to protect the balance of payments can be taken when necessary and that the renegotiation objective can be secured under the existing terms of the European Economic Community. It goes on to say in paragraph 100:
    "The removal of barriers to trade relates not only to tariffs but also to … the free movement of firms and of industrial investment".

    1131
    Few would deny that the free movement of capital is a principle enshrined in Article 67 of the Treaty of Rome, in the philosophy of the treaty and in the Common Market regulations.
    Paragraph 70 of the White Paper indicates that
    "in practice the Government can act to control capital movements when necessary".
    If that is so, are the Government satisfied with a situation in which in 1970 direct capital investment by the United Kingdom in the original Six was almost in balance with EEC investment in the United Kingdom, whereas three years later the latest statistics indicate that United Kingdom direct capital investment in the Six was over £450 million as against £97 million by the EEC in Britain?
    We have been told by the pro-Marketeers about the great challenge and opportunity presented by the Common Market. My hon. Friend the Member for Farnworth (Mr. Roper) said that he had received letters stating that if we withdrew from the EEC there would be depression in British industry and no one would invest in it. A couple of years ago the same firms were saying that if we joined the EEC they would be falling over themselves like 19th century innovating entrepreneurs to invest in British industry. The reverse has happened. There has been a slump in capital investment at home while overseas investment totalled £1,600 million in 1973 and the provisional figure for 1974 is £1,453 million.
    The free movement of capital is a prerequisite for a capitalist market mechanism economy, and that is what is enshrined in the Treaty of Rome and the Common Market regulations. At the same time control of overseas capital investment is essential for a Government which is trying to build a Socialist, or even a socially just, society.
    I refer my hon. and right hon. Friends to what was stated in Labour's "Programme for Britain 1973". It said:
    "The idea that free international movements of capital are essential to a liberal world trading system is a discredited notion of the past, which Labour has never accepted, and which few but the most blinkered can believe in today."
    That is not mentioned in the White Paper. This continual reference to the need to preserve a kind of Ricardian
    1132
    laissez faire system is indicative of the acceptance that the market mechanism must take precedence over regional policy, economic planning, transport and energy policies.
    Much has been said about publicly-owned industries. We have been told that there is nothing in the Treaty of Rome to prevent public ownership and extension. I suggest that my right hon. Friends should read Article 90 of the Treaty of Rome which states how those publicly-owned industries should behave. Nothing in that treaty says that we cannot nationalise more industries. As Socialists we are just as much, if not more, concerned with how publicly-owned industries will operate and be determined as we are with the extension of public ownership.
    The White Paper insists that the Government are satisfied that membership of the Community in no way impairs the retention by Parliament of the powers needed to pursue effective fiscal policies. Once again I remind my right hon. Friends on the Front Bench of what was said in Labour's "Programme for Britain 1973" about value added tax. It said:
    "In the field of indirect taxation, the Tories have this year introduced a system of Value Added Tax. We have strongly opposed the switch to VAT, which involved a major regressive shift in the tax system… If Britain is to remain in the Common Market, we shall be compelled to operate a VAT of some sort."
    I have not read the whole paragraph, but Ministers no doubt know it. That is a clear statement by the Labour Party that value added tax as a system of taxation is regressive. Suppose the Government decided to get rid of value added tax. Should we be allowed to do so as members of the Common Market? Value added tax is still a regressive tax. Can we, as members, ever scrap it?
    A good deal has been said about the dire consequences of withdrawing from the EEC. It is rather strange that, faced with the calamitous figures of our trade deficit with the EEC, the pro-Marketeers fall back on arguments about the increased deficit with the Commonwealth and the rest of the world. They are conveniently ignoring the 20 per cent. devaluation by the Heath Government which was part of the price of Common Market entry. They are also conveniently ignoring an insistence in many documents that

    1133
    there would be a trade diversion effect which would be detrimental to our balance of trade. We were told that that detrimental effect would be more than offset by an increasing trade surplus with the Common Market countries. The reverse has been the case.
    We are now told that the massive deficit is a reason for staying in the EEC and that it puts us in a weak position. I find that kind of recondite and economic reasoning something which I cannot follow.
    Would the other Common Market countries cut themselves off from this favourable and profitable balance from the United Kingdom? It is estimated that in 1974 Germany's favourable trade balance with us was £800 million to £900 million, that the Netherlands' favourable trade balance with us was £600 million and that the figure for France was £400 million. Are we suggesting that those countries would cut themselves off from this, that they would break the rules of the GATT and introduce great tariff barriers against us?
    Even under the rules of the GATT the marginal increases in tariffs would have little impact on the trade between us and the Common Market countries. I say to my Socialist comrades in my party that I do not believe that it is difficult to go through our manifesto and list this part of it or that which we would be unable to implement if we remained in the Common Market. That manifesto is only the beginning. It is only a pale shadow of the kind of measures we would like to take to build a Socialist society.—[Laughter.] Conservative Members may laugh but it is only the beginning. In my judgment we shall be unable to pursue the kind of policies necessary to build a Socialist Britain if we stay in the Common Market.
    Several Hon. Members rose—
    Mr. Deputy Speaker (Sir Myer Galpern): Order. Before calling on the right hon. and learned Member for Surrey, East (Sir G. Howe) I would remind the House that if the ten o'clock motion is carried, the debate continues after the Front Bench speeches until midnight.
    9.17 p.m.
    Sir Geoffrey Howe: I shall try to advance the debate by distilling some of the arguments that have been used so far, whether meritorious or otherwise.
    One point which has been clearly established is that the question now is not whether we join the Community but whether we come out. As the hon. Member, for Birmingham, Ladywood (Mr. Walden) made clear in his characteristically brilliant and courageous speech, that is a different question. Moreover, that question has to be looked at today in the context of a different world from that in which we were considering the question of accession two or three years ago. It is a world in which the threats to democracy from isolationism abroad and from revolutionaries at home are far more serious than they were two or three years ago. This was the point made by the hon. Member for Ashfield (Mr. Marquand) and by his hon. Friend the Member for Ladywood. It was also made with great insight, courage and candour by my right hon. Friend the Member for Stafford and Stone (Mr. Fraser).
    I share the anxiety of my right hon. Friend and his regrets about the missed opportunities on the part of those who have governed this country over the past 10, 15 or 20 years. However, I do it from a different standpoint. I would have preferred to see Britain as a founder member of the Community rather than remaining apart from it for so long. Now the position is clear. Unless we decide soon on our future course of action and our future relations with the Community, we shall hardly be in a position to say or do anything effective about our future. Some people will be advising us that the only thing to do is "For God's sake say something, even if it's only 'goodbye'."
    The third central argument that emerged from the earlier part of the debate is that it is now plain that the burden of proving their case rests at this point upon those who wish us to leave the Community. My hon. Friend the Member for Banbury (Mr. Marten) says that we can do so, and I agree that as a matter of national law we can pass the legislation to bring that about. Even so, it would be a breach of an international obligation. It would involve discarding,

    1135
    within a short space of time after making it, a treaty solemnly entered into by this country. That is not something we ought lightly to undertake. It would be bound to do great damage to our reputation and practical interests.
    The burden must be on those who now wish us to leave the Community. Why do they wish us to do so, and, more important, what alternatives do they propose for us in the years ahead? My hon. Friend the Member for Harborough (Mr. Farr) made a passing reference to the Commonwealth at the conclusion of his speech but no one has seriously argued the case, least of all of the Commonwealth, that there is now a different future for us there. The Atlantic Free Trade Area has passed away, to the regret of my right hon. Friend the Member for Stafford and Stone, and the European Free Trade Association is no longer there in the sense that it could offer us an alternative place.
    What we are left with is a weak presentation of some new free trade area relationship. I see very little, if any advantage in that as an alternative. It leaves us with no significant power to influence the economic, let alone the political policies of the European Community. That is the kind of influence for which the hon. Members for Ash-field, Aberdeenshire, West (Mr. Fair-grieve) and Farnworth (Mr. Roper) argue.
    It is for the sake of guarding the jobs and employment opportunities of our constituents that we are most concerned to remain members of the Community. I cannot accept the parallel put forward by the right hon. Member for Jarrow (Mr. Fernyhough) when he said that we should surely prefer the poverty of living apart from our parents and in-laws, in splendid isolation. That seems to be a post-colonial parallel with little relevance to our situation. I would far rather see us in the Community exerting influence, as it were, as a member of the cabinet, because all the experience to which the right hon. Gentleman referred suggests that people who resign from cabinets or strike out on their own, as did the Members who once represented the constituencies of Lincoln and Woolwich, East, tend to lose their influence, and our position inside the Community would surely follow that course.
    1136
    If we consider our position in a new free trade area agreement, if we could get it, it is plain from what my right hon. Friend the Member for Finchley (Mrs. Thatcher) and the hon. Member for Farnworth said that we should be there on wholly disadvantageous terms. We should be faced with all the constraints of commercial and industrial policies and none of the advantages. I fail to see how the representatives of the two nationalist parties who have spoken—the hon. Members for Merioneth (Mr. Thomas) and Moray and Nairn (Mrs. Ewing)—can prefer to place us in that situation, which could not benefit the constituents and countries they claim to represent.
    If we were to be in a free trade area we should be not on the periphery of Europe but on the periphery of a satellite that was receding from the places where power is exercised. We should still be subject to the gravitational pull of the Community and subject to the rules of the Community but increasingly unable to determine the nature of those rules. I ask the hon. Member for Moray and Nairn how that conclusion would establish what both she and I want to achieve—that we should be able to exercise the right to control the decision makers by democratic processes. We should have cast away that opportunity. We should be not merely taking a leap in the dark but deliberately deciding to set off in orbit in outer space, increasingly remote from where we should be taking decisions.
    Why should we wish to reverse the decision which was taken by the House less than three years ago? Why should we wish to come out? It is suggested that we should do that because the Community has not served as a miracle cure for all our difficulties. I agree. Of course it has not. But our troubles, as many hon. Members emphasised, have not been due to our membership of the Community. My hon. Friend the Member for Harborough mentioned the decision of Litton Industries, but it may be that Litton Industries, facing the present economic realities of our country, would have decided to move anyway. That is the reality with which we have to cope.
    Least of all can it be argued that the substance of our trade deficit with the Community is due to our accession to it. Several hon. Members made that point

    1137
    clearly, including the hon. Member for Ladywood. Some advocates of the Community may have suggested during the years of our approach to it—and God knows they were long enough—that it could be regarded as a Deus ex machina to liberate us from all our difficulties. It is my belief and that of many people in the country, including politicians, that the expectation of some magic cure and painless treatment for our difficulties is close to the heart of our persistent problems since the end of the war.
    As my hon. Friend the Member for Dorking (Sir G. Sinclair) said, Europe is not, and cannot be presented as, a solution to our own national problems. Let us not therefore present our continued membership of the Community in that light. Let us hearken to the advice of my right hon. Friend the Member for Stafford and Stone and avoid presenting it as an escapist solution if we decide to leave the Community. That would be the worst miracle cure of all to take, without a clear idea where we are going and leaving behind the efforts we have put into securing membership.
    It has been suggested that we should leave the Community because it is an inward-looking and selfish device that works to the disadvantage of the British people and the rest of the world. Plainly the balance of the argument that has been advanced in this debate has established that that is not so. If we look yet again at the question of food prices, I cannot share the view of my hon. Friend the Member for Harborough that accession to the Community will turn out to have worked to our disadvantage. As my right hon. Friend the Member for Finchley has said, it is important, and will become increasingly important in future, for us to have access to secure sources of food supplies for the British people.
    At this stage our food supplies are coming to us from within the Community at no higher price than they would be from outside. That is the important point that was made by my right hon. Friend the Member for Knutsford (Mr. Davies). We are secure within the Community. It is a sensible objective of our national policy to achieve a firm and prosperous future for our farming community. My right hon. Friend was right to make the point
    1138
    that was made in obviously different circumstances by President Pompidou—namely, that a healthy society depends for its political and social stability, apart from anything else, upon the presence of a strong agriculture industry. That is something that the Community will help us to achieve.
    Other hon. Members have suggested that the Community is working to the disadvantage of the developing nations. The hon. Member for Sheffield, Heeley (Mr. Hooley) advanced that argument at greater length than anyone else. I must say that I find it difficult to follow one part of his argument. He claimed to be an internationalist yet he asserted that our primary objective should be freedom to scour the world for cheap food in every quarter in which we can find it. That did not seem to be the approach of an internationalist. In fact, we can now see the advantages of the arrangements that have been made within the Community for the developing countries.
    I can well remember, when I was speaking from the Dispatch Box as the Minister responsible for trade, that I was pressed on many occasions by hon. Members on both sides about what we would achieve by way of negotiations for the developing countries. The present Government have continued the work that we set in train. The Lomé Convention is a substantial achievement for the 22 Commonwealth countries that are now benefiting from it. Would those 22 countries have been able to get those benefits if we had quit the Community? The answer is "No".
    The mandate adopted by the Community for its approach to the multilateral trade negotiations is, I believe, a great deal more liberal as a result of our membership of the Community than it would otherwise have been. It includes a commitment to work towards the liberalisation of trade in agricultural products. The Community's generalised preference scheme has already been producing advantages for Commonwealth citizens in Hong Kong and India. It is a great deal more liberal than it would have been had we not been a member of the Community. It is the framework within which advantages will be produced for Bangladesh, Sri Lanka and Pakistan.

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    What purpose would there be in leaving the Community and abandoning our Commonwealth colleagues, leaving them with no one to press their case within the Community?
    Mr. Hooley: I did not say that we should scour the world for the cheapest possible food. I said that the prototype of the kind of agreement that I want was the Commonwealth Sugar Agreement. That agreement gave a fair return to the producers and a guaranteed market as well as reasonable prices for the consumers. I said specificaly that I wanted to see world commodity arrangements along those lines.
    Sir G. Howe: Precisely. If that is the hon. Gentleman's objective, that is the kind of objective that will be best achieved by the kind of agreement about which we are now talking. However, that kind of argument sits uneasily alongside complaints about high food prices. If we set out to get fair prices and long-term contracts, we must come to realise that it is not possible to have it both ways.
    The final argument advanced is that continued membership of the Community will do irreversible and unjustifiable damage to the sovereignty of this country. On the contrary, I believe that continued membership will act to the benefit of true sovereignty, sovereignty of the kind for which we have striven as elected representatives—namely, our power to influence our own destiny and our power, as elected representatives, to act on behalf of the people. That is what I mean by sovereignty. I believe that that will be enhanced rather than diminished by continued membership of the Community.
    One had to consider the implications of sovereignty when the time came for us to join the Community. That was a question which I had to consider perhaps more closely than did many Members of this House. I remember the moment in April 1971 when a devoted member of the Law Officers' Department brought into my room a formidable pile of papers. When I asked him what it comprised, he said that it was the most important instruction which I was likely to have to consider in my lifetime. Over many months—in consultation with my right hon. and learned Friend the Member for Epsom and Ewell (Sir P. Rawlinson), my right hon. and learned Friend the Member
    1140
    for Edinburgh, Pentlands (Mr. Norman Wylie) and the Solicitor-General for Scotland—I had to contemplate and consider what was involved for our constitution in acceding to the Treaty of Rome.
    In that time I read the speeches made by the right hon. Member for Down, South (Mr. Powell) set out in his book, and I also read many of the arguments on both sides of the question. I do not challenge the proposition of my right hon. Friend the Member for Stafford and Stone that this was a question of great and fundamental importance, because it certainly was and it effected important changes in our constitutional position. But they were the same essential changes as they had been ever since the Treaty of Rome was signed in 1957. They were the same essential conditions as existed at the time when my hon. Friend the Member for Banbury and the right hon. Member for Down, South voted in support of Mr. Harold Macmillan's application to join in 1961. They were made after full consideration of the matter in the best interests of the British people. They represent, as experience has shown, a means of enlarging our power to improve the prospects of our own people.
    Some Members will remember the ferocity with which the Prime Minister denounced the way in which, in the event, we gave legislative effect to our accession to those treaties. He referred more than once to the way in which we had enacted the Code Napoleon for the benefit of the people of this country. I pointed out on one occasion that the only Bonaparte on that stage was the Prime Minister himself. Although on that night he opposed the Second Reading, I pointed out that his position then was "Not tonight, Josephine". I forecast that the time would come when he, like the rest of us, would assent to the European Communities Act. I am happy to think that that prophecy is now near to fulfilment. Since the White Paper recommends no change in the legislation, we may now say to Josephine "Tomorrow night is the night. Harold Bonaparte is back", even if more than a little battle-scarred at the end of two years.
    As I explained more than once to the Prime Minister by reference to paragraph 22 of the White Paper prepared by the previous Labour Government, we were

    1141
    carrying out the constitutional steps that were necessary to secure our accession to the Community. That is why I am glad to see that the Prime Minister appears now not to question our provisions, since the paragraph which I quoted is reproduced verbatim in extenso in paragraph 134 of his present White Paper, Cmnd. 6003.
    One other point of greater substance has been firmly established by the passage of time, and I am glad of it. The validity of the Luxembourg Agreement of 28th January 1966 related to the way in which the Community takes decisions. The Prime Minister in those days—and I dare say my hon. Friend the Member for Banbury—would never accept my assurances about the validity and effectiveness of that agreement, so much so that I almost began to wonder whether they were right. However, I am delighted to see that in paragraph 124 of the White Paper the Government set out the view that the practice of the Community is to act only by agreement in relation to important matters—as we had always argued and as was made clear in the communiqué of the Paris summit in December.
    These important realities continue to escape some people, such as the right hon. Member for Battersea, North (Mr. Jay), and others who continue to take a legalistic view of the institutions which the right hon. Gentleman still sees as tyrannical. However, by taking that view they are ignoring the practical realities of the way in which the European constitution works from day to day. It is a form of blindness difficult to understand in a citizen of our country when, as was pointed out by the hon. Member for Ladywood, our constitution and our very existence, above that of any other country, depends above all on the conventions of our constitution and not on the small print or, indeed, on any print at all. That is the most important lesson of the last year. It is a pity that it had to be learned at the expense of a prolonged process of renegotiation. That is the way in which the Community works practically and acceptably.
    What about the future? The hon. Member for Bristol, North-West (Mr. Thomas) was apprehensive about the threat to growing investment in this coun-
    1142
    try which comes from the possibility—it is no more than a possibility—of the commitment to free capital movement within the Community. A far greater threat to investment in this country comes not from capital movements within the Community but from the continuous freedom of movement on the part of the hon. Gentleman's Bristol colleague, the Secretary of State for Industry. It would do a great deal of good if he could take a more sensible view.
    My hon. Friend the Member for Banbury was apprehensive in a different way about the prospect of progress towards economic and monetary union and a directly-elected Parliament. My hon. Friend the Member for Harborough was apprehensive about the impact of our continuing membership of the Community on value added tax. It is made plain in the White Paper that there is no obligation upon us to harmonise the pattern of VAT in the United Kingdom in a way which Parliament regards as unwelcome. There are other good reasons for being apprehensive about the intentions of the present Government in relation to VAT. I fear that they may use our sovereignty to introduce multi-rate VAT, to the great confusion of our hard-pressed traders. However, that fear springs from the continued sovereignty of this House and not from that of the Community.
    We must face the realities of the prospect of economic and monetary union and the possibility of progress towards a directly-elected Parliament. For reasons which are set out in the White Paper, there will be no progress towards either of those objectives unless and until Ministers answerable to the House are able to carry them through in this Parliament. That is plainly the fabric and the pattern of the treaties, especially in relation to the change in the situation of the European Assembly. That body requires, before it can come into effect by way of direct elections, a recommendation from the Assembly, a unanimous decision of the Council of Ministers and the implementation of the decision by each member State in accordance with its own constitutional procedures. In other words, as set out in the White Paper, parliamentary approval is required. My hon. Friends will have the opportunity to argue against it. However, I do not foresee the likelihood of rapid progress in that direction, since that will

    1143
    not be possible without the assent of Parliament. That is the reality.
    Let us lift our eyes to the road ahead. Let us cease repeating the arguments of yesteryear, fighting the battles of the last Parliament and continuing the delay in taking effective decisions on the part of our people. Let us set about restoring the confidence of our people by reaffirming our determination to conduct our future as committed members of the European Community.
    9.38 p.m.
    The Paymaster-General (Mr. Edmund Dell): During the 1950s I saw the creation of the new European spirit. I wanted this country to be part of it. I think that we should have been far better placed today had we been part of it from the beginning. But we were not part of it. It has been repeatedly said in this debate—and by no one more brilliantly than my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden)—that the important fact is that we are now in the Community. The only question is whether we should stay in it or whether there is any alternative to staying within the Community.
    I am bound to speak primarily about the economic and financial aspects of this situation. Within that context, two main alternatives are offered to our membership of the European Community. The first alternative offered by some hon. Members is a Britain highly protected from international competition, and behind the barriers of which Britain can rebuild her strength. I believe that if we decided to leave the Community, that would be the most likely alternative for this country to adopt—not the open seas but the closed door, a Britain isolated and cocooned.
    Whatever the attractions of such a policy—and it is undoubtedly true that some of the strongest economies in the world at the moment were built up behind such protective barriers—recent experience, and none more than the attempt of this country in 1964 to impose an import surcharge and to maintain it for a long period, shows how difficult, if not impossible, it is in current circumstances to maintain such policies long enough for them to have a beneficial effect, even on the most optimistic interpretation of the consequences of such policies.
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    I come to what is offered on both sides of the House as the second main alternative to the European Economic Community, which is an industrial free trade area—with the old EFTA, with the EEC or with both; in other words, in some way to negotiate, as an alternative, a European free trade area.
    This proposal is interesting because it bears on the question whether membership of a larger and more rapidly growing market is beneficial economically to this country. Evidently those who believe that the alternative to membership of the EEC is membership of some kind of free trade area also believe that to be a member of a larger market, and especially a faster growing market, than our own, would be economically beneficial to the country.
    I believe that they are right, though of course I do not expect—certainly not as a result of our entry into the EEC—that such beneficial effects will accrue rapidly. I think that criticisms based on the fact that in the past two and a half years, with the exceptional economic situation of those two and a half years, our economic performance has not been transformed are badly founded. There are great advantages in a larger market. One can expect a steadier level of demand than we have ever achieved since the war. It provides stimulation to the export sector, which is the most efficient and fastest growing sector of our manufacturing economy. The influence of a larger market is even greater if, as in this case, that larger market is more rapidly growing than our own. Also there is likely to be increased specialisation, standardisation and longer production runs as a result of membership of such a market.
    That appears to be, so far, common ground with those who believe that we should find some sort of larger market of which to be a member, whether it is the EEC or a free trade area. If one believes that such a market would be beneficial to the United Kingdom, it seems exceedingly reckless to leave the EEC when there is no evidence that we could establish a free trade area with the EEC or even with EFTA. The fact that other countries smaller than our own have done so is no evidence that we could do so. That would be my advice to those right hon and hon. Members who think that this proposition is open

    1145
    to us as easily as they suggest. Here I agree with my hon. Friend the Member for Ashfield (Mr. Marquand). I believe that the experience of our European partners, facing the fact that they have agreed to this renegotiation, would make such negotiations exceedingly difficult if we should leave.
    My right hon. Friend the Member for Battersea, North (Mr. Jay) believes that we should stand where we are, that it would be up to us simply to decide whether or not we put up tariffs, and that we could in that way create the free trade area which he wants. I must tell my right hon. Friend that I think that my hon. Friend the Member for Farnworth (Mr. Roper) is right. We are now down to 40 per cent. of the existing tariffs. Under our GATT obligations we are allowed to discriminate in this way in favour of other European member countries only because we are on the way to a customs union. If we left the Community, we would have either to negotiate a free trade area—I am casting some doubt on the ease of that negotiation—or to restore tariffs to their original level.
    Why should the European countries give us the advantages of free trade? The ordinary common customs tariffs on industrial goods may add an average of 7½ per cent. But in areas particularly important to us, the tariffs are much higher than the average—for example, chemicals up to 18 per cent., commercial vehicles 22 per cent., and so on with a whole series of items of major interest to this country's manufacturing industry. Therefore why should they give us this advantage to our industrial exports?
    Mr. Jay: I agree that from a legalistic point of view it would be necessary to obtain, as has often been done, a waiver from the GATT while a proper legal form was secured for this arrangement. But from an economic point of view, why should the EEC countries wish to restore tariffs when clearly it is very much in their interests to maintain the present position?
    Mr. Dell: Unfortunately, it is not clear that in those circumstances it would be in their interests to do so in areas where this country's industrial economy is particularly competitive. I shall explain
    1146
    why later, because I must make other references to the arguments advanced by my right hon. Friend.
    What would be the advantages of an industrial free trade area, on the supposition that we could achieve it, compared with our present membership of the European Community? The first, which has been particularly advocated in the debate, is the availability of cheap food. The Government have stated their assessment of food prices in this country following membership compared with what they would have been had we not been a member of the Community. The calculations stand and take account of recent falls in the prices of certain foodstuffs.
    However, let me for a moment accept that everything proposed by a number of hon. Members about the availability of cheap food were true. I agree entirely with the point made by my hon. Friend the Member for Coventry, North-West (Mr. Edelman) who posed the question: why should the European Community countries grant us free trade in industrial goods which would be convenient to us if we deny them advantages for their agriculture which is so important to them? Again, my right hon. Friend the Member for Battersea, North seems to imagine that we would have the advantage of industrial free trade and cheap food when in the past the EEC has refused that alternative. Obviously. if the Community is to grant industrial free trade to us, it is only too likely to insist on an agricultural component. Indeed, even within the European Free Trade Area, which was an industrial free trade area, there was increasing pressure for an agricultural component within that community.
    Mr. Jay: If my right hon. Friend is to argue that way, may I ask him to explain why the EEC has already agreed to accord to all the EFTA countries precisely the situation which I have proposed of industrial free trade and freedom for their own agricultural policy? Why should they discriminate against us alone?
    Mr. Dell: I am afraid that my right hon. Friend must appreciate the difference between the industrial economy of the United Kingdom and that of the much smaller countries of the remaining European Free Trade Area.
    Mr. Jeremy Thorpe: Is the right hon. Gentleman able to confirm, for the benefit of his right hon. Friend who seems in think that EEC countries would hesitate before putting up tariffs against this country, so valuable is our market to them, that they export only 8 per cent. of their total exports to this country and that, therefore, we are a minuscule percentage of their total exports from that standpoint?
    Mr. Dell: I entirely accept the figure which the right hon. Gentleman provides, which I believe is correct.
    The second alleged advantage of an industrial free trade area as compared with the EEC is that this would grant us freedom from interference in our industrial and regional policies. If I may say so, I had considerable experience of interference with industrial policies in this country. Membership of the European Free Trade Area never gave us freedom from interference with our industrial policy. There was bitter criticism of the investment grant system. The aluminium smelter scheme had to be fought through against opposition of a kind which almost led to the break up of EFTA. If anyone wants an example of an industrial development in this country being inhibited by membership of a community, it is that the British Government in 1968 decided to cut the aluminium smelter project by a sizeable amount in order to meet EFTA objections. Therefore, any idea that one is free from interference in one's industrial policy as a result of membership of a free trade area is totally false.
    The Industry Act which right hon. and hon. Members of the present Opposition introduced in 1972, which re-established investment grants in the development areas, would have caused major difficulty in EFTA had we not obviously at that time been leaving EFTA for the European Community. I do not want to discourage any right hon. or hon. Member of the Opposition from supporting the Government tomorrow night, but I would say that the Industry Bill of this year would be having a pretty rough ride in EFTA if we were still a member of that organisation.
    It is in our interest that there should be rules governing industrial and regional policy, provided that they leave us sufficient freedom of action. The European
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    Free Trade Area was sheer laissez-faire. There was bitter opposition to everything that interfered with free competition. The European Community has always had a social purpose, which has grown stronger over the years. Industrial policies and regional policies have been increasingly understood as of importance in bringing forward the poorer areas of the European Community, of which we, unfortunately, are one. We shall have far greater freedom on industrial policy within the European Community than we ever had in EFTA.
    I repeat the point frequently made in this House: a free trade agreement with the European Community means as much control of industrial policy as, if not more than, membership of the European Community could conceivably mean.
    My hon. Friend the Member for Bristol, North-West (Mr. Thomas) referred to Article 92. I do not know whether he has read the free trade agreement with Sweden. This is a unilateral declaration made by the Community—with Sweden not participating in this—regarding State aids. It says:
    "The European Economic Community declares that in the context of the autonomous implementation of Article 23(1) of the Agreement"
    which is the agreement relating to State aids—
    "which is incumbent on the Contracting Parties, it"—
    that is, the European Economic Community—
    "will assess any practices contrary to that Article on the basis of criteria arising from the application of the rules of Articles 85, 86, 90 and 92 of the Treaty establishing the European Economic Community."
    We do not escape Article 92 by leaving the Community. All we achieve is that we have no voice at all in the implementation of Article 92.
    The third alleged advantage is that we would have no budget contribution. We have always admitted that there would be this net budget contribution, but it is a disadvantage which has been substantially reduced by renegotiation. That is an important gain from renegotiation. It is, however, a disadvantage which we must confess on the current evidence has always been exaggerated in size. The Commission, much criticised, has always

    1149
    been rather sceptical of the calculations made on this point by the British Government—for example, the calculation made in the 1970 White Paper of the then Labour Government and the 1971 White Paper of the Government of hon. and right hon. Gentlemen opposite.
    In the current White Paper are given the figures of how we have done very much better than was estimated. Why have we done better? Because the European Community is a political organisation which understands that countries which make contributions will expect a return from them. I must confess to the House that I am in a sense partly responsible for one recent exaggeration of the figures on the extent of this budget contribution, because when we came into office I was responsible for the original calculations which were put to the Community as the basis for the budget renegotiation.
    We have since seen, as a result of changes in the situation, that we there rather over-estimated the likely gap between our budget contribution and a contribution based on GNP. A number of factors are likely to reduce the budget burden. For example, any increase in the VAT proportion of our contribution will reduce the excess above our share of GNP because that share is more closely related to GNP than is our levies and duties share. We have, however, achieved certain things through negotiation—a repayment of up to £125 million and a review of the situation if for a period of three years a country has to take advantage of the new corrective mechanism. I would tell my hon. Friend the Member for Gravesend (Mr. Ovenden) that there is no suggestion that the scheme will stop after seven years. There will simply be an assessment of the scheme at that time.
    As compared with the original Commission proposals, there has been a useful modification of the balance of payments test which means that a balance of payments surplus does not eliminate the possibility of the review procedure operating. Under the existing proposals,
    1150
    if we had had a balance of payments surplus we would have ceased to benefit and might not then have had a period of three years of benefit from the corrective mechanism, and the review machinery would not then have operated.
    The next alleged advantage of leaving the European Community for some other type of organisation, an industrial free trade area organisation, is that there would be no liability to the free movement of capital, a point made by a number of my hon. and right hon. Friends, most recently by my right hon. Friend the Member for Jarrow (Mr. Fernyhough). The manifesto says:
    "We need an agreement on capital movements which protects our balance of payments and full employment policies."
    But we have found in actual practice during the lifetime of this Government that we have adequate protection when there are balance of payments difficulties, under Articles 108 and 109 of the Treaty of Rome; and we are using that facility now.
    A more important influence over the movement of capital will be the fact that the United Kingdom within the community will be a much better place in which to invest than a United Kingdom outside the Community. This will certainly be true for American investors who will bypass this country if we do not have free access from here into the Community —and that is true for many British investors. For example, Imperial Chemical Industries has said that it would be compelled to invest more within the Community and less in Britain if we were not members of the Community.
    It being Ten o'clock, the debate stood adjourned.

