The debate yesterday has, I think, thoroughly justified our demand that the House should debate the Common Market before the Brussels negotiations reach the crucial stage. I think it is fair to say, first, that the debate has shown a great deal of realism. On the one side, there has been far less of the suggestion that we must go in, at whatever cost—that this will solve all our economic problems—and that we shall be bankrupt if we do not go in. Equally, there was little of the completely anti-European xenophobic line that we sometimes get. This was exemplified the other day by a gentleman who said during the very long cold spell, "I knew we would get all this cold weather once the B.B.C. started giving temperatures in centigrade".
I think that the debate has justified, too, the view that we on this side of the House have taken, as re-affirmed by my right hon. Friend the Leader of the Opposition yesterday, that it really is senseless to decide our attitude to Britain's entry until the terms are known. We have the speech yesterday of the Lord Privy Seal, which was a very far cry from the wishful optimism of last August when Ministers could say that it really was not going to be a question of having to choose between Europe and the Commonwealth. That was clearly said last August. Now the right hon. Gentleman, after many months of hard negotiations, knows perfectly well that such a choice may become inescapable. My right hon. Friend showed, quite clearly on which side, in his view, if that choice had to be made, this House would have to come down. But while the negotiations still continue, while we have still not reached a point of no return, it is absolutely right that the House should debate these issues and make clear our anxieties and the safeguards on which the Government must insist. So far from weakening the hands of the right hon. Gentleman in negotiations, as he seemed to suggest, he should realise not only that the House has a right and a duty in this matter, but that his hands will in fact be immeasurably strengthened by this debate.
I cannot avoid the feeling that the Government have negotiated throughout from weakness. First, they were panicked into their decision last July by the economic crisis. Secondly, they have talked all along as though there were no viable alternative. Once negotiations start from that assumption our whole bargaining position and ultimate freedom of decision are lost.
The debate has ranged over a very wide field—sovereignty, law, foreign policy and agriculture. I should like to begin with the purely economic question, because there was an idea about a year ago, when the Prime Minister made his announcement, that these were purely economic negotiations. Most people have now turned their back on that idea. I shall talk about that in a moment. So far in the debate there has been far less extravagant talk about the economic effects of going in—the idea that British industry is so incurably flabby and degenerate that only the cold douche of European competition will restore us to vigour and vitality.
We must face the fact that in the three years from 1958 to the first quarter of 1962, owing to the Government's policy of liberalising imports of manufactured goods, the import of those goods rose from the monthly average of £26½ million to £52·7 million in the first quarter of this year. That means that they were practically doubled. There was a cold douche of imports of manufactured goods without any notable effect on our competitiveness. I do not know whether it is suggested in any quarter that we are likely to see a much bigger build-up of imports of manufactured goods from Europe, but what we have had so far, particularly from America and Europe, has not had very much effect.
I think there is more general agreement that, in the long term, while on balance Britain's industry may gain, which is the view I take, we also face a serious risk that our industrial cost structure will be raised through dearer food and the effect of dearer food on wages, and that in the short-term we are virtually certain to face rather serious financial consequences, especially as British investors and speculators become free to transfer their capital abroad. In terms of trade, I feel that we face a bigger danger from diversion of investments if we do not go in than from diversion of trade. Certainly we have to balance against any possible gains in the Common Market—likely gains but limited—the inevitable loss of markets in the Commonwealth and certainly in East-West trade as well.
I still take 'the view, too, that while some of our more progressive business men are ready and keen to take advantage of longer runs in a larger market, there are still many employers who are looking to the Common Market primarily as a means of strengthening their hands in a show-down with labour. [HON. MEMBERS: "Oh."] It is no good groaning about it. Hon. Gentlemen opposite really must read the report issued by the British Employers' Confederation last August. They will find full justification for what I have just said.
When one looks at the whole sorry, miserable history of the pay pause over the last year, I wonder whether there is not some reason for thinking that there are some Ministers at least who regard Europe as the means of enforcing the general wage freeze which the Government have been trying to get ever since the Prime Minister was Chancellor of the Exchequer.
The whole House knows, as we have argued many times—there is no disagreement about this, I am sure—that in Europe or out of it this country can achieve economic strength and virility only by our own efforts, by our skill, ingenuity and our capacity for organisation, and also by our sense of purpose and the ability to manage our national economic affairs with a good deal more intelligence and vision than have been manifest in the last few years. I am glad that 'the Lord Privy Seal yesterday stressed the point that there will be opportunities for us in that market—but only opportunities.