    BUSINESS OF THE HOUSE (SUPPLY)
    Ordered,
    That the Business of Supply may be proceeded with at this day's Sitting, though opposed, until Twelve o'clock.—[Mr. Walter Harrison.]

  EUROPEAN COMMUNITY (MEMBERSHIP)
  Question again proposed.
  Mr. Dell: In any case it should not be imagined that overseas investment by the United Kingdom began when we entered the EEC. My hon. Friend the Member for Bristol, North-West quoted, I believe correctly, figures for overseas investment by this country in 1973 and 1974. They represented very large sums and most of the money did not go to the European Community, although I accept that large amounts did go there in 1973.
  As a country we have invested large sums abroad for a very long period and I believe that the real problem is that we have invested in the slow growth Commonwealth rather than in fast-growing Europe. In any case, overseas investment by British firms is now done by retained profits and by borrowing abroad, and these are processes which it would be very difficult for a British Government to control whether Britain was in the Community or not.
  I know that there is a fear that the free movement of capital will lead to the centralisation of economic activity within the EEC. I doubt whether that will happen. I think that there are certain countervailing tendencies, including regional policies, which will prevent that. However, from that point of view I believe that we are better off within the EEC because the United Kingdom will be a more attractive place for both British and American firms to invest in if we are in the Community than if we are outside.
  Mr. Ron Thomas: Will my right hon. Friend give any indication why over the last couple of years there has been a failure to bring about capital investment in Britain? We were told years ago that the great challenge of the Common Market would mean that capital investment would flow into Britain, yet the reverse happened. We have had a slump in capital investment at home and a massive movement of it overseas.
  Mr. Dell: If my hon. Friend wishes to raise debating points with me I must tell
  1152
  him as a matter of fact that since we entered the European Community investment in this country has risen by 20 per cent. I do not happen to attribute that to our entry into the EEC. I believe that it will take time before the beneficial economic effects of membership of the EEC can be identified. Nevertheless, that is a fact if my hon. Friend wants the facts.
  The last supposed advantage of removing ourselves from the European Community in favour of this other possible alternative is that an industrial free trade area would involve no risk to sovereignty. I do not underestimate the sovereignty argument, particularly as it may be used and abused during this campaign. It is obviously the prime duty of Governments to protect the interests of their citizens, and it is right that we should, as the manifesto said, reject any kind of international agreement which compelled us to accept increased unemployment for the sake of maintaining a fixed parity.
  The problem of European monetary union has been raised by a number of hon. Members. I repeat what has been emphasised—that this is a very distant objective and that any progress towards it will be subject to veto in the Council of Ministers by a Government which will be responsible to this House of Commons. I am not a supporter of the federalistic conception of Europe. I believe that Europe is an association of sovereign States for certain common purposes, States which have agreed to pool their sovereignty in the interest of these common purposes. There is nothing in sovereignty which says that a Government should not combine with other Governments for common purposes. On the contrary, the concept of an economic alliance is not strange to this country. Indeed, one might say that this country invented it in the form of the Commonwealth. It broke down in the case of the Commonwealth, because the economic interests, especially, of the developed members, conflicted too greatly. Incidentally, we cannot expect the underdeveloped members to continue to supply us with cheap food.
  As an economic alliance the European Community is far more suitable for this country. Power is as important in economic matters as it is in political and

  1153
  defence matters. There was no greater expression of that principle—one that has at any rate helped to influence me, although I had little doubt at the time, during the debate in 1971—than the decisions of President Nixon on 15th August 1971, which were the greatest expression of power in economic affairs since the war.
  For this country an economic alliance is still useful in trade matters, in the convergence of economic policies which our membership of the European Community encourages and in the way in which we can discuss with other members the development of their policies—whether, for example, Germany and Holland should reflate in order to ease our balance of payments problems—as we do regularly in the Council of Finance Ministers.
  Mr. Hooley Mr. Hooley rose—
  Mr. Dell: I shall come to my hon. Friend, because he made a point in this context. He said that my right hon. Friend the Chancellor of the Exchequer achieved the continuation of the IMF oil facility as a representative of this country, and that the Community had no influence on that success. I am sure that my right hon. Friend would confirm that in developing those policies in Washington at the IMF he had the inestimable and valued unanimous backing of other members of the Economic Community.
  Mr. Hooley: The point 1 was making was that when the oil crisis hit the European Community it was totally helpless to cope with it. It was only by a combination, through the IMF, of all the industrial countries of the world—the United States, Japan, Canada and the Europeans—in a genuine international forum that the problem was solved. It was not done in Brussels.
  Mr. Dell: I accept that it took the European Community some time to confront the great new crisis which the world faced 18 months ago. However, the Community is now developing joint policies to face that situation, and it is exercising a European influence in the world.
  Mr. Peter Kirk: Does the right hon. Gentleman not agree that
  1154
  in the oil crisis the end product was that no member of the European Community went short of fuel, as a result of the decisions taken by Ministers within the Community, although they were unable to make them public at the time?
  Mr. Dell: We had our own problems, but fortunately we have got over them.
  I agree with those who say that the dangers of coming out are far more serious than the costs of not joining in the first place. Undoubtedly, there would be a grave shock to confidence within this country and outside, a grave shock to industrial confidence. It would increase the difficulties of financing our balance of payments deficit. We would engender uncertainty about where we expected to find our future. To come out would be a dangerous course for this country to take. I very much hope that the British people will vote "Yes".
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. We are now in extra time. There have been some intolerably long speeches, particularly when I have not been in the Chair. I hope that hon. Members who catch the eye of the Chair from now on will try to speak for no more than about 10 minutes.
  10.10 p.m.
  Mr. Peter Blaker: The House will agree that in a powerful speech the Paymaster-General has poured a salutary douche of cold water over those right hon. and hon. Members who have suggested for months that there is an easy alternative to membership of the Community to be found in membership of a free trade area. His speech killed that argument stone dead.
  I want to deal with three other anti-Market fallacies. I hope to make at least one new point. The first fallacy is that our membership of the Community is an aberration from our traditional foreign policies, which have required us, when we have had to choose, to give priority to the open seas, the Commonwealth and the Empire, over Europe. I do not accept that there is now any conflict between our interests in Europe and

  1155
  our interests in the Commonwealth. But it appears clear to me that historically we have always had to give first priority to the home base, by which I mean Europe, simply because it is geographically our next-door neighbour. In saying that, I do not intend in any way to belittle the importance of the Commonwealth. My Commonwealth credentials, by blood and upbringing, are strong.
  I should like to give an example of our having given priority to the strength of our home base at the expense of the distant world. In the Napoleonic wars we gave Indonesia to the Dutch in order to secure their support against Napoleon. It is only recently that the myth has arisen that our natural priority is in the distant seas. The truth is that the main thrust of British foreign policy has always had to be that we should not allow a strong grouping of powers on the Continent unless we are a member of it. If we pull out of the Community, there will be such a strong grouping of which we are not a member, in which we shall have no voice in the formulation of policy. I am not suggesting that such a grouping would be hostile, but over the years its interests and ours would diverge.
  The fact that we have had to have what the Government call a renegotiation is an illustration of that proposition. We have had to have a renegotiation because in the 12 years or so during which the Community existed, and we were outside, it adopted measures which we should not have adopted if we had been inside from the start. This grouping on the Continent, of which I assume we should not be a member if we left the EEC, would steadily grow stronger relative to us, and in due course would rival in strength the United States. It would move into new fields of activity which it has not yet touched.
  It is already heavily involved in international trade. We have worked out with our partners a common stand for the GATT negotiations which are now beginning. If we stay in the Community when the negotiations reach their climax a year or two from now we shall be able to influence its decision when we come
  1156
  to the final bargain with the Americans and Japanese on the solution. If we are outside, the decision will be taken by the Japanese, the Americans and Europe, and we shall be swept on one side.
  The Community is already working out policies in the International Monetary Fund. I am glad that the Paymaster-General put the record straight in reply to his hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), about the important help which the Community gave to the Chancellor of the Exchequer in securing the arrangements for recycling petro-dollars.
  The Community is working out policies vis-à-vis the developing world. It will move on in the coming years to work out policies towards Portugal, Spain, the Mediterranean, Africa and Eastern Europe. And the questions which it will ask itself will be, "what are the interests of our members? What interests do we have to protect?" It we are not a member of that group they will not be asking what our interests are. Indeed, our interests will be left on one side. If we are inside we can shape the policies of the Community. If we are outside we cannot. We have shown already how we can shape those policies in the preparations for the European Security Conference, in the Lomé Convention and in other ways. Inside we shall be partners: outside we should be pawns.
  The second fallacy about which I want to speak is that if we leave we can somehow jump immediately back to the situation in 1972. We have seen from what the Paymaster-General has said that we could not do that in relation to trade. What he did not say was that our trading relations with some 80 countries are now governed by agreements which we have made through the EEC. It is not a question only of our relations with the Community itself, or indeed only of our relations with EFTA. Our trading relations with the Mediterranean countries, with the 46 Lomé countries, with other countries, are now governed by agreements made because we have been members of the Community, and the mind boggles at the complications which would

  1157
  result, were we to come out, when it came to the renegotiation of our trading relations with all those countries.
  We could not jump back to 1972 for another reason—that we would have broken a treaty. My hon. Friend the Member for Banbury (Mr. Marten) pointed out that my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said that we could break the Treaty by coming out, but nevertheless, if we did break the Treaty, our standing in the world would be very seriously affected. The United States, for example, would regard us from then on as a less-reliable ally. The United States would be less prepared to undertake serious negotiations with us in the future.
  In addition, we could not go back to 1972 because our economic strength has been drastically reduced since 1972. It is now true, I understand, that one year's surplus of the OPEC countries could buy up the whole of British industry. That was not the situation in 1972, and that is the measure of the diminution of our economic importance in the world if we stand on our own.
  I come to the third fallacy, and I think the most serious. It is claimed by hon. Members who want us to come out of the Community that because NATO is the main organ of Western defence, our departure from the Community would not hurt the security of the West or the prospects for peace. I believe that the greatest danger to peace at the present time is the disunity and the weakness of the Western world. I believe that the Western world is beginning to show signs of an illness of the will which has to be arrested, and arrested fast, because if there is one thing which could tempt the Soviet Union to abandon its policy, which it describes as détente, and to go in for an adventure, it is the thought that. because of the fragmentation, the weakening of the will, of the Western world, it could make a swift coup here or there in Western Europe. "The West is on its knees". Those are not my words. They are the words of Alexander Solzhenitsyn spoken only about two years
  1158
  ago—but spoken before the events in Greece and Turkey, spoken before the events in Portugal, spoken before the events in Vietnam and Cambodia, spoken before the present disarray in the United States. If he thought that the West was on its knees two years ago, what must he think now?
  The psychological effect of our departure might deal a shattering blow at the solidarity and political will of the Western world. Our best chance of maintaining our security and, indeed, of achieving results from détente lie in the West being united, strong and firm, and that is why I hope that the House will on Wednesday decide by a massive majority in favour of our remaining in the Community.
  10.20 p.m.
  Mr. Doug Hoyle: I have listened intently to the debate, and it seems to me that we have been here before. Many of the speeches could have been taken from the debate of two years ago. I well understand why the Opposition are so enthusiastic about the principle of the Common Market. What I fail to understand is why so many of my hon. Friends are intent on being in a capitalist institution.
  Listening to the debate, it has been difficult to realise that when hon. Members have referred to the Commission they have been speaking about a tight bureaucratic machine controlled by men who are not responsible to anyone in an electoral sense. It has been difficult to imagine that the common agricultural policy, which has created all the surpluses, is still with us. We have had butter and beef mountains and a wine lake, and the Community is steadily going in the same direction with dried milk. Very soon the warehouses in the Common Market will be bursting with wheat.
  However, one would not have realised listening to this debate that that was so. One would have thought that everything in the garden was lovely. One would not have believed that we were engaged in possibly the most serious debate which has taken place in this House this century, and that we were talking about our

  1159
  right to self-government and the Government's right to carry through the programme on which they were elected without outside interference. One would not have believed that we were determining our right to impose taxes and the price which we should pay for food.
  The whole debate has seemed so unreal. We have heard about the dynamic effect that staying in the Common Market will have on this country. Only a short time ago we heard about the dynamic effect that it would have if we joined and how it would lead to increased investment. What has been the result?
  Mr. Churchill: The Labour Government.
  Mr. Hoyle: Why do we have the Labour Government? It is because the Tories got themselves into trouble. But we shall not continue to have the Labour Government if we remain in Europe running up a deficit which in 1974 was over £2,000 million and is not getting better. Indeed, it is getting worse.
  My hon. Friend the Member for Bristol, North-West (Mr. Thomas) referred to the question of regional policy. The hon. Member for Manchester, Withington (Mr. Silvester) and my hon. Friend the Member for Farnworth (Mr. Roper) have spoken about the benefits from membership of the EEC which have accrued to the textile industry. What has happened in the textile industry has happened in many other industries. The deficit on our balance of trade with Europe has increased from £4 million to £69 million. Far from helping us in relation to cheap imports into this country, membership of the EEC has added to our burdens because we have had to take cheap imports from the Mediterranean associates—so much so that the textile industry is on short-time working, and unless it is given help urgently there will be no textile industry in this country. Is that what hon. Members mean when they talk about the dynamic effect of being in the Common Market?
  A short while ago some of us wrote to the Secretary of State for Industry about the effects of the Common Market upon the Industry Bill. We waited a
  1160
  long time for an answer to our letter. We then learned that the difficulty was due to the fact that the Industry Department's view was different from that of the Foreign and Commonwealth Office. Eventually, after a lot of wrangling and pressure, we got an answer—from the Foreign and Commonwealth Office. I should have liked an answer from the Secretary of State for Industry.
  I am sorry that we shall not be hearing from those Ministers who have dissented. although I gather that perhaps one of them will make his voice heard before the debate ends so that we can hear the two sides in the argument. At present we have a "Tweedledum and Tweedledee" situation on the Front Benches. I should like to hear why certain Ministers have dissented. When we examine which Ministers in the Cabinet have dissented we find that they are the Ministers responsible for Trade, Industry, Employment and Energy. These are all key areas. There is a good reason why they do not find the terms acceptable.
  Mr. Churchill: Why do they not resign?
  Mr. Hoyle: We must wait and see. Why should they have to resign to make their voice heard?
  Mr. Churchill: Collective responsibilities.
  Mr. Hoyle: The hon. Gentleman knows all about collective responsibility. That is the way his party went down to defeat and condemned its leader afterwards.
  I want to ask about the control we have over our own economy as long as we remain in the Common Market. What has not been denied is that the Commission can intervene in this country. If necessary it can overrule our laws, passed by this Parliament, by going to our courts. We could have the ludicrous situation when an appeal could go to the House of Lords and it could overrule the Commons.
  At the moment there is a similar case in France where the wine growers are in a militant mood because of the import

  1161
  of Italian wine. The Commission believes that it has a justifiable case for taking the French Government to the courts. It believes that it would win. What is happening? There are other voices. Indeed, the President of the Commission has warned that it is a difficult time to take that kind of action. He has warned that if the Commission does so it might alarm the British public and could affect the way they will vote in the referendum. It is on such occasions that the cat is let out of the bag, if only briefly.
  I believe that our economic salvation lies with North Sea oil. Shall we be able to charge one price for the oil in this country and another price in Europe? As long as we remain in the Community there will have to be one price for ourselves and the rest of the Community. We shall lose control over a vital area of our economy. I imagine that that is why the Secretary of State for Energy does not find the White Paper acceptable.
  The Government have got themselves into a remarkable situation. They are going along with their natural enemies, the whole of the Liberal Party and most of the Conservative Party. For the first time a Labour Government are allied not with the TUC but with the CBI. They are on the side of Fleet Street, not on the side of the common people. They are on the side of the privileged and not on the side of the under-privileged.
  That is not why I am a member of the Labour Party. I am a member of the Labour Party because I believe in a Socialist society. As long as we remain in the Common Market the task of the Labour Party in creating a Socialist society will be made more difficult. That is why I hope that the people will reject the terms contained in the White Paper and will give a resounding "No" when their opinion is tested.
  10.30 p.m.
  Dr. Alan Glyn: I wish to elaborate on the case for our staying in the European Economic Community. If we leave, our economic problems will not be solved, as was so well demonstrated by my right hon. Friend the Member for Stafford and Stone (Mr. Fraser).
  1162
  It would be a disaster for us to leave the Common Market. To do so would be in breach of a solemn treaty, and that would result in a loss of confidence in us throughout the world. What nation, group of nations or association is likely to give us better terms? If we break one treaty, are we likely to be allowed to conclude another? We should lose all the economic advantages of membership not only for ourselves but for our Commonwealth partners and the undeveloped countries. Our Commonwealth partners have signified that they would be reluctant for us to leave the Community.
  What is the alternative? The Paymaster-General is the only one to have made any serious alternative suggestions, and he said that those suggestions were not viable alternatives to our remaining within the Community.
  From another angle, can this country go it alone and still afford to pay for its defence with or without United States help? The time has come for the European Community to share the cost of our defences because we in this island are unable to pay for them ourselves.
  Those are my main reasons for believing that we should remain within the Community. I pay tribute to the Government for their renegotiations. They should not be disregarded, but we must remember that they have in no way altered the fabric of the treaty. They are negotiations which would normally have been conducted as a continuation of the terms of the treaty, but they have been conducted under the guise of renegotiations.
  The holding of the referendum takes away the sovereignty of Parliament. This will not be the only referendum. There will be a series of referenda on other matters which can only detract from the sovereignty of Parliament.
  We all want to see a more democratic European Community. The argument about loss of sovereignty is a myth. Joining any organisation, be it NATO or any other, means some loss of sovereignty. But the most important consideration is that there is no other solution. Out of Europe we should be isolated and alone. the strength of sterling would be weakened

  1163
  and we should be unable to find alternative markets. World confidence would be shattered by the breach of the treaty.
  The answer to our problems is here on this island, and is in our own hands, but we cannot solve them alone. We shall be far better off if we remain in a forward-looking expanding Community which is capable of ensuring a better standard of living for future generations. Our duty is to remain in the Community, to strengthen it and to exert our influence in making sure that we continue to exert our traditional influence on world affairs, and we shall do that better inside the Community than isolated and alone.
  10.35 p.m.
  Mr. Ifor Davies: I am glad to have the opportunity to endorse the opening remarks of the hon. Member for Windsor and Maidenhead (Dr. Glyn). The hon. Gentleman paid a tribute to my right hon. Friends for their achievements within the past 12 months as regards the EEC. They were confronted with a difficult task. The House should be generous enough, as the hon. Gentleman has been, to acknowledge the success of their efforts. I know that there have been various degrees of compliments paid. Of course, some say that there has been no success and some say that the success has been minute, but I think that the whole House should acknowledge that the efforts of my right hon. Friends were substantially successful.
  There has been a growing tendency to move away from the argument on terms back to the argument on the principle of pro- or anti-Europe. Whether we like it or not, we are all Europeans. We cannot escape from that simple fact. There can be no difference of opinion when I say that the issues concerning Britain's entry are complex in their nature and most wide ranging in their scope. It is for that reason that many people are greatly perplexed and confused.
  Whatever criticisms there may be of this Parliament, I am convinced that many people throughout the country are looking to the House this week for leadership. That is why I greatly welcome the positive wording of the White Paper and the clear leadership, if I may say so, that was given yesterday by my
  1164
  right hon. Friend the Prime Minister. I do not pretend that the EEC offers a magic wand with guaranteed solutions to all our problems. However, it offers a path along which solutions may be found. In the last resort the economic advantages may well be a matter of balance and will depend upon judgment. I have enough faith in parliamentary democracy to believe that the majority of the people, and all those who have been so deeply involved in the renegotiations, will accept the judgment of the Government.
  I confess that the one issue which caused me some concern at the beginning was the possible effect of the EEC upon our regional policies. The fact is that more concern has been voiced in Wales about the effect of entry on regional policy than on any other issue. Some of my hon. Friends were so worried that they wrote pamphlets about it, but I understand that attitude because the greater part of Wales is designated as a development area.
  Nothing therefore gives me greater pleasure tonight than to read the clear assurance contained in paragraph 53 of the White Paper on Regional Policy, which reads:
  "New principles for the co-ordination of regional aids within the Community will allow the United Kingdom to continue to pursue effective regional policies adjusted to the particular needs of individual areas of the country. The Communication setting out these principles acknowledges that national governments are the best judges of what is required in their own countries…"
  I accept that firm declaration. It places my mind at rest regarding the attitude of the EEC towards regional policy. Despite regional aids the best way to help the regions is to ensure the greater strength of Britain's economy as a whole. That in turn concerns the Principality of Wales. It is an inescapable fact that the Welsh economy is deeply and extensively involved in the overall British economy. I am sorry that the Plaid Cymru Members are not present. I wish to say to them that any attempt to quantify the effect of the Common Market in Wales in particular as distinctly separate from Britain is unreal and misleading. The present campaign in Wales by Plaid Cymru to set up EFTA as a real alternative to the Common Market has already been destroyed by the remarks of my right hon. Friend the Paymaster-General.

  1165
  If it is considered that membership of the Common Market destroys some freedom of action which otherwise would be open to Britain, I remind the House that freedom for any nation to choose this or that course of action is not determined merely by willingness or refusal to sign treaties or to enter into international obligations, but by the strength and vigour of the nation. That was the message of the Prime Minister's speech yesterday. Every historic choice implies challenge as well as opportunity. To take advantage of the Common Market might mean accepting risks, but this is a characteristic of anything in human existence worth doing.
  This is not the time to take a defeatists attitude. British industry can call on skilled manpower, management and technical ingenuity second to none. The place in which to exploit those gifts is within the Community, and we should not withdraw into deadly isolationism and blind and narrow nationalism.
  Apart entirely from the economic argument, I should like to ask my hon. Friends what has happened to our vision and our commitment to internationalism. We often hear comments about what has been said at annual conferences. I vividly recall two conferences which passed with overwhelming majorities two remarkable declarations — declarations which I find most refreshing and most inspiring on the eve of another historic and critical decision. Other hon. Members quoted in this debate passages from annual conferences, and I do not apologise for quoting majestic phrases from conference declarations. The first Declaration is from the Labour Party conference in 1962, which I would ask my hon. Friends to note:
  "The Labour Party regards the European Community as a great and imaginative conception. It believes that the coming together of the Six nations which have in the past so often been torn by war and economic rivalry, is in the context of Western Europe, a step of great significance. It is aware that the influence of this new Community on the world will grow and that it will be able to play… a far larger part in the shaping of events…than its individual member States could hope to play alone. It is these considerations, together with the influence that Britain as a member could exercise upon the Community—and not the uncertain balance of economic advantage—that constitute the real case for Britain's entry."
  1166
  Lastly, I quote from another declaration which was carried at the Labour Party Conference in Scarborough in 1967—again by an overwhelming majority:
  "The Labour Party regards the enlargement of the EEC as a first step towards the creation of a wider and more unified continent. We believe that a major objection of an enlarged European Community must be to eradicate the tensions and mistrust which still keep East and West sharply divided. Britain, inside the Common Market, must remain faithful to her basic commitment to reduce East-West tensions, promote disarmament and seek the most effective means of assisting the development of the poorer countries.'
  We have already heard evidence of the measures which have been taken to achieve that end. The declaration continued:
  "Together with her European partners, Britain must also forge a new will and new endeavour to overcome the poverty and disease which still afflict two-thirds of the people of the world."
  We said:
  "The challenge is immense and the opportunity unique."
  Tomorrow night that same challenge confronts the House. I hope that my hon. Friends will not betray the faith of the early pioneers of this movement so admirably described in the 1962 and 1967 declarations.
  10.46 p.m.
  Mr. Maurice Macmillan: The hon. Member for Gower (Mr. Davies) referred to the tragic division of Europe by the Iron Curtain. The argument about what should be the relationship between the United Kingdom and the rest of Europe has continued for a long time. It is about 20 years since I made my maiden speech on this subject. We are still arguing about this matter. This was always a political as well as an economic question, contrary to one or two suggestions which have been put forward this evening. That is demonstrated by the fact that there has never been any question of allowing the neutral countries of Europe to become members of the European Community.
  The United Kingdom is now a member of the EEC. However, today the long debate which has continued for some time has changed. This debate and that which will take place during the referendum campaign are different from that which led up to our joining the Community. For we are not debating, as we

  1167
  did 20 years ago, the question whether we should become engaged. That ended with the curiously illicit relationship with EFTA. Nor are we talking, as we did 10 years ago, of the terms of a marriage settlement. I now argue against taking the marriage through the divorce courts. This is the point at issue—not shall we join, but shall we renege on our treaty obligations and leave the Community'?
  I do not think that the arguments put forward in the debate about the benefits or otherwise which we have gained in two and a half years are in the least relevant. I find it specious and disingenuous to seek to blame high unemployment, inflation, balance of payments problems and the rest of our difficulties on our membership of the Community, especially since the period of our membership has coincided with an unprecedented increase in world food prices and primary products and an energy crisis which has affected the whole of the civilised world. Any wounds to our economy and body politic, apart from those which have been self-inflicted, have not derived from our relationship with Europe. In any case all that was ever claimed for the Community in the economic sense was that it would give us an opportunity which was no longer available to us elsewhere. That is the point we must bear in mind with regard to economic considerations.
  Any arrangements we may be able to make from outside the Community will not give the same opportunities as full membership. Nor will they match the advantages which we grew used to during the years of our great Empire, for it is an illusion commonly held in this country that the United Kingdom was always a successful manufacturer and seller of goods abroad. That is not true. We relied very heavily on our overseas investments, since 100 years ago the amount we invested abroad was about three times our gross domestic product. Now the figure is about one-third of our GDP, although I think that the yield has become higher than it used to be.
  Because British insurance companies paid out on the San Francisco earthquake and the American companies did not, we got the great part of the reinsurance business of the United States, and now we have it of a great deal of the rest of the world. But if we were no longer in the Community, there would be people ready
  1168
  and willing to set themselves up to try to take over that small proportion of invisible exports from us.
  We have not held our own in the open market. We used to have terms of trade always in our favour because we controlled the economies of the countries with which we traded. We forced them to sell cheap to us and to buy their goods dear from us. But even before the Second World War we never succeeded in covering more than 75 per cent of our import bill with physical exports but relied upon invisibles, which was far easier, first in the Empire and then in the Commonwealth. Then the advantages of the closed economy extended beyond the Commonwealth through the sterling area.
  There is a new relationship now. We have to contend with a new balance of trade power between the primary producers and the manufacturing countries. That is a balance which is especially harsh to the United Kingdom because of our dependence on imports and because of the size of our population.
  I do not think that we shall find it easy to deal with these problems in isolation. The difficulties of petro-dollars, the use of the Arab money, the dislocation that it could cause by movement across the exchanges, and all the problems of helping the developing countries are far more easily resolved with United Kingdom membership of the European Community. I agree with the hon. Member for Birmingham, Ladywood (Mr. Walden), who said in the course of his great speech that we should be facing very severe difficulties and so would many other parts of the world if at this stage we were to leave the Community.
  The criticism has been made that Europe did not act in a united way over the energy crisis. My hon. Friend the Member for Banbury (Mr. Marten) quoted President Ortoli's strictures on Europeanism and on European united action. I agreed with those strictures. But that is no reason for deserting the Community. It is all the stronger argument for remaining in it. When in a lifeboat with its engine not working very well, there is a great deal to be said for mending the engine. There is damn all to be said for dropping it overboard, and still less for jumping into the sea and trying to swim home.

  1169
  The arguments for remaining in are political as well as economic, including the great question of defence. The only contribution that we can make to Europe, to the Commonwealth and to the United States is as a member of the Community. We are little use to anyone else or to ourselves except as part of a greater grouping.
  I think that the Community is developing much more on the lines of the old Commonwealth than on federal lines, with meetings of Heads of State much more like the old Commonwealth Prime Ministers' Conferences. I believe that that is the way it will go for some time.
  Looking at the world, the Community is a small enough group, even with the United Kingdom. We have the Iron Curtain countries to the east. Now we have the Far Eastern countries being handed over to Communist control, with the United Kingdom withdrawing from her bases there. We have Russian influence developing in the Middle East. We have all the problems of the United States bases and the possible loss of the Azores. We have Communist penetration in Portugal and elsewhere in Europe.
  If those difficulties are beginning to drive the United States into the start of a more restricted inward-looking policy—the first hints of isolationism—what value are we in the United Kingdom to the United States, to Western Europe and to the Commonwealth? Feebly armed, having abandoned our bases in the Middle and Far East, what can we do to help, except within the Community?
  A great argument has been made that we can do little because we lose our sovereignty. But whether we are talking about nationalism or the supremacy of Parliament, the threat to sovereignty comes not from the European Community but from other places—as has been pointed out by right hon. and hon. Members on both sides of the House today—both outside the country and, alas, from within.
  My hon. Friend the Member for Banbury, in talking about sovereignty, distinguished between sovereignty and power. Politics are about people and power. I am not willing to trade the semblance of sovereignty and, in doing so, to give up
  1170
  the chance of this country building up real strength, power and independence so that our people can remain free. There is a great danger that we seek the shadow and lose the substance. I am interested in the substance.
  Whether we like it or not, our freedom as a country and as a people and our ability to maintain the rule of law, depend not on the technical shadow of sovereignty but on the reality of political power. In my view, that political power is available to the United Kingdom only as a full member of the European Community.
  10.58 p.m.
  Mr. Bruce Douglas-Mann (Mitcham and Morden): The right hon. Member for Farnham (Mr. Macmillan) leaves me in some difficulty. I had intended to start my speech by saying that, having listened to and read the greater part of the debate, I found myself in substantial agreement with the majority of hon. Members who have spoken. However, I find myself in strong disagreement with the right hon. Gentleman, as will become apparent from my speech.
  I think that to a considerable extent both sides in this dispute are right. I have been opposed to British membership of the European Economic Community for many years, and I still am. But I agree with the pro-Marketeers that we shall have to pay a very heavy economic price for withdrawal from the Community. I did not think so in 1971. At that time I thought that the balance of economic advantage lay outside the Community. I now accept that in the short term and, indeed, for quite a number of years we shall be relatively poorer outside rather than in the Community. Nevertheless, I believe that it is in our long-term interest to withdraw and that it is right for us to do so.
  It would be foolish to blind ourselves to the economic effects of withdrawal. Not only have our trading patterns of the past been disrupted, but we are now over our ears in debt, and a great deal is on seven-day withdrawal. We cannot meet those debts. If our creditors lose confidence in us—there is a great deal of evidence that a decision to withdraw from the Common Market would certainly result in a massive loss of confidence—we shall face a collapsing pound. Then, only massive help from the IMF,

  1171
  inevitably on terms of great cuts in public expenditure, the elimination of the Budget deficit and, probably, of budgeting for a surplus which would involve cutting sharply into consumption and employment, would enable us to go on trading at all.
  Nevertheless, and despite the very distasteful immediate future I am foreseeing, I believe that it is right for us to come out, because continued membership will strengthen those tendencies of our economy and the economies of the rest of the developed countries which will ultimately lead to far greater disasters than those I am now envisaging.
  My opposition to our membership has been based on a number of grounds. The first is that the fundamental purpose of the Treaty of Rome—this was illustrated by the right hon. Member for Farnham when he referred to compelling countries to sell to us cheap and buy from us dear, although admittedly he was talking of the past—remains the fundamental purpose of the EEC today. The right hon. Lady the Leader of the Opposition certainly confirmed that when she spoke about bargaining for raw materials as a Community. Exactly. One of the fundamental and original purposes of the formation of the EEC was to ensure that the terms of trade upon which rich Europe traded with the relatively poor parts of the world were advantageous to the rich parts and disadvantageous to the remainder.
  In the short term that may seem very attractive to us, but in the long term I am quite sure that it is not. I am sure that, apart from the fact that we now live in a world where nuclear weapons are cheap, where it is easy to disrupt and easy for a small and economically relatively unpowerful country to cause immense damage to a rich country, we live in a world in which we are far more economically interdependent than ever previously. We have had the illustration of the action of the OPEC countries, but we have had many other less dramatic illustrations where a small change in one part of the world or a stoppage in one part of the economic machine, can cause the entire machine if not to halt completely at least to run very unevenly and very unsatisfactorily.
  1172
  We cannot really suppose that indefinitely into the future the poorer parts of the world will tolerate the increasing division between the rich parts and themselves. I do not believe that it is in our interests, let alone those of the rest of the world, for these economic divisions to be perpetuated.
  It is one of the fundamental purposes of Europe, although it is certainly not expressed as such, to ensure that Europe trades advantageously with the rest of the world and at the expense of the rest of the world. I accept, of course, that the Lomé Convention has indicated a greater degree of willingness on the part of Europe to trade more advantageously with selected poorer countries. But basically the position of Europe is that of a rich man who maintains "I must get richer so that I can go on giving something to charity".
  My second and closely associated objection to British membership and the effects of membership is that membership will inevitably tilt still further the dependence of the economy towards manufactured goods and away from the provision of public and private services. I do not believe that the world's resources —energy, minerals the ingredients of plastics, chemical fertilisers or any of the other supplies—will be sufficient to enable us to continue the dependence of the economies of the developed countries on the consumption of manufactured goods to the extent that they do at present. We have an economy which depends, as does that of every developed country, on our consuming 2 per cent. or 3 per cent. more each year in order to maintain full employment. We have had many benefits from this system. As long as the world's resources seemed unlimited, that was fine. But our world's resources are finite. The world's population is growing and the demand on those resources is growing. With a rising population and fixed world resources we cannot indefinitely continue to consume 2 or 3 per cent. more per head per year and it is an inevitable feature of membership of the Common Market that the advantage in the economy will lie in manufactured goods rather than in the provision of services.
  The only argument I have heard advanced against the proposition that we

  1173
  cannot continue to consume more indefinitely, was advanced by Professor Beckerman who asked why we should make sacrifices for the sake of future generations. That viewpoint is held by some, but few who seriously consider the matter can dispute that we are on the way to inevitable disaster, when the resources of the world will no longer sustain the expenditure and extravagance of the present time.
  Membership of Europe will inevitably make it more difficult for us to change direction. The main economic advantage at present lies in the existence of a large market for mass-produced goods, and there is consequently an inevitable relative disadvantage for the provision of services, whether they are private services —ranging from the repair of shoes to motor cars—or public services like housing and public transport.
  We can continue to have full employment, growth in the gross national product and steadily improving public services in spite of the problems of resource and energy supply, but it requires a deliberate shift in the emphasis of the economy towards forms of consumption that use less resources and more labour-intensive means of production. EEC membership is tilting us the other way. Irrespective of membership of the Community we have to take some drastic steps to correct the alarming state of our economy. We are living at 105 per cent. of our real national income. If we compare the situation from 1968–71 with that of 1974 we find that in the earlier period we were spending 11 per cent. of our real national income on private investment, 26 per cent. on public expenditure and 62 per cent. on private consumption—a total of 99 per cent. In 1974 we spent 11 per cent. on private investment, 27 per cent. on public expenditure and 66·8 per cent.—an increase of nearly 5 per cent.—on private consumption—a total of 105 per cent. I am taking my figures from the Review of Britain's Economic Prospects published by the University of Cambridge.
  Perhaps if we stay in the Market we can go on borrowing enough to finance that deficit until North Sea oil comes to our rescue, although by then we shall be owing so much that we may have been forced to sell so many of our assets that
  1174
  the oil will come too late to rescue our economy. I accept the argument that the only safe and tolerable way to overcome our economic difficulties lies in some form of selective import controls coupled with increases in taxation to finance improved public services. That, however, would not be practicable within the EEC.
  We can live tolerably within our income, reduce our demands on the world resources that the developing countries need much more than we do, maintain full employment and improve the public services which have been starved for so long. But we cannot do that within the Community—or, indeed, outside—unless we are prepared to accept some measure of austerity.
  I do not relish the prospect of austerity. I am as self-indulgent as the next man, perhaps more so. However, I feel that it is our duty to recognise that even a relatively bleak immediate short-term future is preferable to continuing on a course which leaves a large part of the world hungry and in which we ourselves face ultimate disaster through using up the resources on which we all ultimately depend. We should therefore withdraw from the Common Market.
  11.10 p.m.
  Mr. Churchill (Stretford): The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) will not expect me to support his recipe of not only withdrawing from the European Economic Community but, it would appear, declaring war on the GATT countries by setting up import restrictions once outside EEC.
  In opening the debate, the Prime Minister was at pains to square the renegotiated terms with the Labour Party's manifesto. In case he is under any misapprehension on that score, he should be told that the nation does not give a fig for the Labour Party manifesto. What concerns the British people is whether the terms are in the national interest. It is on that issue that they will decide their vote in the forthcoming referendum.
  None the less, recalling the days of the Prime Minister's former enthusiasm for Europe, those brave days of 1967 when "We shall not take no for an answer" was his catch phrase, we on this side of the House welcome his re-conversion to the European cause. The right hon. Gentleman now avows his

  1175
  belief and the Government's belief—or most of the Government's belief—that Britain's future lies in playing its full part in Europe. Yet at the same time he says that the Government will be bound by a "No vote in the referendum, even by a small majority on a low poll. How can any responsible political party, let alone the Prime Minister of Britain, knowing full well where Britain's economic, industrial, political and defence interests lie, accept such a proposition? It is not a referendum that we are being put to. It is a lottery. The Labour Government are gambling with the nation's future. If the result is our pulling out of the EEC, they will have a grave and abiding responsibility for the consequences.
  The British people are being asked to breach an international treaty solemnly entered into, approved by Parliament by the overwhelming majority of 112, and likely to be endorsed by an even larger majority at the end of the debate tomorrow night. As a believer in parliamentary democracy, I believe that it is tomorrow night's vote that is of consequence, and certainly the only one that can bind this House.
  If the Labour Government are so keen to consult the British people on their opinion through the ballot box, they have available the traditional constitutional method: let them call a General Election. The people are being asked to divorce themselves from a market of 260 million people, accounting for 40 per cent. of world trade, and to go out into the cold—and it is very cold outside. One has only to see the pressure that is already being put on Lancashire textiles, even within the EEC, by imports from Hong Kong, Taiwan and Japan. Outside we should face colossal pressures not only in the textile industries but in the radio, television, motor cycle and motor car industries. We should face ruthless competition, which we are far better placed to withstand within EEC, the largest economic unit in the world.
  In addition, in the North-West region alone some 300,000 jobs are directly or indirectly dependent on exports to the EEC. Inevitably the prospects for them would be bleak if we were once again to interpose a tariff barrier between us and our single most important export market.
  1176
  More important than the economic aspect of Britain's membership has been, and always will be, the political aspect. What is at stake is nothing less than the survival of democracy in Britain as we know it. This was the theme of the powerful and evocative speech of the hon. Member for Birmingham, Ladywood (Mr. Walden). It is no coincidence that of all the national parties, of the United Kingdom only the Communist Party and the National Front are opposing British membership. On the other side are ranged the three major democratic parties, the social-democratic Labour Party, the Conservative Party and the Liberal Party.
  Mr. Richard Body: Are not the Maoists and half the Trotskyists in that category too?
  Mr. Churchill: It depends on what my hon. Friend means by Maoists. Certainly Premier Chou En Lai a couple of years ago in Peking told me: "Please on no account assume that the so-called Maoists in Britain bear any relationship to our form of Maoism". The Chinese Communists are strong in support of our membership of the Community, because they fear the expansionism of the Soviet Union.
  Why does the Communist Party in Britain so strongly oppose Britain's membership? There is one reason only: it believes that if Britain remains in the Community it will strengthen free enterprise, it will make the British people more prosperous and it will strengthen democracy—all of which will make the possibility of a Communist take-over in Britain more remote.
  But why, one may ask, does the Trades Union Congress line itself up against the Labour Government, and against the basic interests of the British working people? That is a rather stranger and sadder state of affairs. The TUC knows the benefits that have accrued to the working people of the EEC countries with their higher living standards. Yet it wants for the British working people the poor living standards of the Comecon countries, rather than the prosperity of the EEC countries.
  There are others for whose view I have the greatest respect although I do not share it, who fear a supposed loss of

  1177
  sovereignty to Brussels for more respectable reasons than some of their bedfellows in this anti-Europe campaign. They are rightly jealous of the powers of this Parliament. But I feel sure my hon. Friend the Member for Banbury (Mr. Marten) will not take it amiss if I say that their case would be even more respectable if they did not at the same time support the anti-parliamentary device of a referendum, which is infinitely more subversive of the sovereignty of Parliament than anything contained in the Treaty of Rome.
  Where is the sovereignty of Britain today? The hon. Member for Mitcham and Morden pointed out that the Finance Minister of any one of four Arab countries could, with a single telephone call, bankrupt the British banking system overnight and collapse sterling. Is that sovereignty? We see the Soviets building as many tanks every two and a half months as Britain deploys altogether. How long can we maintain our sovereignty in the face of that military build-up?
  The choice, as my right hon. Friend the Member for Farnham put it so well, is between the shadow or the substance of sovereignty; of the two it is the latter that is important. Not only is the economic hurricane upon us, but now we have the political hurricane. The Western democracies are being relentlessly challenged by the advance of Communist forces—backed by the Soviet Union—in South-East Asia and more gravely, in a NATO country, Portugal. We see powerful antidemocratic forces even within our own shores. At the same time we are witnessing the retreat of the United States from her world rôle and her commitments to her allies.
  Can we not see the writing on the wall? Can we not see that if the democracies of Western Europe do not speedily come together to forge a far greater union than has been achieved so far, our countries will not long survive as independent democratic States? Valuable time has already been wasted. I am convinced that the interests of the British people demand a resounding "Yes" vote in the referendum, so that, with the other eight democracies within the EEC, we can get on with the task of building not only a powerful economic base for the prosperity and welfare of our people but a bastion
  1178
  of democracy and a bulwark of freedom —a moral, spiritual and real force in the world dedicated to securing the prosperity, the freedom and the peace not only of the peoples of Western Europe but of mankind.
  11.21 p.m.
  Mrs. Millie Miller: The hon. Member for Stretford (Mr. Churchill), in a highly emotive speech, displayed a remarkable knowledge of extremist parties both in this country and abroad, and gave the impression that the only democratic societies in Europe are the Nine, as if there were no other democratic States within Europe with whom we have other kinds of allegiance and with whom we carry out, as we did for years before we entered the EEC, a wide variety of treaties.
  I start from a different standpoint—surprisingly, perhaps, that of the Leader of the Opposition, who reminded us at the end of the Prime Minister's statement a couple of weeks ago that not a dot or comma of the Treaty of Rome had been changed in the renegotiation. Much as I have welcomed the Government's efforts in this direction, there can be no doubt that for those of us who are concerned about certain aspects of the original treaty—not least the common agricultural policy—that it is a stumbling block which is difficult to overcome.
  When I intervened many hours ago in the remarkable speech of my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden), I referred to the condition of Italy. My hon. Friend may have thought that I was going to refer to the wine lake. But I was not going to quote from Il Tempo of Rome, which on Sunday this week talked of Europe drowning in a lake of wine. I was not going to say that the lake was so extensive that every citizen of the Community, down to babes in arms, could have 123 pints before it was exhausted. I was not going to say that the worst affected area of Italy in this connection is Sicily, which is already the poorest area of the poorest State of the EEC. I was not going to quote that article at all.
  I intend to talk about another article, in Il Messagero di Roma which last week said that a knockout blow by the EEC vas being made against Italy. It was in connection with two entirely different aspects of EEC policy.

  1179
  This is a middle-of-the-road journal. It is nowhere near as extreme as the Communist Party or the National Front, with which hon. Members opposite are so conversant. The journal said that a double body blow is being prepared in Brussels for Italian agriculture already hit in its one key product— to which I have referred, namely, wine— and for Italy's industry.
  For months past the frontiers of the EEC have been closed to livestock imports from third countries. This may sound highly desirable in view of the mountains of beef which are building up in the refrigerated stores of some EEC countries. The action of closing frontiers is likely to have a devastating effect on Italy's industry. Italy depends on importing livestock from non-EEC countries and is able to exchange its agricultural products for them.
  The journal makes the point that, since the policy of not allowing livestock imports was implemented, many countries outside the Community— Yugoslavia, Poland, the South American States— have been pressing their claim for the doors to be opened again. The difficulty is that, because Italy is not able to import livestock, it is unable to increase its herds and so is being deprived of an agricultural market which in its turn can provide it with an export market for its industrial goods.
  The sales of frozen meat to destinations outside the Community would be financed by a Community fund to which Italy itself is contributing. So Italy is contributing to the destruction of its own agriculture and other industry.
  The article says that the effect of the turning of the knife would be twofold— on one side, no industrial-agricultural exchanges by Italy with extra-Community countries and, on the other side, the collapse of prices of domestic livestock and the last rites for Italy's livestock industry. So certain— the article says— is the feeling within the other EEC countries that this torpedo will be launched that some of the major Italian companies have been approached by powerful French and German middlemen offering to sell them future beef import rights against the payment of
  1180
  large sums. About 20p per pound has been suggested.
  The frightening thing about this is that, although we have been told time and time again that no decisions are taken in the EEC except with the consent of Ministers, this is a decision which can be taken within the Agriculture Commission by a simple majority vote and it will never be put to the Ministers.
  The House may wonder why I dwell on the Italian situation. I do so because Italy was one of the founder members of the EEC and if all the claims about the advantages of membership of the EEC had been justified, surly by now Italy's position would have been built up to such an extent that it would be on equal terms with its EEC partners. Alas, this is not so, and today politically Italy is on the brink. If hon. Members opposite are concerned about extremism, let them be concerned about the potential extremism in Italy, which to some extent arises as a result of the very actions of the EEC which are being commended to us.
  We are told constantly of the benefits of EEC membership and that there are no acceptable alternatives to the EEC. I remember very clearly a few weeks ago when my right hon. Friend the Foreign Secretary returned from a visit to overseas countries he told us of the great prosperity being enjoyed in one country which which we have close links. He was referring to Nigeria which is benefiting tremendously from its oil market. A recent article in The Times said that there were new opportunities for British firms to profit from Nigeria's oil bonanza, and these were the words used by my right hon. Friend. I believe that our future lies not in EEC partnerships, not in taking in one another's washing, not in selling one another's industrial goods, but in looking outwards and entering into wider and wider free trade relationships with developing and developed countries.
  I want, finally, to mention briefly one other aspect of international affairs which has hardly been touched on in this or any other debate in the House, and that is the existence, which I discovered for the first time today, of the Economic Commission for Europe, which is part of ECOSOC, which is studying, helping and

  1181
  guiding not the Eight, not the Nine, not the Seven, not the smaller units of Europe, but no fewer than 33 different States, from the United States to Soviet Russia, and all the States in between except Switzerland, on almost all the subjects about which hon. Member have spoken today.
  If we believe in internationalism— and I think that those who are opposed to the narrow concept of the Market believe in it far more than do those who are advocating this kind of relationship— let us look further afield. Let us find our internationalism across the borders, across the cold war. Let us stop looking for "Reds under the beds" at every opportunity. For each Red under the bed one can find a Black Power character in the cupboard. Fascists are no less a danger to the survival of democracy than are Communists, and Opposition Members should not forget that.
  There are opportunities for this country to go ahead. We are going through hard times within or without the European Community, but let us not be misled into thinking that this rich man's club which does not even protect its own future is the answer all the world over or for other parts of Europe.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. George Thomas): Order. I am grateful for the way in which hon. Members have responded to Mr. Speaker's appeal. There are four or five Members who still wish to speak, and 26 minutes left for today's debate. If they could rush through their speeches in six or seven minutes that would help.
  11.33 p.m.
  Mr. Richard Body: I thought that when the hon. Lady the Member for Ilford, North (Mrs. Miller) touched on Italy she would remind my hon. Friends behind me that in that country the Communist Party roots fervently for the Common Market, that one of the facts it tends to dwell upon is that the Communist Party is the party in the Common Market with the largest individual membership and that it looks forward to the day when there is a Communist EEC.
  1182
  When the hon. Lady referred to Fascists, she might have reminded the House that in that catalogue of supporters of the EEC there is the Fascist Party of this country and the Mosleyite movement.
  I am a frustrated European. I have always tried to bring myself to support the principle of the European Community, and I got as far as voting for our application to join in May 1967. It seems almost common sense that the countries of Europe should work together and, indeed, that neighbouring countries round the world have so much to do together.
  One recognises— I think we all must— that the Governments of nation States find their actions limited, and there is a growing list of functions which they cannot adequately cope with by themselves. Finance is one example, and pollution is another, and when one comes to trade it seems only too obvious that the barriers to trade should be brought down. No one argues— certainly no anti-Marketeer that I know argues— that we should have some kind of fortress Britain pulling up the drawbridges against the rest of the world. I regret very much the suggestion by some, although I am glad to say that the Paymaster-General did not suggest it tonight, that this is any part of our case now.
  Surely there should be no dispute about the need for neighbouring countries to work together. The argument should be about how they should cooperate. The Treaty of Rome sets out just one way towards international cooperation. Supporters of the EEC assert, by implication if not explicitly, that it is the only way forward to European unity. Yet the Treaty of Rome is essentially a federalist charter. The Paymaster-General may not like that, and he suggested tonight that he was not a federalist, but I am sure he would not quibble about the use of that word.
  We are confronted in the Treaty of Rome with the setting up of supranational institutions, and an ever-growing number of our laws will be made by these institutions, the European Parliament eventually, at present the European Council of Ministers, and the Commission of the EEC itself, but also the European Court of Justice, because that is now the supreme court of this country. As

  1183
  long as we are members of the European Community, that court has the power to change our laws, because it acts quite differently from our own courts of law. Our own courts will interpret strictly the law as the European Court of Justice interprets the spirit of the law and in that way develops and changes the law of the Community.
  None of us can have any doubt that the European Community will try to make itself more democratic but, try as it will, I do not believe that it can ever succeed. That is why I cannot bring myself to agree to membership of the European Community.
  I believe that 250 million people in one political entity is too much for democracy to thrive. The form of democracy may come about, but democracy can exist only when the citizens feel that they can influence the decisions that affect their everyday lives. Once that feeling is lost, democracy cannot endure. It must break down. History is full of examples of when that has happened.
  In a political entity of 250 million, a minority may consist of many millions. Their interests, values and habits of life can be swamped by the legitimate process of government. Yet can there be any true democracy when such interests as those of minorities cannot be safeguarded?
  We have learnt in this country that totalitarianism is the concentration of power in the hands of a few and that democracy is the diffusion of power. Federalism will take away power from where we have now learnt to diffuse it in our own country and will place it instead in federal institutions, and over them the ordinary people will feel that they have less and less influence. Perhaps in every other respect we will have good government from the federal body, but even so I would prefer the words of John Stuart Mill: "A good government is no substitute for self-government".
  It has been asserted in the debate that the onus of proof from now on is on those who are in favour of withdrawal. I would put it in another way. If we are concerned with democracy, the onus is on those who want us to stay in to prove that this new creation that must evolve if it is to progress towards a super-State will be democratic. It is because I feel convinced that it can never be democratic
  1184
  that I cannot support it, and for that reason I am a frustrated European.
  11.40 p.m.
  Mr. Peter Temple-Morris: My hon. Friend the Member for Boston with Holland (Mr. Body) knows how profoundly I disagree with his views on this issue, much as I respect them. We have different concepts of sovereignty and disagreement about what is true sovereignty. I contend that democracy can survive in Europe and that by combining with Europe we have a better chance of survival.
  It is often said that rather than our form of democracy being the most potenitally long-standing and viable, that of the United States is at present the most valuable in the world, with its democratic base, its freedom base, and its 200 million people and all the compromises that involves. My hon. Friend will forgive me if I do not follow his arguments further.
  I am profoundly sad that we are debating a decision which in essence stands parliamentary sovereignty on its head. It is a decision which the House took— although I was not here at the time— in October 1971 with a large majority based on both sides of the House. There followed a treaty and two years and some months of membership. Yet here we are talking about it again. We run all the fearful risks which the policies which have brought us to this unhappy state involve. However, there are redeeming features. I was pleased to hear the arguments which were so ably deployed by the Paymaster-General. The very conviction with which he deployed those arguments may tend to make people outside the House more perplexed about why we are talking about this subject.
  What has brought us here is confusing not only to the British people but to people within Europe. They have been extremely charitable in the renegotiation. Even now, many of them are walking around muzzled and afraid to say anything, for example, about the cases that might go before the European Court for fear of upsetting the results of the British referendum, because they want us to stay in. They want us in now and have always wanted us in because they feel we have something to contribute to democracy. Italy, I would say to the hon. Member for Ilford, North (Mrs. Miller), has always