Last year, when we stressed the need for Britain to be free to plan her industry and her economic expansion, that was regarded by hon. Members opposite as rather making a party point. There is also the point that now the Prime Minister tells us that he is going to fight the next election on "Conservative planning works". Indeed, he has gone further. In his message to the Conservative candidate in West Derbyshire, he followed his earlier take-over of the Gladstone and Disraeli tradition by putting in a bid for the 1945 Election spirit. The Conservative Party now represents itself in that way. I can appreciate the Prime Minister's trying to get on the band wagon. We are making not a party point but an all-party point when we come to the question of planning. It is we who have always put forward the conception of planning. The Conservatives are now moving in this direction.
The plain fact is that the whole conception of the Treaty of Rome is anti-planning, at any rate anti-national planning in the sense that either hon. Members on this side of the House or the Government understand it with the National Economic Development Council. The title and chapter headings of Part I of the Treaty and the whole philosophy of the relevant articles show a dedication to one principle, and that is the principle of competition. Herr Hans von der Groeben of the Commission says:
The Treaty is founded on the principle that the course of economic events in the Community is to be guided by competition.
What planning is contemplated—a tremendous amount of planning is involved in the Common Market—is supranational, not national, but it is planning for the one purpose of enhancing free competition.
Let us look for a moment at some of the instruments of national planning in Which some of us in this House believe. First of all, there is public ownership. The Lord Privy Seal rightly says that there is nothing in the Treaty of Rome to prevent public ownership as such. I agree. But one cannot then use the public sector for planning purposes, for the establishment or enforcement of priorities, for anything which involves discrimination. The Treaty says:
Member States shall in respect of public enterprises and enterprises to which they grant special or exclusive rights neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular
to those rules provided for in Article 7 and in Articles 85 to 94 inclusive.
In other words, one can have the form but not the substance of purposive public ownership.
My hon. Friend the Member for Houghton-le-Springs (Mr. Blyton) last night drew attention to recent decisions of the Iron and Steel Community. I would go further. I do not think that the Minister will deny this. Even the Government's chosen instrument for regulating the steel industry, an instrument which we regard as grossly inadequate—the Iron and Steel Board— could not, in fact, survive if we joined the Common Market. I think this view is now generally accepted, but the Lord Privy Seal will perhaps give us his own view.
I turn to the distribution of industry. This is a vital control for securing full employment, which we shall be debating the day that we come back. My fear is that our powers, such as they are, for distribution of industry could become a dead letter. A grant of the size given by the Government to get Fords to go to Merseyside or B.M.C. to Bathgate would undoubtedly be regarded not merely as a location inducement but as a State subsidy favouring British car production. While industrial development certificates would remain, one must ask what use they would be if a firm which was refused permission to develop in London or Coventry were then free to go anywhere it wanted in Western Europe.
Take the question of take-over bids. At the last election, faced with a major take-over scandal in the middle of the election, the Government promised urgent reform. Subsequent action has proceeded with rather elephantine caution. There is now, I suppose, rather less than a 50/50 chance of action being taken before the next election. But we must ask whether under the Treaty of Rome we should be free to take action to regulate take-over bids. I and my hon. Friends have proposed that where there are important take-over bids or mergers affecting some vital industry the State should have the right to interfere, and perhaps veto if a foreign concern sought to take over a vital British interest or to sanction, with safeguards for the public interest, of course, or in other cases where a monopoly was created, public ownership to ensure that it was a public and not a private monopoly.
Looking at the Treaty of Rome, I feel that these measures would be precluded in many important cases because of the freedom of establishment guaranteed by the Treaty. Equally, our proposal from this side of the House for new publicly-owned industries based on new scientific research, extension of the powers of N.R.D.C. to cover manufacturing, research and development contracts in the civil field, and so on, might well fall foul of the provisions about subsidies and State intervention. Even Conservative specifics, such as the 7 per cent. Bank Rate that we get halfway between elections, the credit squeeze and other deflationary exercises, would have to be subject to challenge in the Common Market, so—I think this is vital to both parties—would emergency action to control speculative capital movements, because in my view purposive direction of our national economic affairs without power to control capital movements is an illusion. What would happen would be that the price mechanism and the markets of the City would then reign supreme.
I will spend only a moment on the question of tax. We are enjoined in the Treaty—I know it involves a unanimous vote in this case, though I would feel that its importance will be over-ridden by the rather vague provisions of Article 101—to harmonise our system of indirect taxation. This not only means a sales tax, which has been rejected by every Chancellor, Labour and Tory; it will also certainly mean a drastic re-deployment of our entire tax system in favour of indirect against direct taxation and regressive against progressive taxation.
Even today—we have criticised this— 47 per cent. of our Revenue in this country comes from direct taxes against 24 per cent. in France, 26 per cent. in Italy, and 39 per cent. in Germany. In Britain half our social services are financed out of general taxation, in Germany 15 per cent., in France 10 per cent. and in Italy 7 per cent. The question has been put—I do not know the answer to it; I hope the Lord Privy Seal will tell us—whether our Health Service could survive financed as it is today.
The question of selective investment allowances would be ruled out despite their relevance to purposive investment policies. As to estate duties—I know there is no universal enthusiasm for this form of taxation on the other side of the House, and many of us have said that it has become rather a voluntary tax—with the higher rates that we levy compared with many European countries, once the freedom of capital movements was introduced, they would become virtually a dead letter. I know that that will not worry some hon. Members opposite.
So I think it is clear that planning as we envisage it, and even as hon. Members opposite see it, would be subject to severe restriction under the Treaty of Rome. I think the House is entitled to be told by the Ministers who are going to speak today what protocols or reservations the Government are insisting on, or are they imperceptibly moving to the concept of supranational planning by a talented but, in the constitutional sense, irresponsible commission in Brussels?
So far I have been talking of Government responsibility for planning. But what of the responsibility of this House for our economic legislation? There are important questions that we have to look at here. I do not claim to know the answers. If my interpretation of the Treaty is wrong, I am sure the Lord Privy Seal will tell us. I think it should be frankly recognised that acceptance of the Treaty might well mean a fundamental change in the position of Parliament. We are committed under the Treaty to assimilate our code of law to the requirements of the Treaty. Under Article 169, if a member State fails to comply with an obligation to alter its code of law, the Commission may refer the matter to the court, and under Article 171:
If the Court of Justice finds that a member State has failed to fulfil any of its obligations under this Treaty, such State shall take the measures required for the implementation for the judgment of the Court.
Article 189 refers to the power to make regulations, directives, decisions, recommendations and opinions. I am concerned here with regulations, some of
which, on my reading, can be made with a simple majority, with no veto. The Treaty provides that the
Regulations shall have a general application. They shall be binding in every respect and directly applicable in each member's State.
I emphasise "directly applicable". Regulations made in Brussels, then, become part of our domestic law. This is what I hope we shall have explained. We should like to know how this would work under the conditions of our Parliament.
It will, of course, require legislation. To that extent we shall go through, at any rate, the motions of preserving the sovereignty of Parliament in these matters. But the Government must tell us how they and the Six interpret this requirement. Is it the proposal that we pass a blanket Act saying that hereafter all regulations made in Brussels shall become British law, enforceable in British courts without even a nominal scrutiny by the House? Is that proposed? Since two entirely different systems of law are involved—the right hon. and learned Gentleman has made this point before—we should like to know how it would work out in practice. Or does it mean that we bind ourselves in advance immediately to legislate in order to give effect to these regulations? This might cause a lot of difficulties.
I see the Leader of the House looking a little anxious. He will not be there much longer, and so he does not have to worry. Suppose there was, for example, a decision promulgated in the last week before our Parliamentary Recess. I do not often feel sympathy for the Patronage Secretary, but I should have thought that he would be in a very difficult situation. Suppose a regulation were promulgated during a Recess. Should we have to be recalled? Since we are bound to give effect to regulations—we are not "asked" to give effect; we are "bound" to give effect —does it mean, as it appears to, that Amendments in Committee or on Report will be inadmissible, out of order and precluded; or is it to be done, perhaps by Statutory Order? These are the points that we ought to know about.