  1185
  supported us with that in mind throughout the various negotiations with the Common Market. Europe wants us in and is surprised to see what is going on. In a nutshell, we have lost a lot of political capital. If the referendum, happily, goes the right way and we stay within Europe it will be a long time before we again build up the political self-respect which we could have had if none of this had happened.
  I wish to refer to defence, which has been touched on by one or two hon. Members, but I will not go into it in detail. When I see what has happened in South-East Asia and the retreat which is taking place within America, with its own morale badly shattered by recent events, I am even more convinced that as the years go on Europe's defence will be conducted by Europe. I know that NATO has been advanced in this debate as being the automatic defence of Europe, but I believe that in future Europe's defence will increasingly be a matter for Europe. I believe that we shall have no say in that defence if we stay out of the Common Market.
  Anyone who has any doubts about that must take note of a recent poll that was conducted within America. I do not know how substantive it was but it was conducted over all the states of America. It came out with the conclusion that the Americans would stand and fight only if Canada was invaded. Perhaps that is mirrored by the urgency with which the Foreign Secretary has requested a NATO meeting following what has happened as regards American policy in South-East Asia.
  Next, I make a quick point about the Middle East and the oil-producing countries and the situation if the referendum goes the wrong way. The Paymaster-General knows very well that we are existing to no small extent upon foreign money that at present rests in this country. I wonder how long that money will remain here if the country does not vote for Europe in the referendum. I am talking about a part of the world that is expanding and which can use our technology and everything that we have to contribute to its expansion. It can use what we can contribute in a way which need not involve the hectic competition
  1186
  between the European countries that we are witnessing at present. Encouragement could be given to all the oil-producing countries by Common Market participation in a more unified way. Let us remember that, compete with each other as we may, America, with its unity and power, walks off with very much more in each and every instance.
  That completes a rather abbreviated version of what I had to say. I urge the country very much to vote in favour of remaining in Europe when the referendum comes.
  11.48 p.m.
  Mr. Percy Grieve: I thank my hon. Friend the Member for Leominster (Mr. Temple-Morris) for abbreviating his speech. It is with no pleasure that I rise to support the motion. I am and always have been a convinced protagonist of our adhesion to the European Community. I believe that we have no future outside it. The economic arguments which have been deployed tonight— in particular by the Paymaster-General and the hon. Member for Birmingham, Ladywood (Mr. Walden)— have been utterly convincing. None the less, we should not be having this debate and the country should not be facing a referendum. The fact is that we are having the debate and we are facing a referendum to save the unity of the Labour Party and not for the good of the country.
  It is a sad thing that this matter should have been revived in this way when Parliament and the Crown had acceded to a treaty which had been ratified by Parliament after prolonged negotiations Our friends in Europe believed that we were members of the Community, that we were there as their brothers and that we were to be treated as members of the Community, drawing the advantages of the Community. It is an astonishing tribute to the strength with which our friends in Europe believe that we should be in the Community that they have not turned against us. That attitude is a tribute to their desire that we should be with them.
  Last week I was in Paris and Rome. I found that it was the clear desire of our friends in Europe that this referendum should turn out to be successful. But we should never have had a referendum. The Prime Minister has gambled with our

  1187
  country's future in Europe for the sake of the unity of his own party. In the process he has destroyed the doctrine of collective responsibility of Cabinet Government, and it is difficult to foresee the many ill effects which may flow from what has happened.
  I shall campaign earnestly for success in the referendum that is upon us. One of the principal reasons why I shall do so —and why I believe the country will return a resounding "Yes" vote—lies in the fact that I believe the United Kingdom will be dishonoured if, after a treaty has been solemnly entered into, we resile from it and seek to find a way out. We shall face economic ruin, the Arabs will seek to withdraw their money from this country, and we shall be dishonoured. How in those circumstances will anybody trust us? Certainly nobody will trust us if we seek to enter into treaties anywhere else to get out of our economic difficulties. That is the bleak future which faces this country. It is on that future that the Prime Minister has gambled—and in the process it can hardly be said that he has saved the unity of the Labour Party.
  I promised to be brief and I conclude by saying that these are the arguments which I shall put in the country and in my constituency in the referendum campaign.
  11.51 p.m.
  Mr. Michael Shersby: In the remaining nine minutes of debate, I shall seek to say a few words on the question of access to food supplies, which I believe to be one of the most crucial items in our membership of the EEC. Few of us in the House tonight will have thought of the possibility of shortages of some foods in Britain in peacetime—a situation unknown in a period of 150 years. That is what may happen if we leave the EEC, where we now have a prior claim to our share of the production of our partners. Only about 55 per cent. of the food eaten in the United Kingdom is home-produced. The importation of the balance has not until recent years presented a real problem since our growing wealth has more than kept pace with the increase in population and the expected improvement in living standards. Additionally, until the Second World War we had priority of access to food supplies from the Dominions and Colonies. Accordingly,
  1188
  we grew accustomed to shopping for the national larder with money in our pockets and to buying other people's surpluses in privileged conditions.
  Circumstances today are very different. We have a continuing balance of payments deficit, our relationship with our former overseas territories has completely changed, and world food surpluses—which have never existed in a real sense since millions of people die of starvation and malnutrition each year—have disappeared. World reserves of wheat have been reduced to 6½ per cent. of production in 1974–75 compared with a figure of 23 per cent. in 1969–70. A series of bad harvests, rapidly increasing world population and growing food consumption in former exporting countries, have led to a position where there is little, if any, cheap food left in the world. We are now shopping with an overdrawn bank account, in a short-supply situation, and without priority access to our former suppliers, who as the recent sugar crisis so clearly demonstrated, now sell to the highest bidder.
  In this new scene our membership of the Community has already been of great value in protecting us from abnormally high prices. A total of 59 per cent. of our meat and 53 per cent. of our cereals now come from the Community compared with 46 per cent. and 19 per cent. respectively in 1970. It is, however, to assure our food supplies in the future, both short-term and potentially long-term, that our continuing membership of the Community is essential.
  In the 1975 price review the Government gave estimates of United Kingdom self-sufficiency in various major food products. If these are compared with the average of the latest figures available from the Community they show that the Community is over 90 per cent. self-sufficient in 15 out of 20 main commodities, whereas the United Kingdom reaches this figure for only six out of 20. There is not one product in respect of which our self-sufficiency rating is better than that of the Community, and only four—milk. oats, potatoes and eggs—in which it is level with that of the Community. It is therefore evident that staying in the Community will assure us of priority access to its food production, which will

  1189
  go a long way towards supplying our needs.
  Outside the Community we shall be in a queue with the rest of the world and with no advantages or rights to priority for Community surpluses. There would therefore be no question of a return to the Commonwealth preference system. Our major Commonwealth partners have already stated that they wish us to stay in the Community. They are unlikely to help us if we leave. Let us not forget that 46 developing countries by their signature to the Lomé Convention in February, agreed to grant the Community most favoured nation treatment in return for a guarantee of free access to the Community for 94 per cent. of their exports of agricultural products, which will have preference over exports from third countries.
  I am therefore certain that to maintain present levels of world food consumption, which are only too often tragically inadequate in some countries, food supplies must double by the end of the century. How can it possibly be advocated that the United Kingdom, with its high proportion of food imports, should deliberately exclude itself from a Community which can assure us that our needs will be supplied?
  For those reasons, if for no other, I believe that it is in the intrests of our country to remain in the Community. For that reason I shall vote for the recommendation tomorrow night.
  Mr. Deputy Speaker: I thank hon. Members who have co-operated so well to enable everyone who wished to speak to do so.
  Debate adjourned.—[Mr. Walter Harrison.]
  Debate to be resumed tomorrow.

  PUBLIC ACCOUNTS
  Ordered
  That, notwithstanding the Order of the House on 18th December relating to nomination of members of the Committee of Public Accounts, Mr. John Moore be discharged from the Committee and Sir Timothy Kitson be added to the Committee for the remainder of this Parliament:
  That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

  NATIONALISED INDUSTRIES
  Ordered
  That the Order of the House of 15th November relating to the membership of the Select Committee on Nationalised Industries be amended by leaving out the word 'Thirteen' and inserting the word 'Fifteen' instead thereof.—[Mr. Walter Harrison.]
  Ordered
  That Mr. Michael Marshall and Mr. Mike Thomas be members of the Select Committee on Nationalised Industries:
  That the members of the Select Committee on Nationalised Industries nominated this day shall continue to be members of the Committee for the remainder of this Parliament.
  That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

  VIOLENCE IN MARRIAGE
  Ordered
  That the Select Committee on Violence in Marriage have power to appoint persons with expert knowledge for the purpose of particular enquiires, either to supply information which is not readily available or to elucidate matters of complexity within the Committee's order of reference.—[Mr. Walter Harrison.]

  ADJOURNMENT
  Motion made, and Question proposed,That this House do now adjourn.—[Mr. Thomas Cox.]

  HOSPITAL SERVICE (CHESTER)
  11.58 p.m.
  Mr. Peter Morrison: It is depressing from my point of view that the Minister is not present. However, I am most grateful to you, Mr. Deputy Speaker, and to Mr. Speaker, for allowing me to raise a matter, about which I am most concerned, regarding the hospital situation in my constituency in the City of Chester.
  I raise this matter on a totally nonparty political basis. I do so out of a genuine concern at the present situation in the hospitals in my constituency. I shall endeavour to convey that concern to the Minister, who I am now glad to welcome. I appreciate the difficulties under which the Minister is working at the moment. I know that the cash which

  1191
  his Department is able to dispense is limited severely, and I have read reports of what the Minister of State said at the weekend in the course of a speech to hospital administrators when he identified how difficult it was for him to have extra cash to spend. However, I hope that when the Minister has heard what I have to say, he will put Chester and its hospitals at the top of his list of priorities or at least near the top.
  My reason for wanting to raise this matter on the Adjournment is born out of a genuine concern for all those involved in the medical profession and for the health of my constituents and others living near my constituency.
  First, as regards the patients, I do not want to alarm the Minister, because I have had no serious complaints, but, if the present situation is allowed to continue for much longer I know that I shall start getting letters from patients or potential patients who have to go into hospitals.
  Secondly, the area health authority is definitely worried by the situation. It has done a tremendous job under reorganisation, and I for one am filled with admiration for its work.
  Thirdly, there are the consultants, doctors and nurses. All of them want to give of their best to those who are sick and have to go to hospital. They want to provide the best possible service. They feel that, if nothing is done in the very near future in the hospital situation, the service which they provide is bound to suffer.
  The problem is twofold. First, the hospitals in the City of Chester simply do not have enough beds. We are a growing area in terms of population, and we provide hospital services not just for those in and around Chester but also for those in the Deeside area as well. The reason why we do not have sufficient beds is that Chester is part of a regional health authority area which includes Liverpool. Liverpool is over-bedded. The Department tends to look at the region as a whole and to say that we have enough beds. That is true in terms of Liverpool, but it is not in terms of Chester, and therefore we need a compensating factor because we lose by being a small area in a large region.
  1192
  The second and more important problem is that Chester's hospitals are antiquated. Money has not been spent on them as it should have been. They do not have the necessary equipment or the room to provide the right sort of service. All would be solved were the proposed district general hospital to be completed.
  Plans for the new district general hospital have been discussed for well over 10 years now. It was in 1962 that agreement was reached in principle that the new district general hospital should be built. A lot of man hours have been put into these plans, and they have in-architects' fees, surveyors' fees, all the volved a great deal of money in terms of civil servants, and so on. But it is not just a matter of money. There has been exceptionally hard work and devotion towards this new concept of a district general hospital, so much so that, were it never to be finished, there would be genuine disappointment amongst a great many people who really care about the health of my constituents and others who live near my constituency.
  The first phase, the maternity unit, is now completed and is working well. I have seen it for myself. I have no doubt that all those who go there are grateful for the services which are provided.
  The second phase, which concerns other aspects of medical life, has been put back continually. I must tell the Minister as he was not in his place when I started my speech, that I raise this matter in a nonparty political sense, because the second phase was put back by the Conservative Government. I accept the reasons for the decision and the difficulties in which the hon. Gentleman finds himself regarding the second phase. But the net effect of not building the second phase of the new district general hospital is that the first phase, the maternity unit, operates under difficulties in isolation, as it now is, because it is dependent upon the completion of the second phase for some of the services which it intends to provide.
  As long as the second phase is not built, the morale of the medical profession—doctors, consultants and nurses—will be very low. Some of those doctors and consultants went to Chester because they were assured by successive Governments, both Conservative and Labour, that the new district general hospital

  1193
  would be built. Therefore, not surprisingly, morale is low.
  Morale is also low amongst the administrators, because they have worked on the second phase for a long time and want to see what they have built in their minds completed.
  Perhaps the most important net effect is that the existing hospitals have to cope with a situation with which they are no longer equipped to deal, because successive Governments, through good housekeeping, have not spent money where normally they might have spent it as they realised that it would be a waste of taxpayers' money given that a new district general hospital was to be built to replace the old hospitals. Therefore, as the old hospitals are still battling on and providing services and as no money has been spent on them, something must now be done.
  The area health authority is just as concerned as I am. It is so concerned that it has prepared a list of priorities where money has to be spent on existing hospitals. The authority has prepared a list of schemes which are vital to keep the services operating. Even if the Minister were to announce tonight, which we all hope he will, that the Department is willing to go ahead tomorrow with the new district general hospital, that money would still have to be spent on the existing hospitals because it would be eight years or more before the new district general hospital could be completed.
  In case the Minister should think that I am talking from the textbook or that I am being fed with information, I hasten to assure him that I am not. I am a layman. I do not profess to understand everything about hospitals, but I have seen and considered the problems on several occasions. The schemes on which I think that money should be spent are matters about which I feel strongly having seen them for myself.
  The Minister will no doubt recall that the Chester Royal Infirmary building dates back to 1756. Therefore, the hon. Gentleman will understand that it is antiquated, to say the least, and difficult to convert. The first major scheme which needs to be dealt with in the Chester Royal Infirmary is the upgrading of the main operating suites. Not being a doctor,
  1194
  I do not pretend to understand what an operating suite should look like, but I have seen it and I am assured that in some respects at least it is no better than a field operating suite of the Second World War.
  The second major scheme in the Chester Royal Infirmary where money needs to be spent is in terms of the extension and adaptation of the X-ray department. I am told—indeed, I have seen for myself—that the toilet facilities and changing area facilities are such that patients are really quite incapable of having any privacy of any sort, despite the fact—and this is the sadness—that a certain amount of money has already been spent on these facilities. Those are the two schemes concerning Chester Royal Infirmary.
  The Minister probably knows that Chester City Hospital is an old workhouse. Here, again, I expect that it is difficult to convert, but, given the need to provide these services, something must be done. Here it is absolutely essential that two wards—Wards 19 and 21—should be upgraded. These were the old maternity wards, before the new maternity unit in the district general hospital was built. I have seen them. They really are not in a fit state for patients.
  Then there is the upgrading or, indeed, the replacement of the pathology laboratory. The Minister probably knows much more about pathology laboratories than I do. However, unless we have effective pathology laboratories in Chester the health and, indeed, the very survival of some of my constituents may be at stake.
  Finally, in relation to the really desperately necessary schemes which must materialise, I come to isolation facilities. We do not have them at present in Chester. Sick infants have to come from 30 or 40 miles away, perhaps from a farm in the middle of Cheshire where the disease which the infants may have is not diagnosed, and when they arrive at the Chester City Hospital or the Royal Infirmary they are diagnosed as isolation cases. They cannot stay there. They must move on to another hospital perhaps some 10 or more miles away. When that happens the Minister will know as well as I do that there is a real chance that a child may not live.
  I should like to repeat how much I appreciate the fact that the Minister is in

  1195
  great difficulties. I would not want him to feel that he must reply in any detail tonight. That would be asking much too much from him. However, I should like him to answer the following questions in principle.
  First, will he give the go-ahead for the new district general hospital? Secondly, if he will not, is he prepared to spend money on up-dating the old hospitals, given that that money would have been spent in the normal course of events had there been no plans for a new district general hospital? Thirdly, if he will spend money on the old hospitals, will he give an assurance that despite that money being spent, the commencing date of the building of the phase 2 of the new district general hospital will not be put back in any way at all?
  Finally, in case the Minister should think that I am exaggerating the case—it may be that I am, because I am a layman and it may be that I get rather "uptight" about the worries and concerns of my constituents; but I do not think that I do—I ask him on behalf of my constituents to come and see for himself. I am sure that were he to do so he would have no doubt that the money I am asking him to spend would be well spent.
  12.15 a.m.
  The Under-Secretary of State for Health and Social Security (Mr. Alec Jones): I say at the outset that I certainly appreciate the concern that the hon, Member for the City of Chester (Mr. Morrison) has shown not only tonight but in the lengthy correspondence he has had with my Department and the long series of Questions he has put down on this matter. I can assure him that my Department and I are very much aware of the needs of the Chester area on the provision of hospitals.
  Nothing depresses me more than to listen to hon. Members outline the defects in individual hospitals or in hospital services. Nothing would please me more than to be able to say to the hon. Member "Here is the pot of gold—spend it as you wish to meet the needs in Chester now". But that is not possible in the economic situation in which we find ourselves.
  Tonight's debate certainly marks the latest move of the hon. Gentleman in his campaign for improving all the Chester hospitals—a campaign which the hon.
  1196
  Gentleman took up almost immediately he took his seat in the House in February 1974. He has frequently attended meetings of the hospital staff, and I know of the many occasions on which he has raised Questions with my right hon. Friend about problems which face his area. I can assure him, therefore, that we are aware of the need for improved hospital facilities in Chester, and this awareness is on the part not only of the Department but of the Mersey Regional Health Authority and the Cheshire Area Health Authority.
  The hon. Gentleman's main concern has been with the development of the second phase of the West Cheshire General Hospital. He referred to the 10 years' of planning in this matter so I shall say a few words on that aspect. The former Liverpool Regional Hospital Board commenced planning the new district general hospital—the West Cheshire—to serve the Chester area, in 1964. The first phase consisted of the maternity department which was opened in 1971. I was pleased that the hon. Gentleman emphasised how well this aspect of the development was now working.
  Plans for the second phase, to contain 413 "acute" beds, were submitted to the Department in 1969. I understand that protracted discussions took place then on the design and cost of the scheme. This was aimed at ensuring that the planning and design of the hospital would produce modern facilities which could he built swiftly and economically. These discussions may have appeared to some to have unnecessarily delayed the start of the scheme, there were a number of features in the design of which, based on experience gained elsewhere, the Department's professional officers were critical. In particular they were concerned that the whole phase to be built as a single contract was estimated to cost about £9 million, at prices ruling in 1973. From experience elsewhere single contracts of such a size have been found to be very vulnerable to delay and to cost variations and the hospital authorities, therefore, examined the possibility of splitting the design into smaller self-contained phases. It was when this planning had almost been completed that the new regional health authority had to reappraise its whole capital programme in the face of the stringent cuts in capital

  1197
  allocations to health authorities announced by the previous Government in November 1973.
  The Mersey Regional Health Authority took over from the former Liverpool and Manchester Regional Hospital Boards and the Cheshire County Council repsonsibilities for health services in Cheshire on 1st April 1974. The authority had even before this date been reconsidering the capital programmes it inherited from the former authorities in the light of what it could afford to continue with in the light of the reduced capital available to the region.
  It came to the conclusion that, in view of the general need for capital improvements in the region as a whole, it could not justify the concentration of the large proportion of its resources which the Chester project would pre-empt in a single health district. It therefore decided, with the greatest reluctance, that planning on the West Cheshire District General Hospital, and a similar project at Macclesfield should be suspended, but that in the meantime urgent consideration should be given to what interim schemes could be undertaken at Chester hospitals so as to relieve the greatest difficulties that were being met.
  This decision by the regional health authority must be considered against the background of the provision for health services in the Mersey region as a whole. The authority is responsible for the health needs of a population of over 2½ million in the Merseyside Metropolitan County and the County of Cheshire. The population of the Chester health district makes up less than one-tenth of this figure. The region includes two expanding new towns at Warrington and Runcorn, whose populations are expected to increase by about 70,000 and 100,000, respectively, over the next five to 10 years, in addition to a substantial programme of urban renewal taking place in Liverpool. All of these developments result in a move of population away from the areas well served by the old hospitals and open up a need for new facilities.
  Mr. Peter Morrison: The point I was trying to make was exactly the point that the Minister is making—that the old hos-
  1198
  pitals in Liverpool are over-bedded and that the hospitals in the City of Chester are under-bedded as a result. The region is so large that Chester loses out on that basis. Chester has to serve a large and growing population. That is one of the reasons why it needs help, whereas an area such as Liverpool, with a diminishing population, does not need extra cash.
  Mr. Jones: What I was seeking to do was to relate the Chester problem to the whole regional problem. I do not deny that Chester has a need, but I was trying to state it in the setting of the whole region.
  To meet the commitents arising from these new developments in the region as a whole, and the need urgently to improve hospital and other health facilities, the new authority inherited from its predecessors a substantial programme of capital work, including three new district general hospitals—one at Arrowe Park, in the Wirral, one at Runcorn, designed to meet the needs of the developing new town, and the third at Warrington, to replace an old and inadequate hospital and cater for the needs of the developing new town.
  I am stating this as part of the whole regional policy. I understand that the hon. Gentleman may not be so passionately interested in it, but it has some significance in the authority's decision on priorities in hospital services.
  The deficiencies in Chester's hospital services to which the hon. Member has referred result to a large extent from the fact that improvements to existing hospitals, which would have closed had the new general hospital been built, have in the past few years been kept to a minimum. This course was followed because of the pressure on limited resources and through a desire to avoid undertaking expensive upgrading schemes on facilities which would be redundant after the opening of the new hospital.
  However, once it became clear that the new hospital would not be built as programmed, no time was lost in pinpointing where services were inadequate and planning improvements. In the two hospitals which currently provide acute services for the Chester area, the Chester Royal Infirmary and the Chester City Hospital, upgrading schemes to a total completed cost of £400,000 are already under way

  1199
  or shortly to begin. They include the provision of an intensive nursing unit and an anaesthetic room at the Chester Royal Infirmary and a geriatric day hospital at the Chester City Hospital. Also, the Cheshire Area Health Authority has submitted to the regional health authority a list of five additional schemes at Chester hospitals to be considered for inclusion in the region's 1975–76 capital programme. This list includes the hon. Gentleman's specific requests. They comprise schemes to upgrade two wards in the pathology laboratory at Chester City Hospital and the upgrading of the main operating theatre suite and extensions to the X-ray department and accident and emergency unit at Chester Royal Hospital.
  These were the specific requests of the hon. Gentleman. It is too early to say whether sufficient funds will be available for all these schemes to be undertaken this year since in drawing up its programme the regional health authority has to consider the needs of the other areas in the region. The region is also unable to finalise its capital programme for the current and succeeding financial years pending receipt of a firm capital allocation from the Department. We are hoping that it will be possible to issue this shortly. I do not mean that as a mere form of words. The decision is imminent. I hope that we shall soon be able to announce which of these schemes, if not all of them, will be able to progress in the future.
  Although these schemes will not meet all the needs—including those created by closures of a number of outdated hospitals—which the new hospital would
  1200
  have met, they will go far towards eliminating the backlog of works which have been delayed in anticipation of the construction of the new hospital.
  The hon. Gentleman will recall that my right hon. Friend has said on a number of occasions, that as a Government we would seek to divert resources to those areas where health services are of a lower standard than is normally found in this country. It has not yet been possible to establish the criteria which are required to measure this type of relative deprivation or to say how the needs of Cheshire will relate to them. I can assure the hon. Member that the Department is at present directing considerable efforts to this end aimed at correcting the injustices he has mentioned.
  I remind the hon. Member that although we have naturally heard a lot about hospitals, they represent only one aspect of health care as it is provided today. Primary health services play a vital rôle in all areas of treatment, and in this respect Chester fares comparatively well as against the rest of the country. I shall not go into details. I am not suggesting that there are no problems in Chester, but, by and large, taking the work of general practitioners, and so on, and the waiting list—
  The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-eight minutes past Twelve o'clock

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  Prison Rules
  Rehabilitation of Offenders Act 1974
  Rehabilitation of Offenders Act 1974
  Police (Complaints)
  Police (Complaints)
  EUROPEAN COMMUNITY MEMBERSHIP (REFERENDUM)
  EUROPEAN COMMUNITY MEMBERSHIP (REFERENDUM)
NATIONAL FINANCE
  European Investment Bank Grants (London)
  European Investment Bank Grants (London)
  Estate Duty (Wales)
  Estate Duty (Wales)
  £ Sterling (Value)
  £ Sterling (Value)
NORTHERN IRELAND
  Magilligan Prison (Escapes)
  Magilligan Prison (Escapes)
INDUSTRY
  British Leyland
  British Leyland
  Concorde
  Concorde
  Industrial Development Certificates
  Industrial Development Certificates
  Steel
  Steel
  National Enterprise Board (Scotland)
  National Enterprise Board (Scotland)
TRADE
  London House Publishing (UK) Led.
  London House Publishing (UK) Led.
  Balance of Trade
  Balance of Trade
OVERSEAS DEVELOPMENT
  Expenditure
  Expenditure
WALES
  Capital Transfer Tax
  Capital Transfer Tax
  Milk Imports
  Milk Imports
SCOTLAND
  Mortgages
  Mortgages
AGRICULTURE, FISHERIES AND FOOD
  Wine
  Wine
  Skimmed Milk Powder
  Skimmed Milk Powder
  Antarctic Fishing and Hunting
  Antarctic Fishing and Hunting
  Cereals (Prices and Levies)
  Cereals (Prices and Levies)
  Commonwealth Agricultural Bureau
  Commonwealth Agricultural Bureau
  Cheese
  Cheese

Preamble
Reassembling after the Easter Recess the House met at half past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Southwell.
The Earl Cairns—Took the Oath.

OECD AND MULTINATIONAL COMPANIES
Lord BROCKWAY: 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 have considered the proposals for the control of multinational companies submitted by the Trade Union Advisory Committee to the Organisation for Economic Co-operation and Development at its meeting on 26th March 1975, and if so, what conclusions have they reached.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, the paper prepared by the Trades Union Advisory Committee to the OECD is an extensive document containing a large number of interesting ideas and proposals and I am sure it will
2
provide a valuable contribution to the work in OECD on multinational enterprises, and in shaping the thinking of Her Majesty's Government. Unfortunately, the paper was received only very shortly before a meeting of the TUAC Liaison Committee of the OECD; nevertheless the noble Lord might be interested to know that discussion at the meeting was lively and it was generally felt that a useful exchange of views on the issues raised took place.
Lord BROCKWAY: My Lords, I thank the Minister for what he has said and welcome that reply. In view of the fact that the multinational companies are transferring capital from one country to another in order to exploit different labour conditions and to evade taxation, is not the proposal of the Trades Union Advisory Committee, that there should be a code of conduct and control of investment for these purposes, worthy of consideration by the Government?
Lord BESWICK: My Lords, a number of allegations of that kind are made, and what is important is to get at the facts. A good deal of study is now being done on this subject and I agree with the noble Lord that this is important.
Lord BROCKWAY: My Lords, would the Minister say when it is likely that some conclusions will be reached on this matter, so that we may ourselves reach a conclusion?
Lord BESWICK: My Lords, I doubt very much whether there will be a conclusion within the foreseeable future on

3
the whole range of matters touched on by this very extensive report. But to some extent there will be safeguards in the Industry Bill, and others in the Employment Protection Bill, which we shall be considering later this year.
Lord BRUCE of DONINGTON: My Lords, would my noble friend inform the House whether Her Majesty's Government have any special means of monitoring the transactions that take place across the exchanges, which may have a profound effect on the value of the pound expressed in terms of other currencies?
Lord BESWICK: Yes, my Lords. There are certain ways in which information is received, and of course the Inland Revenue has a very direct interest in this.