If it is done by Statutory Orders, would they require an affirmative resolu- tion? But has that phrase any meaning if they cannot be negatived? Alternatively, could they be prayed against? If they were successfully prayed against, what advice would Ministers then have to tender to the Sovereign on receipt of such a Prayer, when the Sovereign is a signatory of the Treaty, after the House had carried a Prayer? Before we are rushed into a decision this July—and this is another reason for emphasising the wisdom of what my right hon. Friend the Leader of the Opposition said yesterday—we are entitled to have these questions answered. There may be fundamental changes in the position of Parliament over a very wide range of our legislation, and as Members of the House we are trustees not only for our constituencies but trustees for all who have sat and who may hereafter sit in this place.
I do not intend to weary the House by going into all the five conditions which we have laid down. They were very fully dealt with by my right hon. Friend yesterday. For that reason, I do not propose to repeat what he said about E.F.T.A., and I hope that the House will excuse my hurrying rather rapidly over the subject of agriculture on which last night we had a conscientious, valiant and even informative speech by the Minister of Agriculture. We were all grateful to him for the trouble he took to explain these very difficult problems.
Perhaps the right hon. Gentleman will forgive me for drawing a contrast between his speech and that of the Lord Privy Seal. Whereas the Lord Privy Seal said that he would not deal with confidential matters which were subject to negotiations, the Minister of Agriculture drew aside the veil for us and in ringing tones proclaimed his views of what should emerge from the negotiations. The Lord Privy Seal has talked in terms of problems to be solved—he is a cautious man—but the Minister of Agriculture has talked in terms of categorical imperatives and other things which must be accepted in the negotiations. This, that or the other thing must be done, whether in terms of price reviews or the safeguarding of horticultural imports and the rest. They are brave words. Have they any gold backing? Have the Six agreed, and what happens if they do not? We are, of course, grateful for his elucidation of these mysteries of the E.E.C. agricultural agreements and the distinction—he called it sophisticated— between target prices, import prices, guide prices, threshold prices, sluicegate prices, reference prices, intervention prices and the rest—I am not claiming to be exhaustive. His intervention on this was very helpful, but the plain truth is —[Interruption.]—does the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) understand these things?
I was only saying that the whole thing is priceless at the moment.
I intend to come to that point in a few minutes. The hon. Member has a point there.
After forty days and forty nights of agricultural negotiations in the Six, with the clock and the calendar stopped at five minutes to twelve, 31st December, 1961, after that agreement had been reached, it took the Six nearly two months to agree on the exact drafting of what they thought they had agreed, and impatiently we waited in the House for the English translation; and after sax more weeks it was vouchsafed to us; and now we have it, for my part it might as well have been in Sanskrit. I have the feeling that that was the Minister of Agriculture's first reaction when he saw it. Yet we all know that certainly the future of British agriculture and horticulture and the future of Commonwealth food imports and so of Commonwealth trade in general depend on the interpretation of those tablets.
I should like to put one question to the Minister of Agriculture. Of course we recognise the different treatment in the agricultural arrangements for what we in this country call deficiency payments and what we call production grants. Can he tell us what is the position with fertiliser subsidies and the lime subsidy? Will they be allowed, or are they to be on the index of prohibited practices? Can the right hon. Gentleman tell us?
At the moment, all the countries within the Six have certain grants to agriculture, but in the fullness of time the Community is to have to decide what types of grants will be eligible for payment and which will not, and these will apply to the Community as a whole.
That answer was very helpful, and I am grateful to the right hon. Gentleman. In other words, we do not know. What is important is to realise that we do not know, because it means that in this respect, too, we are being asked to sign on the dotted line to be told afterwards what it is we have signed.
I will now turn, as my right hon. Friend did, to the problems of Commonwealth trade. I shall certainly not repeat all that he said, although he was clearly right, as was the Lord Privy Seal, to say that there was no one Commonwealth problem, but six, or eight, or ten, or twelve depending on how they are defined. For British Colonial Territories and ex-Colonial Territories it is, as we have repeatedly urged, utterly inconceivable that we should accept a solution which treats those territories less favourably than ex-French or ex-Belgian territories, yet here again there is still no agreement within the Six on their policy for associated overseas territories beyond the end of this year.