STANSTED AIRPORT DEVELOPMENTS
2.40 p.m.
Lord MOLSON: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether (in view of the developments carried out at Stansted in breach of undertakings given at the time of the passing of the Order in 1968 under the Town and Country Planning Act), they will now undertake that no further developments will be carried out at that airport under the General Development Order, thereby avoiding the need for a further public inquiry.
Lord BESWICK: My Lords, I am not aware that there has been any breach of undertakings in respect of Stansted, but I can assure the noble Lord that there will be no extension of the airport without full consultation with those concerned.
Lord MOLSON: My Lords, without pursuing the matter of what I have suggested was a breach of undertakings by the Authority, may I ask the Minister whether and when there is likely to be a Statement by the Government about any further airport developments which may be necessary as a result of the cancellation of the Maplin scheme?
Lord BESWICK: My Lords, I understand that there have already been consultations with no fewer than 125 local authorities and amenity groups. The results of those consultations have been studied and, within the next few months, options will be sent to the local authorities concerned, after which there will be further consultation.
Lord MOLSON: My Lords, I do not think the noble Lord has quite understood what I was trying to get at. When shall we know the expected increase or reduction in the amount of air traffic involved? As a result of the cancellation of the Maplin project, in what way is it intended to cope with this situation?
Lord BESWICK: My Lords, if the noble Lord is referring to Stansted, the figures are rather interesting. In 1971 500,000 passengers went through Stansted. The figure last year went down to 205,000.
Lord LEATHERLAND: My Lords, is my noble friend aware that the people of North Essex are very suspicious of the surreptitious developments which have been taking place at Stansted? When will he be able to make an open statement about the Government's real intentions with regard to that area?
Lord BESWICK: My Lords, having had something to do with this matter on both sides of the House over the last seven or eight years, I do not need to be told by my noble friend that the local authority of which he is aware is of a suspicious nature. And I will not accept that any statement I have made has not been open. May I correct the figures I gave just now to the noble Lord, Lord Molson. In 1971 there were 550,000 passengers moving through Stansted; in 1974 the figure was 204,000. So he can see that there is scope for considerable development before the figure reached in 1971 is reached again.
Lord SLATER: My Lords, is my noble friend aware that, if my memory serves me correctly, this is a project that can be said to have been one of the "babies" produced by the Opposition when they were in Government? Does he not find himself in an embarrassing position in having to answer now such questions as have been tabled in regard

5
to this project, in view of the fact that the Opposition gave birth to it?
Lord BESWICK: My Lords, the facts are not quite like that, but I appreciate the helpful nature of my noble friend's question.

GOVERNMENT OFFICES: HEATING CONTROL
Lord MOLSON: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what were the maximum and minimum temperatures at which Government offices were kept before the Fuel and Electricity (Heating) (Control) Order 1974 (S.I. 1974/2160) came into force; and what is the reduction in temperature which will result from that Order.
Lord MELCHETT: My Lords, the normal temperature for Government offices has been 65° Fahrenheit for several years and this has not been changed as a result of the Fuel and Electricity (Heating) (Control) Order 1974 which restricts heating to a maximum of 68° Fahrenheit.
Lord MOLSON: My Lords, are we to understand, then, that the only effect of the Statutory Order was to restrict other people to the temperatures which were in force in Government offices? In view of the statement of the Secretary of State for Energy in the House of Commons yesterday, that he intended to do all that was necessary to increase the saving of energy, will the noble Lord draw to his attention the possibility, and perhaps desirability, of reducing the temparature in Government offices?
Lord MELCHETT: My Lords, I do not think the noble Lord fully understood the Answer. The Order restricts the maximum temperature to 68° Fahrenheit. For some years Government offices have been restricted to a maximum of 65°. So the Order was not enforcing on everybody else the maximum in force in Government offices. It was permitting 3° more than that. I think the Government's view would be that there is very limited scope for any further reduction
6
in office temperatures. There needs to be some flexibility in the maximum temperature. For a great number of years 65° Fahrenheit has been found to be a satisfactory temperature in which people can work.
Lord INGLEWOOD: My Lords, can the noble Lord say what the saving would be if the temperature in all offices was restricted to 65° Fahrenheit, which surely is warm enough for most of us, especially if we are going to wear a waistcoat?
Lord MELCHETT: My Lords, I am afraid that the Government could not provide those figures because we do not know what all temperatures in private offices arc at the moment and therefore cannot say what the reduction would be if all offices were heated at 65°.
Lord SEGAL: My Lords, can the noble Lord say what is the lowest temperature below which Government offices will not be allowed to fall?
Lord MELCHETT: My Lords, the Fuel and Electricity (Heating) (Control) Order, as I say, restricts the maximum to 68° Fahrenheit, and under the Offices, Shops and Railways Premises Act the minimum required is 60·8° Fahrenheit.

NHS AND PRIVATE PATIENTS
2.47 p.m.
Lord CHALFONT: 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 can yet report any progress on their discussions regarding the use of National Health Service facilities and equipment in hospitals for the treatment of private patients.
Lord WELLS-PESTELL: My Lords, Area Health Authorities and boards of governors in some areas have been asked by the unions in recent weeks to reduce services to private patients. Discussions on such requests have been taking place locally from time to time. Authorities generally have continued to make authorised accommodation and services available to private patients subject to their overriding responsibility for National Health Service services.
Lord CHALFONT: My Lords, while thanking the noble Lord for that Answer, may I ask whether he is aware that in some hospitals employees of the National Union of Public Employees are not so much reducing facilities to private patients as insisting that they should be completely abandoned? Can he further give an assurance that the phasing out of private beds in National Health Service hospitals is being carried out according to Government policy and not being accelerated as a result of direct action by the National Union of Public Employees?
Lord WELLS-PESTELL: My Lords, in reply to the first question put to me by my noble friend, the answer is that we are aware of the situation. With regard to the second matter, I can tell your Lordships that it is under discussion at the present moment and the Government will decide on the length and term of the phasing out.
Baroness SUMMERSKILL: My Lords, in view of what my noble friend has said, am I to understand that he is quite satisfied with the new arrangements made for private patients by Moorfields Eye Hospital?
Lord WELLS-PESTELL: My Lords, with regard to Moorfields Eye Hospital I know only what I have read in today's Times and beyond that I am afraid I cannot go.
Lord TREFGARNE: My Lords, did the noble Lord see a report in the Daily Telegraph a few days ago which said that 2,000 beds had been removed from the private sector of the Health Service within the last few months, and can he confirm or deny that?
Lord WELLS-PESTELL: My Lords, I did not see the report and am not aware of it, but I can say that that is just not true at all. There are about 4,500 private beds in National Health Service hospitals. I can only assume that the 2,000 beds mentioned in that particular article refers to the number of private beds not in use at a particular time. Your Lordships will appreciate that the 4,500-odd private beds in the National Health Service are not always fully occupied. During the course of a
8
week or a month a substantial number of them are not occupied. I think the article must refer to that.
Lord TREFGARNE: My Lords, is the noble Lord confirming that there has been no significant reduction in the number of private beds in the last six to nine months?
Lord WELLS-PESTELL: My Lords, I am not saying that. What I am saying in answer to the noble Lord is that there could be periods when 2,000 beds are not being occupied. My under-standing of the occupancy of private beds is that they have tended to decrease over the last year or two.
Lord PLATT: My Lords, speaking as one who has no financial interest in this matter whatever, are Her Majesty's Government fully aware that quite apart from the question of money, there are all kinds of very important arguments on this question? Are Her Majesty's Government further aware that if there are abuses—and I have no doubt that in certain cases there are—other ways exist of curbing those abuses than to close private beds? Will Her Majesty's Government give us some kind of assurance that, whatever may be the powers of the Secretary of State, there will be full discussion about the question of closing beds?
Lord WELLS-PESTELL: My Lords, I do not know whether the noble Lord is referring to the closure of private beds within the National Health Service or to the closure of beds for some other reason. However, the Government are committed to a policy of separating, not abolishing, private beds from the National Health Service. This has been the policy of the Government for some time, and it is the policy which the Government propose to carry out.
Lord ORR-EWING: My Lords, will the noble Lord agree that it is critically important that the nation should be united in the desperate crisis through which we are going, and is not this nasty little vituperative action one more step to divide the nation within the profession—and a very honourable profession?
Lord WELLS-PESTELL: My Lords, I could not agree more with the noble

9
Lord. He must realise, however, that there are two sides to the question. What he has just said about the organisation which is at present under discussion could easily apply to certain consultants who are working to rule.
Lord POPPLEWELL: My Lords, will not the noble Lord agree that, quite contrary to what the noble Lord, Lord Orr-Ewing, has said about this action dividing the nation, the tendency towards establishing that the privilege of wealth will not get priority for treatment is more calculated to consolidate the nation than to divide it?
Lord CHALFONT: My Lords, may I ask the noble Lord whether he is aware that, although one realises there are two sides to the question and that it is a very delicate question, I have in my possession a document which was issued by the Hospital Grants Committee for London hospitals and the National Union of Public Employees which gives a list of patients by name and which instructs those employees who belong to the National Union of Public Employees not to render any services of any kind to these patients? Will the noble Lord give an assurance that on no account will the health of these patients be allowed to suffer by this action?
Lord WELLS-PESTELL: My Lords, it is certainly the intention of the Government to do all that they possibly can to provide not only services to the National Health Service but whatever services are necessary for those who are able to use private beds within the National Health Service. Discussions go on at different levels, and I am hoping that ere long this matter will be resolved far more satisfactorily than appears to be the case at the moment.

CRIMINAL PROCEDURE (SCOTLAND) BILL [H.L.]
RESERVOIRS BILL [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments to be printed.

CORN EXCHANGE BILL
Read 2a, and committed to the Committee on Unopposed Bills.
STANDARD AND CHARTERED BANK BILL
Read 2a, and committed to the Committee on Unopposed Bills.

LOCAL GOVERNMENT (SCOTLAND) BILL
2.55 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of Listowel in the Chair.]
Clause 1 [The valuation roll and revaluation]:
Lord HUGHES: I beg to move Amendment No. 1 as printed. Perhaps I could associate with this Amendment, Amendments Nos. 6, 12 and 16 which are consequential Amendments. They are purely drafting Amendments, the advantage of which is to diminish the number of words in the Bill without altering the purpose. I beg to move.
Amendment moved—
Page 2, line 2, after (" (Scotland)") insert (" (hereinafter in this Act referred to as "the Assessor ") ").—(Lord Hughes.)
On Question, Amendment agreed to.
The Earl of LISTOWELs: Before I call Amendment No. 2,I should point out to the Committee that if this Amendment is agreed to I cannot call Amendments Nos. 3. 4 and 5.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 2:
Page 2, leave out lines 28 to 39 and insert (" in respect of any entry therein which is incorrect.")
The noble Lord said: I think it would be convenient if Amendment No. 4 which stands in my name were considered with this Amendment. They are alternative Amendments. In the first five clauses of this Bill changes are suggested in the valuation procedures in Scotland. The Scottish Association of Assessors, who have to carry out the work in Scotland, have noted that these changes amount to a substantial alteration of the system, moving to a quinquennial system instead of an annual one. When the Bill was passing through the other place, they were unfortunately too late to put forward the suggestions for amendments which they would like to be made to the Bill. I have received those Amendments, and I see that in some cases they will find themselves operating under a much more difficult system than the present one, unless the Government are prepared to make some changes. If, for one reason or another, the Amendments which are on the Marshalled List are not satisfactory, I hope that the Government will be able to suggest Amendments of their own.
Unless there is a change of the kind set out in Amendments Nos. 2 and 4, the operation for valuation could be upset. It is too late for Amendments to be made in another place, and that is why I am hoping that the Government will be able to respond in your Lordships' House, either at this stage or at a later stage. The proposal is that a right which an assessor in Scotland has at the moment should be continued under the new procedures. At present an assessor has a right to alter a first assessment and to make correcting adjustments between the time when a valuation roll is made up and its entry into force. That is a limited period, and it is only during that period that they ask for this right to continue.
This right has helped assessors to be as fair as they possibly can in Scotland, as between different ratepayers and different districts. The ratepayer still has a right of appeal if he disagrees with the later adjustment. The assessors have to do this job. They are faced with this derogation from what has been a useful function for them in the past, and it
12
means that their method of work will be changed unnecessarily.
This appears to have happened by accident. It is because a procedure which has operated under English legislation is now being incorporated in this Scottish Bill. But I will not go into the details of the English situation and will say only that this procedure has operated in England against a quite different background. Therefore, this appears to have been put in by accident. It is a change which will make the operation much more difficult for those in Scotland who have the task of assessing. I hope that if the Government do not find Amendment No. 2 commendable they will accept Amendment No. 4, or will have some other suggestion of their own in order to meet this situation. I beg to move Amendment No. 2.
Lord HUGHES: I am sorry that I cannot accept either Amendment No. 2 or Amendment No. 4, but not necessarily because these would be inappropriate in the right context. This is a Bill to do the final tidying-up that is necessary for the bringing into operation on 16th May of the reform of local government which was enacted in 1973. There are a number of valuation points in the Bill which it is expedient to cover in connection with this reorganisation, but quite a number of the points which have been put forward by the noble Lord, Lord Campbell of Croy, are changes in valuation which are not necessarily related to anything which has to be done for reorganisation. They may or may not have merit on their own, but they could be fully evaluated only if we were looking at them in the context of changes in the valuation law generally. The attitude of the Government is therefore that in so complex a field as valuation we ought not to be changing the principles under which assessors work, unless it is absolutely essential that changes should be made because of the new authorities.
As the clause stands at the present time it allows the assessor, during the period of the making up of the roll and its coming into force, to alter it by entering property which has been omitted in error; by entering property which has come into existence or occupation since the roll was made up; to reflect any alteration in value due to a material

13
change of circumstances and to correct any error of measurement, survey or classification, or any clerical or arithmetical error.
The effect of Amendment No. 2 would be to sweep away these specific grounds for alteration, and to substitute power limited only by the requirement that the alteration should be "in respect of any entry … which is incorrect". The second Amendment would add a further power allowing the assessor to alter the roll to ensure its correctness. The Amendments invite the assumption that the incorrectness of the roll is a matter of the assessor's opinion, and in the view of the Government this is a rather unusual power to put solely in the hands of an official. Two equally skilled valuers might on the same evidence ascribe different values to the same property, simply as a matter of professional judgment. In short, there is no absolute criterion of correctness, so the power which the Amendments seek to confer on the assessor must be an arbitrary one.
Nor would the Amendments place any limit on the number of times the power could be exercised. Having altered an initial entry, the assessor might wish to take yet another view of the evidence and alter an entry a second time. It would obviously be unfair to individual ratepayers to place such wide powers in the hands of officials, particularly when these officials are not subject to administrative control, but only to the valuation appeal committee or the Lands Valuation Appeal Court.
When an assessor issues a valuation notice he does so after such researches and consideration as he thinks necessary. If he is mistaken as to the facts, the clause allows him to reassess. If the facts change so as to affect value he may reassess. But subject to that he should be bound by values entered in the roll in the knowledge of the facts, and in the light of his professional skill and judgment exercised when the roll is made up. It could be argued that the wide powers which the Amendments would give would prevent the difficulties and discontent caused when the assessor has to tell a ratepayer that his value is not too high, but the value of a house which he cited for comparison purposes was pitched too low. This may be so, but the price to be paid is the arbitrary increase in
14
rateable value which the other ratepayer would be liable to suffer if the Amendment were carried. With the pressure of revaluation work it is not surprising that the valuations of a few properties should be questionable. If an undervaluation is attributable to any of a fairly broad spectrum of errors it may be corrected under Clause 1(6)(d). But it is better that an occasional error of valuation judgment should go uncorrected, than that assessors should be given complete freedom to vary assessments which they have made in full knowledge of the facts. For these reasons we think that given the purpose of the valuation changes in this Bill it would not be proper for the Government to advise your Lordships to accept these Amendments.
Lord CAMPBELL of CROY: From what the noble Lord has told us, it seems that his objection is that this Amendment would give an arbitrary power to the assessors who are, as he says, officials. But this is a power which they use at present. I would call it more a function; it is part of the system under which they are operating at the moment, and I would ask the noble Lord this question, if I may have his attention. I sympathise with the noble Lord, because I realise that he has to deal with this Bill entirely on his own, and I am in no way critical of his receiving messages, but on this point I should like to have his attention. This is the system under which the assessors are operating at present and, so far as we can tell, it has worked fairly; it has been for the benefit of ratepayers in different properties and in different districts. So when the noble Lord says his objection is that it is an arbitrary function bestowed upon the assessors, does he criticise the system as it is operating at the present? —because in this respect they are not asking for anything more than the function which they have at the present time.
Secondly, the noble Lord said that this is a valuation matter. As I pointed out, the first five clauses of this Bill alter the valuation procedures and this amounts to a very substantial change. But if it is a valuation matter, I presume that what he is suggesting is that this should be dealt with under a valuation Bill rather than a Bill concerned with the reorganisation of local government and its consequences. In that case, can the noble Lord give me any

15
indication of when a Scottish valuation Bill is likely to be coming forward? If we accept what the noble Lord has just said, the assessors have the problem of trying to operate what to them will now be an unsatisfactory system, until the new valuation Bill comes into effect. No doubt the Scottish assessors will read what the noble Lord has said, or will otherwise get a report of it, and it is important to them to know how long they have to operate in what is now an unsatisfactory situation. Adjustments to the procedures are being made in this Bill because of the reorganisation of local government, but the complementary changes in a valuation Bill are not coming forward and the assessors will have no idea when the necessary changes to improve this unsatisfactory situation will arrive.
Lord STRATHCLYDE: When the noble Lord comes to reply, could he tell us why it is that this change is necessary? As I understand it from my noble friend, the system which has existed hitherto is to be changed. But why? Is it because it is unsatisfactory in some way or another? It has been running for a very long time, and I do not know that I have heard many complaints about it. What is to be the improvement which will take place under this new procedure?
Lord HUGHES: What the noble Lord said about the present position is true to a certain extent, but not over the whole field. It is true that at the present time assessors are free to alter the roll during a limited period after publication, but it should be remembered that the wide powers in the Valuation and Rating (Scotland) Act 1956 were mainly a bringing forward of the position from the Land Valuation (Scotland) Act 1854. That was at a time when I can say, I think without contradiction at least from any of the people then involved, that they were less qualified than are the assessors today. But even if the present power is exercised sparingly, there is no means of knowing how much resentment it causes. The present power is for a limited period after publication. But what is suggested in these Amendments would not be a limited period, but a continuing one.
If I may refer to the point raised by the noble Lord, Lord Strathclyde, about there being no dissatisfaction with the
16
situation, if he casts his mind back to the time when he was a member of the Glasgow Corporation, and if I cast my mind back to when I was a member of the Dundee Corporation, we shall remember that the general attitude of the ratepayers when they got a revaluation was that they were totally dissatisfied, because it seldom happens that a revaluation reduces anyone's liability. If in fact only a minority of people appeal against the revaluation, one must not think that in the rest of the cases silence means consent; it just means that other people have decided they would have to put up with it.
The noble Lord, Lord Campbell of Croy, went on to ask when a new valuation Bill might be introduced. I am quite certain that if we were sitting on opposite sides of the Chamber, and the noble Lord had made the statement that I have just made, he would probably use the words that I am now about to use—" at the earliest possible convenient time ". My crystal ball is no more effective in deciding that answer. Obviously, on a new valuation Bill coming forward, there will be the fullest opportunity, not merely for the local authorities and their Association, but for the assessors and anyone else concerned with valuation, to put forward all the points they think ought to be made in considering either the continuation of present procedures or their alteration. But the merit of doing this in a valuation Bill is that one is looking at all these things in the context of valuation alone, and one does not have the complications necessary because of a change in the local authority structure.
So while I have in fact criticised the merits of the proposal because of the very wide power it confers on assessors (in the matter of time, going much beyond what they have at present), in another context if there were other things in a valuation Bill which perhaps qualified or amplified it, it might not be unacceptable. I am merely arguing against it in the context of the present Bill. I would not wish to go further on this complex position than I have at present, without much more briefing.
Lord STRATHCLYDE: May I say that I did not intend to suggest that no one was dissatisfied. I have never known of a rate or a valuation being fixed that

17
did not cause the most deep dissatisfaction to everyone to whom it applied. The noble Lord, Lord Hughes must be well aware that this is the situation throughout the whole of Scotland. We do not like to have valuations placed on us at any time. Certainly there is always dissatisfaction with every valuation. But that does not account for the question that I put first of all, as to what is the real need for doing this. I do not see the need.
Lord HUGHESs: I may go further than the noble Lord, Lord Strathclyde, in saying that dissatisfaction aroused when people are asked to pay more money probably spreads over the whole world.
Lord CAMPBELL of CROY: What my noble friend has said reminds us that the assessors of Scotland have to carry out an unenviable and invidious task. That is why they are particularly anxious that they should retain a procedure which helps to produce fairness between different ratepayers, and which is seen to be fair. I understand that in the discussions between the Association of Scottish Assessors and the Scottish Office, it was admitted that there is a problem, and that part of it can be dealt with in regulations by the timetable, which statutorily have to be issued on what is described as the "as at" date. But I will not go into the technicalities of that. The noble Lord, Lord Hughes, said that a valuation Bill would be "coming forward", in the usual immortal words which the usual channels usually expect. But I think that is of help, because the noble Lord indicated, if I may paraphrase it, that the Government are contemplating a valuation Bill for Scotland, and would bring it forward when practicable. So at least the assessors can see that their difficulties, although made worse for the time being, will come to an end in some foreseeable future. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.18 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 3:
Page 2, line 37, leave out (" or classification ").
The noble Lord said: This is a very simple Amendment. Here again, the Association of Assessors, who have the task to perform, point out that the word
18
"classification" has no recognised meaning in the context of valuation law in Scotland. They regard it as superfluous, and believe it could lead to misunderstanding, and unless the Government have reason to think otherwise it would be best struck out of the Bill.
Lord HUGHES: Properties may be classified in various ways, and an error of classification might have a greater or lesser effect on valuation, according to its nature. A house might be classified as a guest house, or a private dwellinghouse; or houses may be classified according to their degree of amenity, in so far as this is definable in factual terms. For example, if a house is placed mistakenly in a given amenity level, it is proper that the assessor should have powers to rectify his error as he does if the error is one of special measurement.
Of course I agree with the noble Lord, Lord Campbell of Croy, when he says that the word "classification" has no particular place in valuation procedures. I would have been obliged to agree with him if he had said that it was a vague term, but I do not think it can be argued that there is any risk that its meaning will be proved to be too wide because, after all, the Amendment we have just spoken on would have given much wider scope than this to the assessor. The previous Amendment was an attempt to widen the powers of the assessor. This Amendment, if it were carried, in fact would narrow the powers of the assessor. In doing what we have, we are drawing a reasonable middle line on this basis, not going too far in one direction, but not circumscribing it too much in another. If there was an objection to the use of the word "classification" as such rather than what it is intended to enable the assessor to do, then, of course, we could not confine it here, because the word appears again in Clause 2(l)(f), and they do not appear to have asked for any alteration there.
I would be prepared to undertake to look at this in the interval; to examine with my advisers whether there is any real fear that the use of the word "classification" could cause any problem in valuation procedures, and, if so, whether there is any way in which it could be helped either by use of a better word or by an attempt to define what "classification" is. That is as far as I can go

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at this stage. Like the noble Lord, Lord Campbell of Croy, I do not like going too wide in these matters; that is why I was against Amendments Nos. 2 and 4. It may be that in seeking to give reasonable powers to the assessor we have taken this one wider than we ought to do. If the noble Lord will agree, I should be happy to have a look at it. I hope he will be content with that assurance.
Lord CAMPBELL of CROY: With that friendly reaction from the noble Lord towards this Amendment, I am glad to ask leave to withdraw it.
Amendment, by leave, withdrawn.
Lord HUGHES Lord HUGHES moved Amendment No. 5:
Page 2 line 39, at end insert—
(" (e) by entering therein any lands and heritages which the Assessor has directed him under section 5 of this Act so to enter.").
The noble Lord said: With Amendment No. 5 I wish to speak to Amendments Nos. 7 and 13. All of these are drafting Amendments. The assessor of public undertakings is required by Clause 5(2) to direct the local assessor to enter APU valuations in the valuation roll, and Clause 5(4) places the local assessor under a duty to make the entry in the roll accordingly. The purpose of the Amendments is to add this duty to those already placed on the local assessor by Clauses 1 and 2(1) and to remove it from Clause 5, where, logically, it is out of place. I beg to move.
Lord CAMPBELL of CROY: Do I understand from what the noble Lord has said that this is simply moving a part of the Bill from one place to another, rather than second thoughts which the Government have had on the substance?
Lord HUGHES: It is the first of the alternative suggestions which the noble Lord has put.
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Alterations to valuation roll which is in force]:
Lord HUGHES: I have spoken to Amendment No. 6 on Amendment No. 1. I beg to move.
Amendment moved—
Page 3, line 12, leave out "of Public Undertakings (Scotland)".—(Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES: I have spoken to Amendment No. 7 on Amendment No. 5. I beg to move.
Amendment moved—
Page 3, line 29, at end insert—
"(ff) by entering therein any lands and heritages which the Assessor has directed him under section 5 of this Act so to enter; ".— (Lord Hughes.)
On Question, Amendment agreed to.
3.25 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 8:
Page 4, line 5, at end insert—
(" Provided that if the proprietor, tenant or occupier of the lands and heritages has intimated in writing to the assessor the event by reason of which a reduction in value of the lands and heritages is made, or on appeal the value in the relevant entry has been reduced on the ground of a material change of circumstances, the alteration in the roll shall have effect as from the date of the event or as from the beginning of the year in which intimation of the event is made, whichever is the later, or, as the case may be, as from the date of the material change of circumstances on which the appeal is grounded or as from the beginning of the year in which the appeal is lodged, whichever is the later; ").
The noble Lord said: I beg to move Amendment No. 8 as printed on the Marshalled List. The purpose of the Amendment is to ensure that an occupier who has appealed or made representations to the assessor about some material change of circumstances—described as "an event"—should receive the benefit of any consequential adjustment with effect from the date of the event or the beginning of the year in which he raised the matter, whichever is the later.
The Amendment thus produces the result that where an intimator intimates in writing an event—for example, the burning down of a garage, or some kind of loss of amenity which reduces the annual value of his property—no administrative or judicial delay in settlement of the matter will affect his right to the benefit of the adjustment with effect from the date of the event, provided that intimation is given during the year in which it occurred. Where the intimation is delayed until a later year—and when I refer to "year" this is the financial year, not the