In this connection, I should like to refer briefly to two special problems exemplified by the West Indies, although not confined to that area. The first is that of the Sugar Agreement, which we raised in the debate a year ago. Destroy that and we have undermined the prosperity and the very life of important British territories; and it would be quite wrong to talk about the Communist menace and terrorists and the rest of it if we sign a treaty which in this respect would create the very conditions in which Communism could so rapidly breed and develop. Nor, I hope, shall we be answered by pious references to international commodity agreements. It was the Labour Government which negotiated the International Sugar Agreement, 'but we still needed the Commonwealth Sugar Agreement to supplement and to give security to the sugar-producing areas of the Commonwealth. Even the present Government, when Tory freedom triumphed and public monopoly was replaced by private monopoly, had to continue the Sugar Agreement with Heath Robinsonian arrangements of levies and subsidies and rebates. The Commonwealth Sugar Agreement is still in force and vital, perhaps we shall be told by the Secretary of State for Commonwealth Relations, but if Article 234 has any meaning it would have to go, and we want to know what the Government are going to do about it.
The other question is that of oil, and here I think of Trinidad, 80 per cent, of whose export earnings come from oil and oil products, but also of Borneo and other areas of the Commonwealth. We remember that in 1956 the Prime Minister presided over the sale of the Trinidad Oil concern. I shall not repeat the arguments which we had then. But one point made by the Prime Minister, then Chancellor of the Exchequer, was that he was agreeing to this sale only on condition that the production and the finding of oil there was developed very rapidly as a result of the sale. What we want to know is how that commitment is to be honoured if so vital a market in Britain and Europe—I think that it accounts for about one-third of Trinidad's oil exports—is lost. On this we shall expect an answer this afternoon. There may be an answer and we hope that there is, but we should like to know more about it before we commit ourselves.
My right hon. Friend dealt with the problem of Commonwealth manufactured goods. All of us feel that the answer to the problem of industrial products from low-wage countries, as he said, is a widening of the market in all the advanced countries of the world. In this connection, although I disagree with much of what he has said about the Common Market, I very much welcome the initiative taken by Mr. George Ball, the American Under-Secretary of State, in G.A.T.T. to get the world-wide textile agreement, and we wish it well.
The other point raised by my right hon. Friend was the immediate reaction of the Australian and New Zealand Governments to last week's agreement about manufactured goods. I would agree that probably this is a decision on which we could not die in the last ditch. I know that this view is not fully shared by hon. Members sitting on the Front Bench below the Gangway opposite, but some hon. Members opposite have been finding last ditches in which to die for years, and this is another. This is what the Common Market is really about, and if we decide that the terms are right for going into the Common Market, I think we must accept the fact that because it is primarily an industrial customs union at any rate this problem is one which has to be faced. What we are concerned to ensure is that this should not become a precedent for the settlement of the problem of Commonwealth agricultural products.
We must make it plain again that a temporary easement, a temporary relief, is not a solution. We believe Commonwealth foodstuffs to be almost the most vital issue, at any rate on the economic side, but we are not concerned with the choice between slow strangulation and sudden death, not with the process or time in which we reach an ultimate solution, but with what the ultimate solution is. Australian and Canadian grain and meat and New Zealand dairy produce are the most mentioned, but we do not need to remind the Government of other important Commonwealth products. I remember that when we had responsibility for these things the Australian Government attached almost equal importance to dried fruits and canned fruits as to some staple products. Canadian apples represent the mainstay of important communities in Canada, and we must not think entirely in terms of big volume of trade.
We have said that the test is not words, not a question of formulae and solutions, but whether x years from now, whatever x is, the volume of these goods from Commonwealth countries imported, if not into Britain, at any rate into an enlarged community, is maintained and preferably increased. This is the test and there is no evading it. Here we have seen the Government pushed from one untenable position to another. First, we were to secure an agreement maintaining the position of Commonwealth producers in the British market. That was the hope last August. The Government have slender hope of that now, and I do not believe that they would expect that ten years from now, if we joined the Common Market, there would be as much Commonwealth temperate foodstuffs coming to the country as now.
Then we had the second scheme. It was said that joining the Six would mean some replacement—a substituted replacement—of Australian grain or meat, or New Zealand dairy produce, by European produce, so that we were seeking an equal compensating outlet in Europe. The Government are absolutely right to seek it, but this hope seems to be growing dim. Now the Government are putting up a third proposal and we have seen the activities of the public relations officers this week.