21
calendar year—the adjustment will be made from the beginning of that year. If there is an appeal, while it is pending the amount of the rates payable may be restricted under Clause 9 of this Bill. This seems a reasonable safeguard for a rate-payer in the kind of circumstances that could arise. I beg to move.
Lord CAMPBELL of CROY: I would ask only why this has appeared at this stage of the Bill, because it seems a reasonable provision and has been explained as such by the noble Lord. Were representations made about this from outside, or is this something which the Government have thought of since the Bill has been through another place?
Lord HUGHES: I do not know and, quite frankly, as a ratepayer I have never thought it necessary to look a gift horse in the mouth. After all, I might get home and discover that my garage has burned down. If I am to have the benefit of this, I do not see that I should find out why I would not have had the benefit if it had burned down last year.
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 9:
Page 4, line 11, at end insert ("; and the date on which any alteration in the roll made under this section comes into effect shall be stated in the roll")
The noble Lord said: I beg to move Amendment No. 9 as printed. This Amendment places a duty on the assessor to show in the valuation roll the effective date of any alteration made in the roll. This is reasonable, because, if it is altered, it could affect the rates which would be payable. Where the date is shown, the ratepayer knows exactly what part he has to pay at one valuation and what part he has to pay at the other one. If the noble Lord asks me why this was not done before, again I do not know, but it seems to me to be a desirable refinement.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 [Provisions supplementary to Sections 1 and 2]:
Lord HUGHES: I have already spoken to Amendment No. 10. I beg to move.
Amendment moved—
Page 4, line 27, leave out (" Subject to section 5(4) of this Act ").—(Lord Hughes.)
Lord CAMPBELL of CROY: In fact, from my record, it was not one of the Amendments mentioned by the noble Lord, but it appears to be consequential, so I would not wish to raise anything on it.
On Question, Amendment agreed to.
Lord HUGHES: The noble Lord is perfectly right. Amendments Nos. 10, 11 and 23 all hang together. I ought to have said on Amendment No. 10 that these are drafting Amendments consequent on the Amendments to Clause 1. I now beg to move Amendment No. 11, with the explanation being retrospective to Amendment No. 10. I beg to move.
Amendment moved—
Page 4, line 32, after ("above") insert ("other than an entry made under section 1(6)(e) or 2(l)(ff) of this Act ")—(Lord Hughes.)
On Question, Amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Valuation of public under-takings]:
Lord HUGHES: I beg to move Amendment No. 12. I spoke to this matter on Amendment No. 1.
Amendment moved—
Page 6, line 25, leave out ("of Public Undertakings (Scotland) ("the Assessor")")— (Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES: I beg to move Amendment No. 13. I have already spoken to this Amendment.
Amendment moved—
Page 7, line 27, leave out subsection (4).— (Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 14:
Page 8, line 10, leave out ("entry in roll in consequence of ") and insert ("valuation as contained in ")
The noble Lord said: This is a slight drafting Amendment. It brings the reference to the content of Section 24 of the Lands Valuation (Scotland) Act 1854 into accord with the content of that Section as amended by paragraph 2(b) of Part II of Schedule 6 to the Bill. I beg to move.
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 agreed to.
3.32 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 15:
After Clause 6 insert the following new clause:
Valuation of Caravan Sites.
". (1) The annual value of a caravan site shall include the values of all caravans thereon which, except for the operation of this section, would qualify to be separately entered in the valuation roll and the proprietor and occupier shall be deemed to be the proprietor and occupier respectively who would have been entered in the valuation roll in respect of the caravan site.
(2) In this section "caravan sites" and "caravans" shall have the meanings assigned to them by section 29 of the Caravan Sites and Control of Development Act 1960."
The noble Lord said: This is a new clause in the terms printed. I start by saying that this is a probing Amendment, and I shall be surprised if the Government are able to accept the new clause in this wording. It raises a subject which has been a rating problem not only in Scotland but South of the Border as well, that of the whole question of caravans; not just, as some years ago, of whether caravans should be rated at all, but also how to treat the many differing kinds of caravans.
It has been accepted that in certain circumstances individual caravans should be rated like other dwellings. I am sure that your Lordships will know of some caravans which are so extensive and well appointed that they have all the attributes of a house; that caravan, in Scotland, has been accepted as a rateable subject, and has been treated like other dwellings. Where it is the permanent residence of its occupier, then it is right and proper that if it is appropriate it should be entered individually in the valuation roll. Difficulties have arisen over caravan sites because often they have a mixture of different kinds of caravans. There may be touring caravans and static caravans; there may be the kind that I have just mentioned, which are the equivalent of a permanent home, on the same site as caravans used simply for holidays in the summer or for short lets. A single caravan may have many occupiers in succession during a single summer season.
By Clause 2 of the Bill the assessors would continually have the task, under the new system, of endeavouring to trace and then get in touch with occupiers of caravans—some of whom will have occupied the caravan for a very short time—in order to enable the local authority to try to collect rates from them. I think that in our rating system we do not expect people who go into a caravan for ten days or two weeks to pay a separate rate demand, or a portion of it, on a separate individual missive sent to the individual. That is why it has been the practice in some cases for caravan sites in Scotland to be treated as one entity. That is the suggestion in this new clause. Then the caravan owners and occupiers, who may be constantly changing, would answer to the owner or the occupier of the caravan site. At present the owner or occupiers of individual caravans are under no obligation to inform the assessor about their occupation or their movements.
Looking at the other side, because there are two sides to this question, one does not want to place too heavy a burden on the owner or occupier of a caravan site, but he would in any case have to make out bills to individual caravan owners or occupiers for other charges, such as water and electricity, if laid on, and it would not be a particular burden for him also to include an element for rates. I know that problems arise about this. One which immediately comes to mind is how the question of rate rebates would be dealt with, because an individual occupier of a caravan might be eligible for a rate rebate and one might then find that the owner of the caravan site had the task of sorting out the rate rebates of individual occupiers. I see that as a possible burden. On the other hand, if the situation is left as it is at the moment it means that some occupiers of caravans will have to pay rates—usually those who were there for some time—and others will not; some will get caught and some will escape. That is a most unsatisfactory situation.
I should like to draw the attention of the Government to this problem. This is a probing Amendment, but it is an important matter which still needs to be sorted out in Scotland. The attempt to deal with caravan sites as single entities has itself run into difficulties in the courts

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because there have been adverse findings by the courts. What is needed is legislation to clarify the position for the future. I think that it should be on the lines of the caravan site being dealt with as a single entity; that is the most likely answer to this difficult problem. How-ever, I recognise that there are more subsidiary problems to be settled, such as the rebate problem, and that this new clause as drafted is not in itself sufficient. I hope that it identifies what remains a problem and what could be a cause of great dissatisfaction in the future. I hope that the Government will deal with it urgently.
Lord SOMERS: I have no right at all to enter into a Scottish Bill, but the noble Lord said that many people may occupy a single caravan. Surely the owner of the caravan should pay the rates. If he lets it to others then naturally he gets the rent for which he asks; but surely he should be the person responsible for the rates, just as used to be the case with a private house, when the owner of the house paid the rates and, if it was let, the tenant paid the rent.
Lord CAMPBELL of CROY: I agree. I think that where the summer holiday season is concerned and there may be ten or a dozen different occupiers, not owners, then the owner of the caravan should be the person who pays the rates, and he may pass the amount on in his subletting. But the difficulty at present with such caravan sites is to identify even the owner, because the ownership of the caravan sometimes changes two or three times during the year, and the letting even more often. It is a problem, and the only way in which one can be sure that a fair rate is being paid by every caravan on the site, regardless of the number of times the ownership or occupancy changes, is to proceed on a site basis.
Viscount AMORY: I share the diffidence expressed by the noble Lord, Lord Somers, in having the imprudence to enter a Scottish debate, but I want only to sound one word of warning. Though this may not be necessary, my warning is to show how easy it is to underestimate the administrative cost of collecting a large number of small rate payments from a changing population. Sometimes one thinks that this will be a small
26
matter, but when one takes into account the cost of the official, his secretarial assistance, the cost of Social Security payments for the official concerned and the cost of accommodation occupied by him, the actual amount is far higher than one is apt to think. But anyone who knows local government at the present time will know how expensive each individual task of this kind can be. So I hope that, whatever is decided, it will not impose too great an administrative burden on the officials concerned.
Lord STRATHCLYDE: Perhaps I may now say something which I intended to say earlier. I express the hope to the noble Lord opposite that he and his colleagues may take into consideration what has been said today. This matter is of such great importance to Scotland as a whole. The caravan business is growing increasingly. The number of caravans parked all over the country is enormous. It is a growing problem. Therefore I hope that the noble Lord, Lord Hughes, will take into consideration what has been said by those who have already spoken.
3.43 p.m.
Lord HUGHES: First, may I say that, as a Scottish Minister, I have never found any occasion to object to our col-leagues South of the Border entering our debates. Invariably, I have found them helpful to me and not to the movers of Amendments. It is no exception on this occasion. I appreciate very much the motives of the noble Lord, Lord Camp-bell of Croy in tabling this Amendment. Undoubtedly, it draws attention to a problem which is increasing and to which assessors have not been able to find an easy solution. Unfortunately, the method suggested could have the effect of causing considerable hardship to individuals.
The noble Lord, Lord Campbell of Croy, spoke of the varying types of "let." He suggested that caravans might be used on sites by some people for years, while others may occupy a permanent caravan for only a few holiday weeks. I shall give another variation: some are very much better off than others. The noble Lord referred to a rate rebate and spoke of the possibility of the site owner having the additional

27
complication of deciding what rebate a person should be entitled to receive. But there would be no rebate. He could do nothing about it, because he would be the person on whom the rate was levied. He would not be entitled to collect any rebate, so he could not pass anything on. But there might well be a number of people on a site who are living there not necessarily because they choose to live in a caravan but because a caravan happens to be the cheapest facility available to them in which to live. And they might well be the people who are most in need of a rates rebate, but they cannot get any such rebate if they themselves are not individual ratepayers.
To a certain extent, the problem will be simplified in so far as the owners of permanent caravans are available. If the rate is levied on them individually at the beginning of the year—with the mandatory provision which is now in the Bill for rates being payable by instal-ments—it would be a far simpler matter to transfer the liability for future instalments to the new purchaser of a caravan. Incidentally, I am told that the difficulties about knowing who are owners is not always as great as the assessors may have represented to the noble Lord. I am told that, at least at some of these sites, there is a situation where, on the sale of a caravan, if a profit is emerging, the site owner wants a rake-off, and he knows perfectly well who is selling and who is buying, so that he can obtain his share of the rates available. But what I have said deals only with the fringes of the problem. It does not deal with the main problem itself. The answer must depend on the Layfield Committee which is currently carrying out a complete study of rating and they hope to submit their Report before the end of this year. This is where we may be able to obtain help. This problem of caravan site rating is one matter which they are considering. The problem may take on a completely different complexion as a result of the Committee's proposals.
I am grateful to the noble Lord for having tabled his Amendment, because if it does not serve any other purpose it would certainly once again direct the attention of the Layfield Committee to
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the fact that there exists this acute problem and that we are looking to them for help in finding a solution. In these circumstances, therefore, I hope that the noble Lord, Lord Campbell of Croy, will accept that the Government are aware of the problem, that we should like to find the solution to it, but, having set up this excellent Layfield Committee, it would be as well to wait for their expert advice, when it is after all not so far away.
Lord CAMPBELL of CROY: I, too, am grateful for the contributions from the noble Lord, Lord Somers, and also my noble friend Lord Amory. He pointed out that anything which adds to costs and the burden of administration ought, if possible, to be avoided. That, as he recognised was one of the points behind my Amendment. If the assessors have to spend an inordinate amount of their time trying to trace the owners of caravans, when that is only a small part of their total dwellings, this adds to the cost of local authorities, and, therefore, to the burden of rates. Likewise, much time of local authority officials—and, therefore, money—can be spent in trying to collect rates from many individuals. That is certainly a consideration which I hope the Layfield Committee will take into account. If it is proper for them to do so, I shall be grateful if the Government could make sure that this difficulty of caravan rating comes to the attention of the Layfield Committee. As the noble Lord said, this is another case where we are waiting for Layfield. In view of the noble Lord's remarks, however, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clauses 7 to 9 agreed to.
Clause 10 [Collection of rates by housing body on behalf of rating authority]:
3.49 p.m.
On Question, Whether Clause 10 shall stand part of the Bill?
Lord CAMPBELL of CROY: I wish to raise a point on this clause, because I hope that in guidance which the Scottish Office send in circulars to local authorities—where it has been arranged that under this clause a housing authority will also collect rates—it will be made clear how desirable it is that rates and rent should be shown separately, and that

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separate amounts should be shown as well as the total; otherwise, there can be great confusion. I am sure the noble Lord, Lord Hughes, knows that in various areas in Scotland in the past householders have thought they were paying only the rent, when they were in fact paying rent and rates combined. They thought the rent was high when, very often, the rates were the larger element. It has been a phenomenon in some areas in Scotland that rates have been high while rents have been low.
If the noble Lord were to say this is always done, then I would have to assure him that that is not the case because I have in my possession—I do not have them with me, but I could produce them —two examples of local authority demands for rates and rents together, which do not make it clear that they are separate amounts or, indeed, what the figures are. That occurred in the late 'sixties and I produced those examples in a debate in another place on this subject to show that it has happened. It can also happen that the print used is so small that the householder does not know that he is paying rates and rent, but thinks that it is only the rent, and he can be under the false impression that he is making a payment related only to his house when, in fact, a large part of the amount is a contribution to, among other things, education and local authority services in his area. I hope that the Government will ensure that this advice is given in circular guidance to local authorities.
Lord HUGHES: I completely agree with the noble Lord, Lord Campbell of Croy, that it is desirable that where a combined payment is made, the person making the payment should know exactly what it is. As the former chairman of a development corporation I very much appreciate the need for this, because when I was in that position we revised the rents which had the effect of putting them up at intervals of three years, but the tenants' payments went up every year because the rates altered. If it had been a combined payment they would have said— and it was said in many cases—" The rent has gone up again." It is desirable, and I think it will undoubtedly be the case, that where a body other than the local authority itself is the housing body referred to, it will be very careful to
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make certain that the sums are distinguished. Whether a local authority itself would wish to distinguish between its rent and rates would be a different matter altogether and it might be regarded as an undue interference with the functions of an authority to direct that this should be done. But I certainly have no objection to pointing out the advantages of an occupant knowing how much he is paying in rent and how much he is paying in rates.
Clause 10 agreed to.
Clauses 11 to 13 agreed to.
3.53 p.m.
Clause 14 [Termination of certain existing grants for roads and public transport]:
On Question, Whether Clause 14 shall stand part of the Bill?
Lord CAMPBELL of CROY: I wish to raise again the subject of transport. I referred to this matter briefly on Second Reading and I raise it again now because this clause terminates certain grants sub-sidising transport in Scotland for roads, bus and ferry services and railways. Transport costs have increased sharply in the last year throughout the United Kingdom, but I believe that the impact has been felt most in the rural areas. It has certainly been felt greatly in the rural and more remote areas of Scotland, of which there are really no equivalents elsewhere in Britain. What do the Government see as the effects of this increase? What in their view are the alternatives? Is it a fact, as I presume, that it is intended that this should be completely compensated for by the proposed increase in the rate support grant? I hope that the Minister can explain the position and, if I am right in what I say about the rate support grant, will give an assurance that the grants which are to be removed will at least be compensated for, and perhaps outweighed, by the increase in the rate support grant.
Baroness ELLIOT of HARWOOD: I rise to support the remarks of my noble friend Lord Campbell of Croy, because there is an acute transport problem in rural areas, and if anything were done in this Bill to reduce the assistance that is given by way of grant aid, the problem would become more acute. We know that at present bus services are inadequate

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and, coupled with a lack of train services, this handicaps those living in rural areas. A particular difficulty faces those living in rural parts of Scotland because, for example, it is difficult to obtain farming help when transport facilities are inadequate. That difficulty will be increased if transport is made even more inadequate and it is important that we should not just take—perhaps "arbitrary" is too strong a word—decisions on transport without recognising that some areas are desperately short of facilities, and that anything which makes it more difficult to run a bus or any other service should be avoided at all costs. Also, let us not forget the need to improve the roads in these areas, especially where there are no train services. I am sure that the Government will be sympathetic and will do their best not to cut the transport grants.
Lord HUGHES: It has been the policy for a number of years to seek to eliminate specific grants where these could reason-ably be brought into the general picture covered by the rate support grant. I wish, first, to confirm that expenditure which has hitherto been the subject of specific grants for transport purposes is now brought in as reckonable expenditure for rate support grant. Obviously, I can-not say that every local authority will get as much under the rate support grant as it formerly had under the specific grant, because although the rate support grant for Scotland as a whole is 75 per cent. of the reckonable expenditure, it varies very much from one authority to another. In fact, there are still some authorities, some of which are, as the noble Lord, Lord Campbell of Croy, mentioned, in the more remote areas, which are, generally speaking, among those with the higher rates of support grant. The noble Lord will remember that when he was Secretary of State for Scotland there was at least one remote local authority whose rate support grant accounted for more than 90 per cent. of its expenditure, and that authority was not getting specific transport grants at that sort of figure. So an authority in that category would be doing better under these proposals, but an authority whose level of rate support grant, because it was a better-off authority, was lower than the specific
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grant, would be worse off under these proposals.
However, the proposal has been accepted by local authorities generally as being an improvement on the present set-up because, with this responsibility being placed on the Regions, they are enabled with the aid of the rate support grant to look at all aspects of the matter—expendi-ture on roads, on the subsidising of public transport, on concessions for old age pensioners and on any other matters related to transport—and the whole thing comes under the umbrella of the help which they get from the rate support grant. The proposal is, therefore, generally accept-able, but it would be wrong if I did not accept the fact that there may be some authorities which may be receiving less than if the specific grants were continued. But I think, taking the pattern as a whole, that the amount of expenditure which will fall on the Government by making this matter the subject of overall rate support grant at 75 per cent. will almost certainly mean that the Government will be giving a bigger measure of support in this sphere than was the case hitherto.
Clause 14 agreed to.
Clauses 15 to 18 agreed to.
Clause 19 [Amendment of section 201 of Act of 1947]:
On Question, Whether Clause 19 shall stand part of the Bill?
Lord CAMPBELL of CROY: I suggest to your Lordships that this clause should be left out of the Bill. Clause 19 has nothing to do with the rest of the Bill. It is incongruous and objectionable and should be cleanly excised. Its provisions have already been enacted in the Scottish Local Government Act 1973 and they are due to come into force in five weeks' time. Why this repetition and duplication? The only reason is to enable the Government to procure retrospective application to the consequences of actions by certain councillors who delayed implementation of the Scottish Housing Act in 1972. This is the "Caledonian Clay Cross clause," as I described it on Second Reading.
We have no quarrel with the new pro-visions themselves. These were introduced of local government in Scotland, starting by me in the 1973 Act for the new system

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next month. What is wrong is the intention to apply them retrospectively to the consequences of actions taken over two years ago. Furthermore, it is now clear how this enabling power would be used. The Clay Cross Bill or, to give it its proper name, the Housing Finance (Special Provisions) Bill, shows that the Government intend to relieve offending councillors in England from disqualification. The system is different in Scotland, where disqualification has not arisen. The Government could not treat councillors in Scotland more harshly than the Clay Cross councillors in England, since in Scotland they all eventually carried out the Scottish Housing Act, though they did so late. In Scotland, equivalent exoneration would be to relieve councillors of all or part of due surcharges or of fines imposed by the courts. There is one particular case in which a large fine was imposed on one council.
We recognise that the amounts of money may, in some cases, be too large for individual councillors to be able to pay. However, a reputable way to proceed would be for the Government to propose to Parliament later, at the stage when the amounts due had been deter-mined, what would be the appropriate surcharges in the circumstances. I am sure that Parliament would then deal with that situation practically and humanely. Where failure to cany out Acts of Parliament is concerned, those who decide to flout the law should face the consequences of their action, but should the burden, for an individual turn out to be ruinous, then the Government can in due course ask Parliament to decide on the appropriate alleviation. What the present clause is proposing is a retrospective application of provisions which are due to come into force in five weeks, anyway, under another Act, and to give the Secretary of State for Scotland entire power to decide what to do about actions taken in defiance of laws of Parliament passed two years ago.
This is an enabling clause. It does not, in itself, indemnify in any particular respect, in contrast to the Bill for England and Wales, which does; namely, by cancelling the disqualification of the councillors. But the Government could not carry out that amount of indemnification for the councillors of Clay Cross, who continued to defy the law. and insist on
34
harsher penalties in Scotland where defiance lasted for a certain period but then came to an end.
I repeat that the only reason for the presence of Clause 19 in the Bill is its retrospective effect. Its substance is al-ready about to come into force next month under another Act, at about the same time that this Bill is expected to receive the Royal Assent. Therefore, there can be no reason for the clause other than this retrospective application to the actions of certain councillors two years ago. I ask all noble Lords who believe in the rule of law to support me in pressing for the deletion of the clause.
Lord STRATHCLYDE: I should like to support my noble friend Lord Campbell of Croy in what he has just said. It seems to me that the question which arises is: when is a law not a law? One breaks the law and then people who are one's friends come to power and they alter the law to one's advantage. I entirely agree with my noble friend in believing that something ought to be done if the monetary penalty is more than the councillor concerned can possibly pay. Something should be done to avoid that, but I should have thought that a much fairer way of dealing with the matter would simply be to disqualify the councillor concerned from serving as a local councillor for a period. That would certainly get rid of the difficulty of his not being able to pay.
This is an extraordinary situation and I do not know that it has a precedent. Is there a precedent for a case where a legal duty has been put upon people who refuse to carry it out and a pronouncement has then been made against them in the courts? Is there any precedent for that being overturned by the succeeding Government, which happens to be sup-ported by those people who have been either disqualified or fined for this action? I think that this is a very serious matter indeed and I hope that the Government may think again about it.
Baroness ELLIOT of HARWOOD: I should also like to support my noble friends Lord Campbell of Croy and Lord Strathclyde. The clause introduces a very unfortunate attitude towards the law and towards the penalties which the law enforces. Nobody likes having to pay fines which are enforced by the law, but

35
we do so because, on the whole, we are fairly honest and because, though the law may be something we do not like, we are all part of the same community and we accept the decision of the duly elected Government of the day.
I have here a list of seven burghs in Scotland which are affected by this retro-spective legislation, if it may be so called, or by the events which led up to the clause which the Government have put into the Bill. I think that it is a bad example and that it is a bad thing to do. I believe that it creates a precedent which none of us on either side of the House wants to see established. I believe that it is a great mistake and I hope that the Government will take the matter quite seriously and will agree to what my noble friend has proposed.
Lord HUGHES: If I may, I should like to take up the last words of the noble Baroness, Lady Elliot of Harwood. I would say that the Government have taken this matter very seriously indeed. Indeed, if one looks at another part of the Bill, if the Government had, in the words of the noble Lord, Lord Strathclyde, been acting in support of people whose friends they were and whom they felt under an obligation to help, they could have done this in a much more devious way. Had the Government wished to be devious in a difficult situation, they could have got themselves out of a great deal of difficulty on another Bill just by refraining from bringing a defect in legislation out into the open as they are doing in this Bill.
In this case the situation is not as the noble Lord, Lord Strathclyde, has very much over-simplified it. He referred to councillors who had been fined. There was only one local authority in Scotland where that took place—in Clydebank. But there were many authorities who did not immediately implement the 1972 Act, and the amount of money involved was very much greater than the money in-volved in Clydebank. The total involved was over £4 million in lost rents, but only £1·4 million of that is covered by the interim reports from the auditors. So with regard to the authorities who have lost some £2·6 million of rents, there is nothing in this Bill, or in the existing legislation, which enables anything to be
36
done with them. Because the auditors have not reported, no action is being taken in respect of any of these authorities. Therefore we have the situation that the Secretary of State has, first, removed from his consideration the greater part of the people concerned be-cause the auditors have taken no action. What reason the auditors may have had for this is a matter for their professional judgment, but obviously there have been two standards of decision taken by the auditors, which have landed certain of them before the Secretary of State.
The noble Lord, Lord Campbell of Croy, again referred to this—as he did on Second Reading—as the Caledonian Clay Cross. It was certainly a nice phrase, guaranteed to hit the headlines— and it did. But there is no parallel between what took place in Scotland and what took place in Clay Cross. As the noble Lord himself indicated, the situation in Scotland was totally different. Therefore I do not know how he can refer to anything in Scotland as being a "Clay Cross", when in fact nobody "did a Clay Cross" in Scotland. However, it was an interesting phrase to use.
The noble Lord went on to argue that because the Housing Finance (Special Provisions) Bill which the Government had introduced in another place removes the disqualification incurred by Clay Cross councillors, though not the surcharge which was imposed upon them, it must therefore be the purpose of Clause 19 to remove the liability of Clydebank councillors to surcharge because of the fine imposed on that council by the Court of Session. Clause 19 has nothing what-ever to do with Clay Cross, of which there is no equivalent in Scotland, and it has very little to do with the Housing Finance (Special Provisions) Bill which had been framed against a totally different procedural background. I therefore propose to confine my remarks to Clause 19 itself and to the Scottish situation with which it is intended to deal.
I do not know where in Clause 19 noble Lords opposite find retrospection. The interim reports to which the clause is specifically made to apply are about losses which local authorities are said to have incurred according to what, in the opinion of the auditors concerned, was the negligence or misconduct of the persons named in the reports. If conduct

37
amounted to negligence or misconduct at that time, Clause 19 does nothing to make it otherwise. If there was a loss, Clause 19 does not diminish it. If there was a liability to surcharge in the event of the report being upheld, Clause 19 does not extinguish it. The sole change made by this piece of legislation is to confer on the Secretary of State a duty to have regard to all the circumstances of the case and a power to modify the amount of surcharge, or to abstain from making it. Since the need for that power arises out of the situation we inherited from the previous Administration, we have thought it proper to insert in the clause a date which makes explicit our intention of dealing under the new power with all interim reports arising from the non-compliance by some authorities with the Housing (Financial Provisions') (Scotland) Act 1972. I can see nothing wrong with that. By putting this pro-vision into the 1973 Act—the Local Government Act—the then Administration made it possible that if any of the new authorities elected after 16th May do something of this kind, the Secretary of State will be able to take all the circum-stances into account to decide whether they should have to pay by surcharge for the whole amount involved; or whether they sould be surcharged for a modified amount; or whether they ought not to be surcharged at all.
If it was considered that this were a desirable amendment to make for future authorities, where the offence might be exactly the same as the one committed by the existing authorities, then quite frankly I can see nothing wrong in deal-ing with the existing authorities on the same basis as that on which the new ones are to be dealt with. Let me re-mind your Lordships of the amounts. The noble Lord, Lord Campbell of Croy, and, I think, the noble Lord, Lord Strathclyde, also spoke about the possibility that the people concerned might not be able to pay the full amount of the surcharge which would have to be levied on them in terms of the present law. It varies from about £3,000 to £15,000 per councillor, without any relation to the obduracy of the particular council. Some authorities refrained for a fairly short time from operating the law. Others held out for a much longer period. But as the noble Lord, Lord Campbell of
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Croy, said, every one of them eventually implemented the law. So the period varies enormously, but it was not necessarily those authorities who held out for the longest time who will be involved in the largest possible surcharges. What-ever view we make take about the rule of law and the proper consequences of opposition to any particular enactment, the result produced by allowing the report and surcharge procedure to run its course under Section 201 of the 1947 Act clearly would have been impracticable and unsatisfactory.
Does anyone believe that at the end of the day operating the existing law will save the ratepayers of Scotland any j money at all? In most cases no money will be recovered from the councillors, because if a surcharge is made for the full amount, when the attempt is made to recover the money—with all the costs involved—the councillors will be rendered bankrupt. The consequences of bankruptcy will be to impose a disqualification. Therefore it is quite obvious that we shall not get anything other than a fraction of this money. This can be obtained much more simply by giving the Secretary of State the power to take all the circumstances into account and to surcharge an amount which could be reasonably expected to be recovered in the circumstances of the case, so that the money is got at the least possible expense to those concerned.
If the noble Lord, Lord Campbell of Croy, is more interested in extracting the last pound of flesh from the councillors concerned, we could go to Section 201 and place the Secretary of State in the position that he may have to say that the full surcharge has got to be made. The noble Lord has his remedy for that. He says, let there be a Bill of indemnity at the proper time, but it would not be a Bill of indemnity—it would be a whole series of Bills of indemnity, because the question could not arise until we reach the position of the individual councillor. That would be when he was in the process of being declared bankrupt, or had been declared bankrupt. When we were considering off-shore oil installations and the changes in relation to inalienable land, reference was made in the course of the debate in your Lordships' House to interfering with the procedures of the courts and taking powers away from the

39
courts. A Bill of indemnity would in certain cases have the effect of saying that certain councillors who had been declared bankrupt were by an Act of Parliament declared to be no longer bankrupt.
I cannot think of any greater interference with the rule of law than that proposal would contemplate. To have a whole series of bills, each one of which would have this effect would seem to me to be the most nonsensical way of dealing with this situation. If there were any possibility that the present procedures could be carried out without unfairness or hardship, and that it would result in a recovery of funds to the ratepayers, then I would certainly accept that the present law should continue unchanged. But what I am quite certain about is that no Secretary of State for Scotland is going to make a complete fool of himself, as would be involved in adhering to the existing principle of going through the farce of surcharging a railway guard or a school teacher for the sum of £20,000, and then expect anybody to feel that he had acted unreasonably when the procedure of bankruptcy took place. Neither I nor any of the Ministers in the Scottish Office have ever advocated—and do not at this stage advocate—the breaking of the law. Obviously, at any given time there are laws which people dislike and there are laws which a great number of people may dislike at the present time; but in a democracy there are methods of dealing with this properly. These people in most cases were well-meaning, totally misguided and, in some cases, stubborn in the extent to which they carried out their misguided conduct; but I think that it would be totally wrong to do what the noble Lord, Lord Campbell of Croy, is suggesting should be done.
I do not intend to speak at much length on this matter, because I recognise that the noble Lord, Lord Campbell of Croy, has made up his mind in advance and that the Committee are going to divide on this. I have not asked my friends to be whipped on this. I know very well that this is a matter of pure political argument and has nothing whatever to do with the merits of the case. I know, therefore, that in due course your Lord-ships will take this clause out of the Bill, and I am certain that another place will
40
recognise that it would be a piece of stupid folly to allow that to continue. Therefore I rest in the hope that another place will have more sense in this matter than is likely to be displayed here on this matter.
Lord DENHAM: Order!
Lord HUGHES: Would the noble Lord be kind enough to say how I am out of order?
Lord DENHAM: Is the noble Lord suggesting that your Lordships' House is not going to show any sense in this matter? It seems to me to be a very odd reflection on this House.
Lord HUGHES: Not at all! In the first instance, I did not say that your Lordships would not show any sense; and even if I had said that, it would not have been out of order. What I said was that I hope that the other place would show more sense. If English means any-thing, that simply means that the degree of sense to be exercised on this matter in this House is less than what I would expect to be the case in the other place. If the noble Lord is attributing less intelligence to this House than I am imputing, then he is to be brought to order and not I.
At the end of the day these things have to be decided on a logical and reasonable basis. I suggest that it is totally wrong that the Secretary of State should be asked to rely upon Section 201 of the 1947 Act and to treat it in exactly the same way as previous Secretaries of State did in matters where the amounts were not nearly so great but where the principle was the same. When local authorities in Scotland, for limited periods, defied the Government of the day in connection with milk charges, Section 201 was not invoked to bring about a surcharge. No surcharge was made under these provisions. No surcharge was made on the Dundee Corporation following a rents provision earlier on, because it was decided then that to apply Section 201 would not be a reason-able way of dealing with the situation. I submit that it would not be a reasonable way of dealing with it in the present situation; particularly when more than half of the councillors involved are those whose offence is the same as those who have been reported by the auditors. I

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therefore think that the Secretary of State should be given the measure of discretion in relation to these councillors that he will have in the case of any councillors who are in Office after May 16th.
4.25 p.m.
Lord HARMAR-NICHOLLS: I do not think I should have reacted to this if it had not been for the speech that the noble Lord made in defence of it. All I know about this case is what I read and heard on Second Reading and what is happening now. But the noble Lord, Lord Hughes, must recognise that there is much more to this than the actual payment of money and whether or not people can afford to pay. The rule of law is involved here. He said that it was not retrospective action that was being taken; but in explaining his opposition to my noble friend's proposition of removing the clause, he said that this would be putting people who had done something in the past in the same position as people who might do it in the future. There may be good reasons in logic for wanting to do that; but it is retrospective action on behalf of the Government.
His other argument was that if the law as it was when this fine was imposed remains, it would send people bankrupt. Is the noble Lord suggesting that all the people who are sent bankrupt because they have to pay fines imposed on them should have retrospective action taken, and they need not have to fulfil their obligations? When operating the tax laws many people are sent bankrupt because of misdemeanours which have been found out and for which they are fined. This is the beginning of something which would be stupid in terms of trying to run a sensible, commonsense Government in relation to these things.
Nor do I think he ought to resist my noble friend's suggestion that the Minister should decide what he wants to do under the existing Acts and then explain it to Parliament before he does it. I quite understand that under the circumstances, it would be a good thing for the Minister to be able to take account of all the circumstances and give a decision which may ameliorate the hardship that the size of these fines brings about. It may be that that would be sensible, but let the Minister explain to Parliament what it is that he has decided and why he has
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decided it. Let him explain how he arrived at the decision which may be imposed and which may be better than the existing situation. But I do not think it is a good thing, in trying to run this country or any other country living under the rule of law, to give these powers lightly. It is all very well for the noble Lord, Lord Hughes, to say that this has no relation to Clay Cross, but the juxtaposition of the two must not be ignored if one wants to be sensible in these matters in terms of public reaction. There is too great a similiarity between the situations for ordinary people who do not delve into the matter not to be able to say that it looks as if they are the same. I believe that Parliament has a duty to face up to any misapprehensions that people may have.
I would suggest that this clause ought to be withdrawn and the Minister ought to be prepared to ask in a more detailed form for the responsibilities that this clause as it now exists would give him; but to use those responsibilities when he explains to Parliament what judgment he has come to and what conclusions he recommends. Finally, I am rather sad that the noble Lord referred to the milk precedent, which bears no relation at all to this situation. We know that, as regards the milk precedent, powers had already been given to the Minister to make these decisions, as is the case in many instances in legislation we pass through both Houses. There is no relationship at all to wanting deliberately to bring about this retrospective legislation in order to do what may be the proper thing; but in doing it, if you are to undermine respect for the law, that is much more important than the size of the fine, which can be dealt with in another way.
Lord HUGHES: I must come back, because I spoke too soon in relation to interventions of Peers from South of the Border. I cannot say that the last contribution was intended to be helpful to me. I notice that the noble Lord, Lord Denham, who had been so susceptible to my use of the word "sense" did not feel it necessary to call his noble friend to order when he described the Government action as stupid. Obviously, it is not what is said; it is who says it that determines whether one is in order in this House in the mind of the noble

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Lord. It is not necessarily a very good way of maintaining order in this House that one should differentiate between the two sides of the House. That is by the way.
The noble Lord, however, unfortunately showed that in thinking of these matters in English terms he put himself out of proper consideration because he was not comparing like with like. When he says that, if the Secretary of State wishes to exercise discretion in these matters, he should, in doing so, come to the House to explain what he is proposing to do, this is what could be done if Clause 19 remains in the Bill. It can-not be done if it is taken out. The Secretary of State has no discretion in the matter and therefore he cannot come to the House and say, "This is why I am proposing to exercise a discretion", because if this clause is taken out there will be no occasion for him to do so.
Lord HARMAR-NICHOLLS: My noble friend suggested he should take the powers under a separate application to the House, and that is what I am suggesting, too.
Lord HUGHES: But that is not what the noble Lord suggested. The noble Lord suggested an Act of indemnity. I pointed out that the Act of indemnity would relate to a particular councillor or group of councillors who had been dealt with at a given time. There might be three, four, 10 or 20 separate Acts of indemnity. We would have to have a whole Session of Parliament devoted to indemnify Scottish councillors.
Several Noble Lords: Nonsense!
Lord HUGHES: It is not nonsense! This is the advice that I have been given from the people who would have been advising the noble Lord, Lord Campbell of Croy, if he had been in Office, and who presumably gave the Secretaries of State advice on the matter on milk. The noble Lord said that it was not a question of money. But the only difference between milk and the powers in the Act to reform housing in Scotland was the amount of money involved. The Secretary of State on that occasion, and on a previous one, exercised the only discretion which he had under Section 201, not because of the amount of money which
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was involved, but because, having taken the circumstances into account, he considered that he could properly decide to make no surcharge. If he had felt that instead of surcharging for £100 or £200 or £20 he would have surcharged for only £5, he could not have done so. The Act, as it stands, says all or nothing. Although the principle was exactly the same, authorities had not carried out the law laid down and the then Secretary of State decided it was proper not to make any surcharge at all. It applies to people North of the Border as well as South, and it is better for people to be fully acquainted with the facts before intervening.
Lord CAMPBELL of CROY: Perhaps I ought to speak again soon after the noble Lord, Lord Hughes, because he clearly missed some of the words I used in moving that this clause should be deleted. Those words were carefully chosen and I am sorry that he did not note them. I was not suggesting—and he was apparently putting these words into my mouth—that individual councillors should be surcharged £20,000. He gave that as an example. I specifically stated the opposite, that if the surcharges when arrived at, were such as to be ruinous to an individual councillor, then of course we would not expect them to be followed through. I was not charging the Government with being devious; far from it, the Government are being only too obvious in what they are doing here.
Secondly, I also made it clear that the situation in Scotland is entirely different. Every time I have spoken on this subject I have made that clear. Of course it is different and it is not as bad. That is another important part of my argument. Although the councillors at Clydebank were fined by the court a figure of £20,000, if I remember rightly, they did not go on defying the Scottish Housing Act. They ended their defiance. The Clay Cross Councillors did not do so— they continued. If they are to be pardoned to some extent, in as much as their disqualification is to be ended, then certainly the Secretary of State for Scot-land, in using discretion here, must pretty well let off the councillors in Scotland. That is clear from the publication of what I call the Clay Cross Bill, the Bill for England and Wales.

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The noble Lord has put words into my mouth which I did not utter. This clause would not be in this Bill if it were not for the fact that certain councils in Scot-land behaved as they did two years ago in failing to carry out the Scottish Housing Act. That is the reason why the clause is there. I made no reference to a succession of indemnity Bills—I do not think anything like that is necessary. What I said—and the noble Lord seems to have missed this—is that when the surcharges and fines have been brought to a conclusion, the moment when this goes to the Secretary of State and when, under the clause as drafted, he will have discretion to do as he likes, the Government ought to come to Parliament with proposals or recommendations as to how the surcharges or fines might be alleviated. Parliament could then decide, in the same way as we would expect them to decide in the case of English councillors in a similar position, what should be done; not necessarily that any individual councillor should be bankrupted, or that this large amount of money should be paid back—we know that is impossible. We do not think it right that this clause should be slipped into a completely inappropriate Bill to deal with something which happened two years ago. To say that it has no relation to Clay Cross is wrong. This is the Scottish counterpart. The systems are entirely different. What happened in Scotland was not as bad; none the less, it is the counterpart of the Clay Cross Bill in England.
My noble friend Lord Harmar-Nicholls pointed out that this is a question not of money but of how Parliament should deal with a situation where its laws have been flouted. It is clear from statements made in another place that there are a number of Members of the Labour Party who are most unhappy about the action being taken under the Bill for England and Wales and its equivalent here. I do not know whether that has anything to do with what the noble Lord said about his side of the Committee not being whipped today. It is rather surprising; he must have known—
Lord HUGHES: We are not being whipped today, because I do not believe in putting my colleagues to unnecessary trouble. It would be a waste of time
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asking for a whipped vote in this Committee, when I knew in advance that noble Lords opposite, irrespective of any-thing which was said, would divide. In the ordinary course of events, whether we have a three-lined whip, a two-line whip or no whip at all, the composition of this House is such that when the noble Lord on the Front Bench opposite asks his noble friends—and I hope I am not interrupting a private conversation on the Front Bench opposite—to follow him into the Division Lobby on a political Motion, we know what will be the result. It is because of that, and not because of any doubts I had regarding what my noble friends behind me would do, that I did not ask for a whip on the Bill. I should be totally astounded if any noble Lord on this side of the Committee did not follow me into the Division Lobby; but I did not ask for anybody to come here specially for the purpose of forming part of the minority.
3.38 p.m.
Lord CAMPBELL of CROY: I am sure that we are all very grateful to the noble Lord for his explanation and expansion of his earlier remarks. But my point is that this is not a political issue. This is a Constitutional issue and a Parliamentary issue.
Several Noble Lords: Oh!
Lord CAMPBELL of CROY: Certainly, members of the noble Lord's Party opposite in the country and in another place have made it clear that they are most unhappy about the action which the Government are taking in this clause and in the Bill for England and Wales.
Lord HUGHES: If I may interrupt the noble Lord again regarding the justification for that remark, I can say that, so far as I know, no one in my Party has made any representation to any Scottish Minister on this matter; and certainly no one has made any representation to me about being unhappy. I should like to know why the noble Lord says that members of the Labour Party are unhappy about what is being done in the Scottish Bill.
Lord CAMPBELL of CROY: I was thinking of a certain Member for an English constituency—who, of course, I would not quote in this place—who has

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made it perfectly clear in the other place, as have others outside the House, that they are unhappy about this retrospective effect, because it is wrong that councillors should not face the consequences of their actions as they were at the time when they took those actions. The noble Lord referred to the milk situation. That is different. I am speaking about Scotland in this case; I am not familiar with what happened in England and Wales as I have not looked it up. But in Scotland all the local authorities very quickly carried out the law regarding milk. I was able to use Section 201 as it should have been used in that case. There was no question of surcharges. There were some misunderstandings about exactly how the law should be carried out. But all the Scottish local authorities were carrying it out within a very short space of time, and therefore I was able to make sure that there were no surcharges in that case.
But that is entirely different from this housing question. I will not go into the merits because we debated them quite recently in connection with the Scottish Housing Bill. But there was open defiance by certain councils, and in particular by the Clydebank Council. It is clear that Clause 19 has been inserted into this Bill incongruously in order to allow the Secretary of State to take the same sort of action as will be taken in regard to equivalent councillors in England and Wales. We believe that is wrong, and that at the end of the day this situation requires the Minister concerned to decide what his recommenda-tion to Parliament should be and then to go to Parliament, which will, I am sure, deal with this matter not only humanely so far as the individual councillors are concerned, but also practically, without a succession of Bills, as the noble Lord has suggested. I therefore ask my noble friends to support me in pressing this Amendment.
Lord WYNNE-JONES: I think my noble friend Lord Hughes is wrong in thinking that this Chamber has already made up its mind. I have much more confidence in your Lordships than that. I believe it is right and proper for this Committee to consider these matters carefully and thoroughly, and to decide
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what is in the best interests of the whole community.
This clause deals with how local councillors carry out their business. I think it has always been the hope and the intention of Parliament that local councillors should be free and untrammelled in reaching their conclusions. If a local councillor is subject to penalties because he does something he believes to be correct, true and proper, then I believe we are entirely subverting local councils if we deny them that right. I believe it is proper that a local councillor should reach his decision because he believes that what he is doing is right. If it so happens that in doing that he breaks some law or renders himself liable to some penalty, then surely that ought to be subject to further survey by the Minister. It seems to me that is all this clause proposes. It proposes that if a councillor has done something which apparently is against the law, or apparently makes him liable to some heavy penalty, the Minister is entitled to look at the conditions and say: "I do not think this penalty is appropriate, because it could result in this particular councillor being subjected to an unendurable penalty merely because ho has done something he believes to be right."
Is that really what we want? Do noble Lords on the Opposition Benches want to destroy local government or to take steps which would make it absolutely punitive for a local councillor to carry out certain things he believes to be right? While we may all take risks, they should be commensurate with the possibility of our meeting them. That is what this clause says: that the Minister is entitled to look again at the position and decide whether a penalty is right or wrong. I personally find nothing wrong with the clause; on the contrary, I find it utterly admirable. It seems to me that this policy ought to be written in throughout our legislation; in other words, that there should be no penalty imposed which it is beyond the power of the individual to pay. I cannot really understand why my noble friend thought that members of this Committee would dream of voting against this clause.
Viscount AMORY: I would like only to give a courteous reply to the noble Lord, Lord Wynne-Jones, who is always

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so courteous himself, and say that the attitude of many of us on these Benches may be summed up in one sentence. We think it is the duty of members of local authorities to carry out their functions in accordance with the provisions of the laws as they stand.
Lord MOYNE: If I may introduce an Irish note into a Scottish matter, I think that we should oppose this clause because we should be opposed to future retrospection. Although ignorance of the law does not excuse, I feel it can lead to forgiveness. While I am sure a merciful line should be taken, this should come in separate legislation. I believe it is wrong to say for the future that what is proposed in the Bill should be allowed. Therefore
I would support the Opposition in feeling that we should reject future retrospection.
Lord HUGHES: If I may intervene very briefly, the noble Lord has over-looked something which both the noble Lord, Lord Campbell of Croy, and I have pointed out; namely, that for the future it is unnecessary to do anything. The law is already changed as from 16th May, and what we are proposing to do is to make the same change up to the 16th May.
4.48 p.m.
On Question, Whether Clause 19 shall stand part of the Bill?
Their Lordships divided: Contents, 49; Not-Contents, 92.

CONTENTS

Ailsa, M.

Harris of Greenwich, L.

Popplewell, L.

Beswick, L.

Henderson, L.

Segal, L.

Blyton, L.

Houghton of Sowerby, L.

Slater, L.

Brockway, L.

Hughes, L.

Stedman, B.

Bruce of Donington, L.

Jacques, L.

Stewart of Alvechurch, B.

Buckinghamshire, E.

Janner, L.

Strabolgi, L. [Teller.]

Champion, L.

Lee of Newton, L.

Summerskill, B.

Cooper of Stockton Heath, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

Crook. L.

Lloyd of Hampstead, L.

Wallace of Campsie, L.

Davies of Leek, L.

Longford, E.

Wells-Pestell, L.

Douglass of Cleveland, L.

Lovell-Davis, L.

Wigg, L.

Fisher of Rednal, B.

McLeavy, L.

Willis, L.

Gaitskell, B.

Maelor, L.

Wilson of Radcliffe, L.

Gordon-Walker, L.

Melchett, L.

Winterbottom, L. [Teller.]

Greenwood of Rossendale, L.

Milford, L.

Wootton of Abinger, B.

Hale, L.

Pannell, L.

Wynne-Jones, L.

Hamnett, L.

NOT-CONTENTS

Aberdare, L.

Elliot of Harwood, B.

MacLeod of Fuinary, L.

Airedale, L.

Emmet of Amberley, B.

Mancroft, L.

Alexander of Tunis, E.

Erskine of Rerrick, L.

Margadale, L.

Allerton, L.

Essex, E.

Merrivale, L.

Alport, L.

Exeter, M.

Mersey, V.

Amory, V.

Ferrers, E.

Molson, L.

Amulree, L.

Fraser of Kilmorack, L.

Monck, V.

Arran, E.

Glenkinglas, L.

Mowbray and Stourton, L.

Balerno, L.

Goschen, V.

[Teller.]

Balfour of Inchrye, L.

Greenway, L.

Moyne, L.

Balniel, L.

Grenfell, L.

Newall, L.

Belstead, L.

Gridley, L.

Northchurch, B.

Berkeley, B.

Grimston of Westbury, L.

O'Neill of the Maine, L.

Boothby, L.

Hailsham of Saint Marylebone,

Powis, E.

Brooke of Cumnor, L.

L.

Radnor, E.

Brooke of Ystradfellte, B.

Harmar-Nicholls, L.

Rankeillour, L.

Cairns, E.

Harvington, L.

Roberthall, L.

Campbell of Croy, L.

Hawke, L.

Ruthven of Freeland, Ly.

Clifford of Chudleigh, L.

Howe, E.

St Aldwyn, E.

Cork and Orrery, E.

Hylton-Foster, B.

St. Davids, V.

Cottesloe, L.

Kilmarnock, L.

St. Helens, L.

Cowley, E.

Kimberley, E.

St. Just, L.

Craigavon, V.

Lambert, V.

Selkirk, E.

Crathorne, L.

Lloyd of Kilgerran, L.

Sempill, Ly.

Daventry, V.

Long, V.

Sharpies, B.

Denham, L. [Teller.]

Lonsdale, E.

Strang, L.

Drumalbyn, L.

Lyell, L.

Strathclyde, L.

Dundonald, E.

Macleod of Borve, B.

Tenby, V.

Teviot, L.

Vernon, L.

Ward of North Tyneside, B.

Thurso, V.

Vivian, L.

Wigoder, L.

Tranmire, L.

Wakefield of Kendal, L.

Young, B.

Trefgarne, L.

On Question, Motion agreed to.

Resolved in the negative, and clause disagreed to accordingly.
Clauses 20 to 34 agreed to.
Clause 35 [General interpretation]:
4.56 p.m.
Lord HUGHES: I spoke to Amendment No. 16 when dealing with No. 1. I beg to move Amendment No. 16.
Amendment moved—
Page 28, line 27, at end insert ("" the Assessor" means the Assessor of Public Undertakings (Scotland); ").—(Lord Hughes.)
Lord HUGHES: I beg to move Amendment No. 17 as printed. As there may be more than one valuation appeal committee for a valuation area, it is necessary to ensure that the decision of any such committee can be a relevant decision in terms of the definition of "material change of circum-stances". This is what the Amendment accomplishes, and I beg to move.
Amendment moved—
Page 28, line 33, leave out ("the") and insert (" a ").—(Lord Hughes.)
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 18:
Page 28, line 35, after ("situated") insert (" and a change in annual output of minerals ").
The noble Lord said: This Amendment proposes that where minerals are concerned the previous year's output should be the criterion for assessing annual value. This would mean reverting to the system which operated in Scotland before the 1956 Act. It is also the system which is operating at present in England and Wales. But I understand that the courts have now pronounced in Scotland that a change of output is not a "material change of circumstances"—the magic words used in the Bill. There is to be no alteration between five-year revaluations unless there is a material change of circumstances—the formula used in the Bill. This could produce unfair results. Assessors and mineral undertakers in
52
Scotland would, I understand, prefer the system proposed by this Amendment.
If I may give one example, there can be fluctuations in the working of mineral sites. If, taking one year or two years, road works of considerable magnitude are undertaken in an area, there could be a great demand for certain minerals, and then there could be a falling away for the next two or three years with perhaps very little working of a quarry. The new arrangements in this Bill which I have mentioned—no alteration between the five-year revaluations unless there is a material change—can lead to unfairness as between the different mineral under-takers, and we hope that this change will recommend itself to the Government. Again, as with earlier Amendments, if the Amendment itself does not seem to be suitable, I hope that the Government will improve it and produce one of their own at a later stage.
Lord HUGHES: I agree right away that this Amendment is designed to achieve a more realistic assessment of mines and quarries, which are particularly difficult subjects to value. If they cease production, they have to be taken out of the valuation roll altogether; then they have to be put back if they are restarted. Equally, their output can fluctuate markedly in a short space of time. I think that the point to which the noble Lord, Lord Campbell of Croy, referred is the decision in 1958 of the Lands Valuation Appeal Court. In the Cloybank case, which is not related to the previous discussion although there is some similarity of names, they rejected a submission that an increase in output should be treated as a material change or circumstances. The Amendment seeks to establish that it should be so treated. It may be felt that this will ease the task of the assessor because he will be entitled to keep a running check on the output and, there-fore, on the valuation of a mine or quarry, instead of regarding the valuation as fixed until the next revaluation or until it goes out of production. However, this would place mines and quarries in a position different from that of any other subject

53
valued by the assessor and would alter the principle which will apply to everybody else, that values, once established, should stand for the quinquenninum.
This is not a change which should be made in a hurry. I am not saying that it is a change which should not be made, but I am certainly saying that it is not a change which we should make in a hurry. As the noble Lord, Lord Campbell of Croy, has quite clearly indicated, it has nothing to do with reorganisation; it is a change in valuation methods. But the mining industry has not been consulted about it. It is a view which the assessors have put forward and there has been no opportunity to consult the industry about it.
May I point out, however, that there is an alternative approach to the matter. In Schedule 1, paragraph 7, mines and quarries can be valued according to formula instead of by conventional methods. These are all pointers towards not making the Amendment as it stands but rather for reviewing the position after the Layfield Committee have submitted their Report towards the end of this year. As I said earlier, in the reconsideration of valuation methods and principles there are a number of Amendments which might be desirable, but in relation to valuation we ought only to be dealing with those Amendments which are relevant to the local authority reorganisation on 16th May. To amend in advance of other things would have to be very care-fully considered, because it is at least doubtful whether the Amendment as it stands would be workable. If the matter went to the courts, we do not know how they would construe "annual output". Would it mean the output at any given time, expressed as an annual rate? In fact, output from a mine or a quarry can vary from month to month; it could vary, even, from week to week. If the assessor, having complained about the additional responsibilities that may be placed upon him, has to keep a running check on that kind of thing, the resultant situation could be very difficult.
I accept that it is a very tricky situation. It may well be that better methods of dealing with the matter in order to be fair both to the mine owner or to the quarry owner or operator and to other ratepayers require something different from what is possible at the present time.
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Once again, I think this is a matter where. to quote the noble Lord, Lord Campbell of Croy, we should be justified in waiting for the Layfield Committee.
Lord CAMPBELL of CROY: I am grateful to the noble Lord for his explanation of the Government's attitude towards this Amendment. Clearly they accept that there is a problem to be looked at. I only hope that we shall not have to wait a long time after the Layfield Committee have reported for anything to be done. However, in view of the sympathetic attitude of the Government, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord HUGHES: I beg to move Amendment No. 19 as printed. It is a technical Amendment which is designed to make it clear that the Local Government Scotland Act 1973 and other similar enactments are to be treated as valuation Acts. The 1963 Act contains a substantial block of important valuation provisions, but that Act is not explicitly declared to be a valuation Act. Unless corrected, this would have serious consequences else-where in the Bill. I beg to move.
Amendment moved—
Page 29, line 2, leave out (" and the Acts amending that Act") and insert (" the Acts amending that Act, any other Act relating to valuation ").—(Lord Hughes.)
Clause 35, as amended, agreed to.
Clause 36 agreed to.
Clause 37 [Short title, commencement, construction, savings and extent]:
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 20:
Page 29, line 26, at end insert (" Provided that the provisions of section 2(1)(d) shall not be brought into operation before 1st April 1976.").
The noble Lord said: I beg to move Amendment No. 20. There have been representations, of which I am sure the noble Lord and the Government will be aware, that in its rating effects Clause 2 should not come into force until April 1976. However, it is paragraph (d) of subsection (1) of Clause 2 which is the main cause of difficulty. This is the paragraph which gives effect to alterations in value due to material changes and circum-stances—again that magic formula to

55
which I referred in our earlier discussion. I hope that the Government, who should be fully aware of this, can make a move on it. This Amendment is probably the one best designed to bring it into effect. Two of the largest of the new Regions in Scotland, which will be new authorities in May of this year, are very concerned about it. Therefore, I hope that the Government will be able to accept this Amendment in principle, even if they may not be able to accept its wording.
Lord HUGHES: Although this is a view which has been put forward by the Assessors' Association, there has been no general support for it in Scotland, if one takes into account the number of regional authorities which are concerned. Undoubtedly, however, it is the case that the Strathclyde Region and the Lothian Region, who probably represent nearly three-quarters of the ratepayers in Scot-land, are concerned about the burden which it would place upon them. There-fore, while I cannot accept the Amendment, because it may be difficult to incorporate it as it stands, I am prepared to state that it is the intention of the Secretary of State that the commencement date for this part will be 1st April 1976. The Act makes provision for different commencement dates for different sections. Therefore, the noble Lord can be assured that the point which he wishes to make, to which he speaks on behalf of both of these regional councils and the Assessors, will be fully met by that undertaking.
It is desirable that we should not lay down in the Bill that there will be varying commencement dates and then pro-vide that one particular commencement date shall not be before 1st April 1976. Because of the peculiar way in which these provisions are worded, it would almost imply that everybody else would have a commencement date before 1st April 1976, and that is not necessarily the position. It may well turn out that that is what it is, but it is not necessarily what would happen. I can certainly undertake that this will not be brought into operation before the date which the noble Lord has mentioned.
Lord CAMPBELL of CROY: I regard that as a very clear interpretation and a statement which I am sure will be wel-
56
comed by those who were worried about the date of coming into effect of this sub-section, because the noble Lord has made it palpably clear that the effect of this Amendment will be carried out without it being inserted in the Bill. He mentioned that there had not been representations from many local authorities, but of course the two which he has mentioned are large and the others will also benefit (even if they have not raised the point) from the time which they will be allowed by the intention of the Government as just stated. I am grateful to the Government for having seen the point of this Amendment, and I now beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 37 agreed to.
Schedules 1 and 2 agreed to.
Schedule 3 [Borrowing and lending by local authorities and certain of their funds]:
5.11 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 21:
Page 45, line 35, leave out ("any enactment") and insert ("that Act").
The noble Lord said: I beg to move Amendment No. 21 as printed. This Amendment corrects a drafting error. Paragraph 27 of Schedule 3 disapplies the general borrowing paragraphs of the Schedule from local housing bonds issued under the Housing (Scotland) Act 1966 (which are secured against property as well as revenue), but the paragraph refers to the power conferred by "any enactment" to issue local bonds. The Amendment corrects this reference to make it clear that the disapplication relates to the power under the 1966 Act. I beg to move.
Schedule 3, as amended, agreed to.
Schedule 4 agreed to.
Schedule 5 [Matters not subject to investigation]:
On Question, Whether Schedule 5 shall stand part of the Bill?
Lord CAMPBELL of CROY: One of the matters which is not called to be dealt with and cannot be investigated under this Schedule is of course connected

57
with the administration of the Commissioner himself, and I wondered whether the noble Lord could tell us—I am sorry if this is rather short notice for him—if there is a remedy for those who wish to complain about the administration of the Commissioner and his staff or others connected with his activities.
Lord HUGHES: I am not certain that there is any provision in legislation for complaints against the actions of the Commissioner. After all, this is not the first time that we are having a Commissioner. We have a Parliamentary Com-missioner and a Commissioner for the Health Service, and presumably there are people who, if they get what they think is the wrong decision, will arrive at the conclusion that they have a right to complain about it. I think perhaps it would be carrying the right of the individual too far if we were to have a Commissioner to inquire into possible maladministration by other Commissioners because there would be no end to it. He himself would be regarded as having acted badly in that context, so—
Lord CAMPBELL of CROY: Perhaps I can give the noble Lord a little time to consider it.
Lord HUGHES: This was one I had not thought about, but the answer is that if the Commissioner behaves so badly as for it to be obvious that he himself is guilty of maladministration he could be removed by Her Majesty for mis-behaviour.
Lord CAMPBELL of CROY: I am grateful to the noble Lord for making that point, because this Schedule exempts the members of his office who might be complained about, and I am sure the Committee would be interested to know that if the Commissioner himself were thought to have committed some misdemeanour (which I am sure is most unlikely) he would be removed. But the question is whether the Central Government Commissioner, for example, has jurisdiction to look into complaints concerning the administration of the secretariat, and so on, of the local government Commissioner.
Schedule 5 agreed to.
Schedule 6 [Minor and consequential Amendments]:
Lord HUGHES: I spoke to Amendment No. 23 when I moved Amendment No. 5. I beg to move.
Amendment moved—
Page 49, line 33, at end insert—
("(c) after the words "such valuation" there shall be inserted the words "as contained in the direction ".")—(Lord Hughes.)
5.17 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 24:
Page 53, line 39, at end insert—
"The Teaching Council (Scotland) Act 1965 (c. 19)
28A. In Schedule 1 (constitution of the Council)—

(a) in paragraph 1(1)(b) for items (i) and (ii) there shall be substituted the following item—

"(i) four by the Convention of Scottish Local Authorities;";

(b) in paragraph 4(1) for the words "paragraph 5(3)" there shall be substituted the words "paragraphs 5(3) and 5A";

(c) after paragraph 5 there shall be inserted the following paragraph—

"5A. On 16th May 1975 each person holding office as a member of the Council who has been appointed by the Association of County Councils in Scotland or by the Scottish Counties of Cities Association shall go out of office; and any person, appointed as a member of the Council by the Convention or Scottish Local Authorities by virtue of paragraph 1(1)(b)(i) of this Schedule in respect of the period of office of members of the Council current at the date of the commencement of paragraph 28A of Schedule 6 to the Local Government (Scotland) Act 1975, shall hold office until 31st January 1979 inclusive."."

The noble Lord said: I beg to move Amendment No. 24 as printed. The purposes of this Amendment are to enable the Convention of Scottish Local Authorities—that is the new local authority body in Scotland—to appoint four members to the General Teaching Council for Scotland in place of the two members appointed by the Association of County Councils in Scotland and the two appointed by the Scottish Counties of Cities Association; to provide that any person, who has been appointed to the General Teaching Council by those Associations and who is holding offices

59
on 16th May 1975, should go out of office on that date; and to ensure that any person appointed to the General Teaching Council by the Convention of Scottish Local Authorities in respect of the cur-rent period of office of members of the Council should hold office only until 31st January 1979. There is nothing to pre-vent the Convention, if it so wanted, appointing the same four persons to the Council for the remainder of the current period. It is understood, of course, that not all of these people may wish to be re-appointed. I beg to move.
Lord CAMPBELL of CROY: Am I right in thinking that the reason for the introduction of this Amendment at this stage of the Bill is the coming into existence of the Convention of Scottish Local Authorities and its establishment fairly recently? I believe it is the single Convention which is to take the place of the four local authority associations in Scot-land, representing at present the cities, the counties, the burghs and the districts —districts in the old sense. Can the noble Lord tell us the present position of this new body? I was trying to get in touch with it fairly recently and I found that it had not yet got an address although its officers had been appointed.
The four previous local authority associations in Scotland have no doubt carried out functions which were extremely important for Scotland. They were able to represent the local authority bodies of the four categories in their dealings with the Government and in many other fields. Am I right in thinking that there is simply to be this one Convention taking the place of all of them, including the old district councils association, and can the noble Lord tell me whether this new Convention will be in operation on 16th May when local government starts in Scotland, or whether indeed it has already started? I can understand the difficulties in that the same individuals may well be carrying out their duties still in the old authorities—the four of them —Until 15th May, but clearly there will be a difficult hiatus period which all of us would wish to be as smooth as possible. If one wanted to get in touch with the Convention, is it already in operation? If not, will it be in operation immediately after 16th May?
Lord HUGHES: I cannot give the noble Lord, Lord Campbell of Croy, an accurate answer. A meeting is taking place today. A decision was taken earlier in the year after very prolonged consideration by members of the three different types of authorities—the Regions, the Districts and the Islands Councils. Eventually, they arrived at the conclusion that their interests would best be served by having a single authority. They decided to carry on the name of the oldest of the groups of local authorities, that name being "Convention". The chosen title is, the Convention of Local Authorities. They appointed their Secretary some time ago. If I am correctly informed, the new Secretary is the man who had hitherto been the Secretary of the County Councils' Association.
Invitations were then sent out to the various authorities inviting them formally to apply for membership of the Convention. When making my round of meetings with regional councils—the last one took place yesterday at Lothian—I was informed that a meeting is taking place today at which the Convention will form-ally come into existence with its member-ship known. When I say that I cannot give an exact answer, I do so because I do not know whether the meeting took place this morning or this afternoon, or whether it is still in process. However, I have no doubt that as from tomorrow-it will be possible for Government Departments and others interested to make the necessary contact with the Convention as an operating body.
Lord CAMPBELL of CROY: While being grateful to the noble Lord, Lord Hughes, and thanking him for giving us this latest information, I cannot resist congratulating the new body on retaining the ancient description of "Convention".
5.23 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 25:
Page 56, line 37, at end insert—
("46A. In section 125 (school and college councils), after subsection (3) there shall be inserted the following subsections—
" (3A) Notwithstanding any rule of law, a person in minority shall be eligible to be appointed as a member of a school or college council.
(3B) Without prejudice to the entitlement of a member of a school or college council

61
who is also a member of a body to which sections 45 and 46 of this Act apply to receive allowances under those sections, an education authority may pay to any member of such a council—

(a) in respect of his attendance at a meeting of the council, or

(b) in respect of the doing by him of anything approved by the authority, or anything of a class so approved, for the purpose of, or in connection with, the discharge of the functions of the council,

such allowances, in the nature of those payable under those sections as they think fit, being payments of such reasonable amounts as they may determine in any particular case or class of case and not exceeding the amounts prescribed under the said section 45 and specified under the said section 46 for the corresponding allowances under those sections.".")

The noble Lord said: This makes two separate additions to Section 125 of the Local Government (Scotland) Act 1973 which deals with school and college councils, by adding two new subsections to it. Both of these additions are designed not to make substantive changes, but to clarify the original intention. The first new subsection (3A) is designed to remove a doubt about the power of education authorities to appoint persons under the age of eighteen as members of school or college councils. These councils are a new concept in the Scottish educational system, designed to discharge management and supervisory functions given to them by the education authority. Their membership is largely unprescribed, but in view of the purposes for which these bodies have been created, education authorities have been recommended by the Secretary of State to consider, among other things, the advantages of appointing pupils. It is understood that most of them intend to do so.
The new subsection (3B) confers explicit power on local authorities to pay out-of-pocket expenses and, if necessary, loss of earnings allowances to members of school and college councils who are not members of the authority. It is clearly desirable that there should be a statutory basis for such payments. As I indicated, this is not a question of making new provisions, but of making it clear that what was intended can be carried out. In fact, there has been doubt about the position of a minor in Scotland. This makes it quite clear that a pupil can be appointed.
Lord HUGHES Lord HUGHES moved Amendment No. 26:
Page 57, line 24, at end insert—
("52A. In Schedule 23 (amendment of enactments relating to planning), in paragraph 2(b) for the words from "a general" to the end there shall be substituted the words" an islands or district council".")
The noble Lord said: Section 182(2) of the Local Government (Scotland) Act 1973 amends the Caravan Sites and Control of Development Act 1960 by requiring the functions of local authorities under Part I (except Section 24) of the 1960 Act to be functions of islands and district councils. However, the 1960 Act was also amended by paragraph 2(b) of Schedule 23 of the 1973 Act, to change the definition of "local authority" to mean a general or district planning authority within the meaning of Part IX of the 1973 Act. This contradiction in terms arose because of an Amendment made to Section 182(2) of the 1973 Act at the Report stage in your Lordships' House, whereby the present wording, "functions of islands and district councils" was substituted for the former "district planning functions". Unfortunately, no consequential adjustment was made to paragraph 2(b) of Schedule 23, and this Amendment removes the inconsistency.
Lord HUGHES: Amendment No. 27 is a simple drafting Amendment. I beg to move.
Amendment moved—
Page 57, line 27, after ("effect") insert ("and paragraph 9 of Schedule 1 to that Act is hereby revived ").—(Lord Hughes.)
5.27 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 28:
Page 57, line 30, at end insert—
("The Housing (Scotland) Act 1974 (c. 45)
54. In section 3 (conditions for approval of applications for improvement grant), in subsection (2)(c)(ii), for the words "last authenticated prior to" there shall be substituted the words "in force on".")
The noble Lord said: In connection with Amendment No. 27 I should per-haps have said that, although it was a simple drafting Amendment, by error there was removed from the Bill pro-visions which gave, among others, the National Trust and local authorities the

63
right to Parliamentary procedure. If we had wanted to be devious on this, we could have saved ourselves a great deal of bother on the offshore oil Bill, because the National Trust had lost the powers. But this was not the intention of Parliament, and the Amendment which we have just made corrects the situation. It is not right that Parliament should legislate by error.
Coming to Amendment No. 28, the purpose of this Amendment is to amend the definition of "rateable value" in Section 3(2)(c)(ii) of the Housing (Scot-land) Act 1974 to take account of the repeal in the Bill of Section 12 of the Lands Valuation (Scotland) Act 1854 which provided for the authentication of the valuation roll. I am quite certain the explanation is not clear, but that is all the story I have. I beg to move.
Lord CAMPBELL of CROY: While I shall not raise points on this Amendment, or on what was said by the noble Lord, Lord Hughes, in introducing it, I must add my own observation that I think it was prudent of the Government to ensure that that provision did not disappear in error. I say that because I am perfectly certain a ton of bricks would have fallen on his head from both the National Trust and the local authorities. The error would have been spotted before long.
Lord HUGHES: I am not so certain that that was the case. The error was spotted in the office. But I am quite sure that our attention would have been drawn to it.
Schedule 6, as amended, agreed to.
Schedule 7 [Repeals]:
Lord HUGHES Lord HUGHES moved Amendment No. 29:
Page 58, line 4, after (" 5 ") insert (" 9 ").
The noble Lord said: This Amendment repeals Section 9 of the Lands Valuation (Scotland) Act 1854 which confers a right of appeal against valuations. This right is now contained in Clause 3(2) of the Bill, so Section 9 may be repealed. I beg to move.
Schedule 7, as amended, agreed to.
House resumed: Bill reported with the Amendments.

PRICES BILL
5.30 p.m.
Lord JACQUES: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Jacques.)
House in Committee accordingly.
[The Baroness Tweedsmuir of Belhelvie in the Chair.]
Clause 1 agreed to.
Clause 2 [Regulation of price of food etc.]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 1:
Page 3, line 9, after ("above") insert ("otherwise than in retail shops with a selling space of less than 250 sq. ft.").
The noble Baroness said: I beg to move Amendment No. 1 and speak at the same time to Amendment No. 2. Although this Amendment is one to the Prices Bill 1975, it is similar in purpose to the one moved by my noble friend Lord Elton last July to the Prices Act 1974. The principle behind the two Amendments I am moving today is, as I say, similar to that moved last year; namely, to exempt small shops from the need to display notices giving the maxi-mum retail prices for subsidised foods, and, secondly, from the need to keep records which would facilitate the enforcement of price regulation Orders. When my noble friend moved his Amendment in the summer a practical difficulty arose over the definition of a small shop, and we are grateful to the noble Lord, Lord Jacques, for the definition of a small shop he gave on July 8th; that is, a shop of 250 sq. ft. or less. It is this definition that I have used in these Amendments. It will, therefore, be appreciated that I am talking about the very small shop, indeed the typical corner shop that one still finds in some towns, and quite frequently in the country.
I think we are all agreed on the great value and service of the small shop. In

65
the first place, it provides a neighbourhood service, and I emphasise the term "service", because what so many people feel now is that the community in which they live is breaking up, that they have nowhere they can go to see, quite by chance, people they know, as they can either in the corner shop or in the local pub. This service of the local shop is valuable in a world in which people feel the need for personal contact and attention, and an opportunity to meet their neighbours. It is valuable in towns, where, regrettably, it is disappearing, and in the country where it is useful for the elderly, who cannot afford a car, and where there is almost no public transport at all.
Small shops, because they are owned and worked by their owners, are frequently open during longer hours than the larger multiples. But small shop-keepers are finding themselves faced with a great range of very real practical difficulties today. To begin with, as self-employed people they are very worried about the new cost of the National Health Insurance stamps they have to pay each week. They are having to cope for the first time with VAT, introduced on sweets, soft drinks, crisps and all those commodities, which are, of course, very much the staple products sold by corner shops. They suffer from all the commercial disadvantages of being small and having to trade on a much smaller scale than the larger multiples and super-markets in big towns. So we feel that this latest addition, the need to display notices and the need to keep records, will be adding one more burden to people who are already working very long hours and are at the same time performing a very useful service to the community. I think it would be most unfortunate if this was a straw which broke a good many camels' backs, and if, as a consequence, we saw further disappearance of these very small shops.
Quite apart from the general principle of the value of the small shop, I am a little sceptical of the value of these notices in shops like these. In the first place, who will read them? I do not know how many shoppers, as it is, consult notices in shops giving maximum prices. I can see the reason for putting them there, but I suspect that most shoppers are far too engrossed in what they have to get
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and what the prices are to be looking at notices around the shop. But whether or not that is true, I think most people who shop in a corner shop will either be people going in for one item, and there-fore probably will not need to consult a notice at all, or people who are regular customers, who would not regard the shopkeeper as in any sense wishing to, as it were, "fiddle" them by charging them more than he should for a subsidised food. Even if the shopper does read it, I am not sure what it will mean to him. As I understand it, the notice can be in a form prescribed by Statute and yet the prices could be illegal if charged in that shop. Furthermore, in order to make sure that the shopper was not being "fiddled" the inspector would have to see that the prices were correct and were being enforced.
I quite see the reason, which I am sure the Government will give me, for the need to display notices. I imagine it is that, if there is to be a subsidy on foods, it is essential that the Government should know that the subsidy is to the shopper and is being used quite correctly, and that somebody is not making a lot of money from it along the line. I can see that this is an important principle. But what I am trying to show in the Amendments is that we have to weigh up the balance of advantage to the shopper, which may be a very real one in a big multiple in a large town, against the disadvantage to the small shopkeeper. Having to display these notices, and even more having to keep records, does mean for the small shopkeeper an extra burden on someone already working extremely long hours, and someone who, it is accepted by everyone, performs a useful service. So far as I know, there is no evidence at all of small shopkeepers "fiddling" their customers. On the contrary, there is usually a very good relationship of trust between the two. I think, therefore, it is most unlikely that customers would feel disconcerted by discovering that there was not such a form hanging on the wall of the shop. I hope for the reasons I have advanced the Government will be sym-pathetic in the case of these very small shops and the people who work in them, and that they will not have one more burden added to the many they already bear. I beg to move.
5.38 p.m.
Lord JACQUES: I would assume that, given food subsidies, it would be the policy of all Parties that there should be adequate safeguards to ensure that the money voted by Parliament is used for the purpose for which it was voted; and I would assume that it would be the policy of all Parties that the safeguards should apply to all sectors of the retail trade and not just to some. There is a very strong temptation to those who have to make the safeguards to use a rigid method, to simply fix prices, and that is the end of it.
We are fully aware that practically all retailers, including the small retailers, have their promotions from week to week or month to month, and that they negotiate with the manufacturer; he bears part of the cost and the retailer bears part of the cost, and they cut prices for a period. There was no reason whatever why the Government, who were providing some of the money for cutting the prices of essentials, should not have done exactly the same as the manufacturers do on other goods, and enter into consultations with the trade with a view to getting agreement on fixed prices, preparing a list of those prices and publishing them. That would have been very simple, and it would have made enforcement extremely easy. The enforcement officer would have been armed with a full list of the prices of subsidised foods, and the shopkeeper would have been able to keep a full list which he could produce on request, and display a short list of the best-selling lines. That would have been the end of the matter. The retailer would not have had to keep any records, and the enforcement officer would not have had to ask for any. He would just have had to make sure that the prices notice was displayed and that the prices charged were the same.
But we did not adopt this simple method, because we recognised that that would be unfair to the small trader. We know that the large concerns have buying power and can therefore buy more cheaply than the small trader. We also know that the larger the shop the lower are the personnel costs per unit of trade. Consequently, the small shopkeeper would again be prejudiced, because his shop was small and would have high per-
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sonnel costs. We also know that the retail margins reflect the differences in cost. In the small shops, where the costs are relatively high, this is reflected in a higher gross margin, and in the case of the larger shops where the costs are low there is a lower gross margin. Therefore, in order to be fair to the small trader we should take into account his difficulties, and we adopted this difficult but flexible method of margin control rather than price control. We are trying to protect the small trader not just by words but by deeds. This Amendment would frustrate our endeavour to use the flexible method of margin control which allows for the higher costs of the small retailer. It would compel us to use the more rigid method of just fixing prices and making the small trader live up to those prices.
Let us look at the Amendments. The first Amendment would exclude the small shops from the keeping of records needed for the enforcement of margin control; that is, for enforcement of the flexible method which we are using. The second Amendment would prevent the regulation of margins but not the regulation of prices, so that we would be able to use our rigid method but not the more flexible method of relating the control to the margin which reflects the costs. The second Amendment says that it would not exclude small shops from the requirement to display prices, but it would make it useless in their case by preventing us from specifying as to the place and manner of display. This is the most disturbing part of the Amendment.
My mind goes back to the time when the Conservative Government introduced the Consumer Credit Bill. At that stage, they expressed the philosophy that the retail customer should be told the truth, the whole truth and nothing but the truth—a philosophy with which we agreed. When the Bill was frustrated by the Election we had no hesitation in bringing it forward and putting it into law. We understand by that philosophy that the retail customer should be told the truth, the whole truth, and nothing but the truth, and we would include the customer who goes to the small shop as well as the customer who goes to the large shop. We feel that it is essential that in the small shop as well as in

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the large shop there should be a display of prices of those five commodities— and there are only five involved—for the convenience of the customers.
The second Amendment would do a third thing which has probably been overlooked. It would render it impossible for us to make supplementary provisions in the Orders; for example, to prohibit unreasonable charges. An example of an unreasonable charge is where two things are sold together. One is a subsidised food and it is sold as a twin with something else, and in that way the customers are overcharged. Or, in certain circumstances, a charge could include delivery costs. There is a provision in the Orders that no unreasonable charges of that kind shall be made, but since small shops would not be covered by these Orders we could not make a supplementary provision for these unreasonable charges.
We prefer to stick to our flexible method, because we think it is in the interests of the small trader, but we do not intend to desert those who have to use the small shop. As the noble Baroness said, it is often the elderly and the less mobile who use the small shops. We have no intention of deserting them in such a way as to allow the small trader, if he so wished, to absorb part of the subsidy into his profit margin, which would be possible if the Amendment were carried. Furthermore, we have no intention of allowing him to be completely free as regards price displays. It is as important that the customer should know the price in the small shop as that she should know it in the more affluent areas, where those who are mobile can go in order to buy their foods.
We intend to consult the trade as to the kind of information that should be kept for the purpose of enforcement of margin control. We hope to harness the best recording practices. Here, if I might digress for a moment, I would say that this would be as helpful to the small trader as it is to the customer herself. Small traders far too often fail because they are working in the dark. They do not know where they are going. There are simple ways by which the small trader can know where he is going, can know his position and, at the same time, can provide the information that is needed for enforcement. May I give a simple
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example? If a small trader keeps a record of his purchases at cost prices and of his selling prices he has a wonderful means of control. It is quite clear that at the end of a week or a month he can total up the cost and the selling values of the goods that he has. Beyond that, he can calculate the return and will know his approximate rate of gross profit, but he would not know that unless he kept such a record.
Furthermore, if he simply keeps a record of the cost and the selling price of his purchases, he can calculate his stock at any time. All he has to do is first to take his stock, calculate the selling value of his purchases, deduct the sales and the balance is the stock that he has left. He can reduce that to the cost price merely by deducting the margin which he has already ascertained. So that by the simple device of recording his purchases and his sales the small retailer has a wonderful means of controlling his business and knowing exactly where he is going. We do not intend him to go as far as that in keeping records for enforcement purposes, but that is the kind of thing that we— and, I hope, the Opposition—would like the small trader to do in order that he might keep in business and know just where he is going.
In consulting the trade on the enforcement records that are necessary, we shall consult not merely the trade in general but representatives of the small shop-keepers, so that their point of view is put forward. Furthermore, in this Bill we have taken power to provide that information on prices need not be displayed but shall be available for production on demand. It is our intention that the trader shall have a full list of prices of the varieties of subsidised foods available for production on demand. We intend that the trader shall display a short list only of the best selling lines of the subsidised foods. That list can be either typescript or printed. We are therefore going as far as we can to reduce the need for display to an absolute minimum.
I hope that what I have said will convince the noble Baroness that control by way of margin rather than by way of rigid price control is in the interests of the small trader, and that display of information to the customer is just as important in the small shop as in the large. In the light of that explanation I hope that she

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will feel able to withdraw her Amendments.
5.49 p.m.
Viscount AMORY: I think that my noble friend has done right to raise the question of the smaller trader, because in practice administrative methods are apt to be hard on him. I listened with great interest to what the noble Lord, Lord Jacques, said. I can see the point of the margin control as being more appropriate in this case. If I felt that the understanding the noble Lord, Lord Jacques, has shown of the difficulties and the problems of the small trader will be absolutely reflected through the Administration, I should be more comforted. It is certainly comforting to realise that what is pro-posed applies only, as I understand it, to five commodities at present. But I think my noble friend has been right to raise this matter; I agree so much with what she said. The Adminstration have to be watchful that they are not asking the small people to do more than they are capable of doing. It is difficult to define the small trader. I remember being intrigued by a definition given by an Opposition Front Bench speaker a few weeks ago when he said what he was thinking about was a shop which, on opening the door, it went "ping". That was a good description. In this case, I think my noble friend means to go beyond that and is suggesting that not all the doors she is thinking about would go "ping". Personally, I am glad that my noble friend has raised this matter and made the points she has in so able a fashion.
Baroness YOUNG: I thank the noble Lord, Lord Jacques, for his reply and the care which he has obviously taken. I am bound to say I am disappointed with it. Of course, I accept that to base this on the gross profit margin is a better way of dealing with the question of price control than simply to have a rigid price control. I should like to emphasise a point made by my noble friend Lord Amory. I believe we are talking about two different types of shop. I entirely accept his arguments for the larger shops and the multiples, and even what we might loosely describe as the "larger small" shops. In this Amendment we are talking about very small shops. What the noble Lord is suggest-
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ing, if I understood him, is that all these shopkeepers (and remember we are now talking probably about a man and his wife who run the business entirely between them, or perhaps just the man or his wife) shall have a notice setting out the five commodities and the variations of price control. They may be typed or printed. They must place one on the wall, keep one available for inspection by the public and must presumably keep them up to date, otherwise they will be useless. They must have the records available at any time for a customer to inspect. As he has suggested, what he has described is a very simple way of calculating their gross profit margins.
But one imagines the mythical Mr. and Mrs. Smith, who are perhaps running the corner shop, sitting down on Sunday night for hours dealing with books in order to get their calculations right. We are doing this because, as I understand it, the Government are afraid that the small shopkeeper may absorb part of the subsidy into his price and may be fiddling the customer—a suggestion of sharp practice of which, of course, we have no proof—or indeed because the trade may be, if I understood the noble Lord correctly, engaging in what are called "unreasonable charges" which might be delivery costs, although this was not explained. Some small shops do deliver groceries—a most useful function, as anyone who has had to struggle home with large amounts of shopping from supermarkets will know, and I should not think that a charge for a delivery was unreasonable. This point is not defined in the noble Lord's reply.
Again I think that this really suggests that shops could be indulging in some kind of sharp practice, of which we have no proof. Indeed, all the evidence is that the shops are widely used by just the elderly and the less mobile members of the population who have a relationship of trust between themselves and the shop-keeper. I should have thought it quite unnecessary to set up this enormous bureaucratic apparatus for these very small shops. I am disappointed with the Government's reply. However, this is not a matter that I intend to press this afternoon. I shall read what the noble Lord has said and I may well return to the matter on Report. In the meantime, I beg leave to withdraw the Amendment.
Baroness PHILLIPS: Before the noble Baroness withdraws, and while I am not questioning the Amendment I should like an answer from the Minister, if he can provide it, on a matter which is constantly put to me by consumers, concerning an article, particularly one in this subsidised group, which has another price put on top of the article already in the shop. Is this, or is it not, against the law?
Lord JACQUES: First I should like to comment on two of the points made by the noble Viscount, Lord Amory. I agree with him that great care has to be used by the Administration in attempting to supervise this matter in relation to the small shopkeeper. Provided that it is done I am sure that it will be generally agreed to be better than having the rigid method, since these variations in cost would almost certainly penalise the small trader. So far as the five commodities are concerned, here he is protected. First we have an agreement with the trade that so long as the voluntary agreement exists we would not seek to have the price regulation outside subsidised foods. But we have gone further. We were able to get a concession from the Secretary of State in 1974 concerning the Bill then before us. I gave an undertaking that we should not require the price regulations to be displayed by small traders in respect of nonsubsidised foods; that that would be provided for in any Order we made. The small trader would be completely exempt from displaying the price regulations of nonsubsidised foods. So he is protected there. We are not suggesting that a charge for delivery is an unreasonable charge. It could be reasonable or it could be unreasonable. We are not saying that to make a charge for delivery is unreasonable-that would be completely wrong. What we are saying is that if an unreasonable charge were made then it would be against the law. Obviously, if there was a charge for delivery of, say, 5p before any Orders were made, and that was increased to 50p, that would be unreasonable; or if a special charge was made where only subsidised foods were delivered, that could be unreasonable. But we are not saying that a charge for delivery is unreasonable. Delivery is not mentioned in the Orders. The supplementary provisions merely prevent any unreasonable charges.
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I am pleased to hear that the noble Baroness is to withdraw the Amendment at this stage. After reading my remarks I hope she will not find it necessary to reinstate it at Report stage. In reply to my noble friend I would say, first, that so far as subsidised foods are concerned, whether the old or the new price is the right one depends upon the margin, because it is mostly margin control. Whether it is lawful to put one price ticket above another depends on the circumstances of the case. I am not sure of my ground here. I prefer to write to my noble friend on that point.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without Amendment.

BRITISH WATERWAYS BILL
Brought from the Commons, read la, and referred to the Examiners.
COMMITTEE OF SELECTION
Third Report made, and to be printed.
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