It is now said that we shall expand our domestic market as a result of joining the Common Market and that although the Commonwealth countries might have to face losing part of the share that they have in the market, expansion of the market would make up for that. In other words, what we are asked to believe is that although the proportion of Commonwealth wheat Which is coming here will be reduced by the working of the import levy and replaced by French wheat, nevertheless, as a result of our likely prosperity, we shall so stuff ourselves with bread and biscuits and cake, that the total volume coming from the Commonwealth will be maintained. This argument would not fool a seven-year-old child and certainly has little hope with Mr. Menzies.
The right hon. Gentleman is accusing the Government of shifting their position, but is it not he who is shifting his? Did he not say last August that instead of entering into negotiations with the Common Market the Government should go flat out for a Commonwealth free trade agreement? Which countries did he have in mind as being willing to sign a fully reciprocal free trade agreement with us?
I read my speech very carefully.
Read it again.
I have read it again, recently. I had to. If the hon. and gallant Gentleman reads it, he will find that what we said then was that we noted that the Government had entered these negotiations and that I said in my speech, regarding the visit of the three Ministerial bag men who had been going all over the Commonwealth, that they would have spent their time better proposing first a Commonwealth free trade area rather than trying to sell to an unwilling Commonwealth the pro posals which they were trying to sell and I still believe that.
There is the third proposal on which I have just touched. It is that although the Commonwealth may lose through existing guarantees and safeguards it will be helped by international commodity agreements. As my right hon. Friend said, we are great believers in international commodity agreements. I had a lot to do with them at one time. I had a lot to do with the first drafting of the International Wheat Agreement. But let it be said quite frankly that an international commodity agreement, whether a full-dress buffer stock scheme, as with tin, or a multilateral system of long-term contracts or minimum guarantees, as with wheat, provides no answer to the Commonwealth problem.
I hope that the House will be in no doubt as to what the basic problem is. The problem about Commonwealth entry is the price fixed for each commodity and the import levy associated with a given price. If the basic price, whether for wheat, dairy produce, pig meat or coarse grains, is high, Commonwealth food will inevitably be excluded, in the interests of the E.E.C. producers, by this import levy. That is what the agricultural agreement means. This is why we have been right to stress so often from this side of the House—and I think that the Lord Privy Seal said the same thing —that an outward-looking, low-cost, low-tariff Community is one thing— allowing full and free imports from the Commonwealth and other countries and ultimately making possible the Atlantic freer trade area conception which President Kennedy has outlined—but, on the other hand, an inward-looking, high-cost, high-tariff Community, dedicated to the expansion of European production to the detriment of Commonwealth trade, must be regarded as unacceptable.
Let me be absolutely frank. We do not know and shall not know the answer to this problem before July. We do not know whether it will be high prices or low prices. The forty days of agricultural negotiations to which I have referred produced not an agreement but simply an agreement to make an agreement. It settled the form of agricultural regulation but not its content or its price. We cannot know.
I do not blame the Minister of Agriculture for not being able to tell us what price we shall get, because no one in Europe knows what the price will be. We do not know whether the price of commodities will be kept high—and so be fatal to Commonwealth trade—or low. No one knows, and it is clear that the E.E.C. countries will not go through the agonies of a further round of agricultural negotiations before July or August.
We do not know, but we have our suspicions, that the price will be high. Last night the Minister of Agriculture rather supported those suspicions with what he said when he spoke about the likelihood of high prices. I think he said that as an assurance to British agriculture. But, by the same token, what he said was very ominous for Commonwealth food imports. I say this in all seriousness: my fear is that we shall be asked in a month or two's time to sign what, in effect, will be a blank sheet of paper with no price stated, no import levy, and with the invitation to come in and negotiate from within.
It will have certain political advantages. The Prime Minister will be able 'to go round the country telling the farmers—the rather diminishing number of Conservative farmers—that the price will be high and that they have nothing to worry about, while, at the same time, assuring the Prime Ministers' Conference that the price and the levy will be low. To sign a blank sheet of this kind would be a very dangerous act for the Government to be involved in. I hope they will tell us what they are going to do in order to secure some clear and specific assurance about the inward-looking or outward-looking character of the market.
Before I turn in conclusion to the political aspects, I want to refer for a moment to the problems of East-West trade, about which we expressed anxieties last year. There are two reasons for anxiety. First, it is clear that the articles dealing with the Treaty-making power can make it impossible—I think that is a matter for decision by a qualified majority—for member countries to have separate trade agreements with the Soviet Union or with Eastern European countries, apart from West Germany, who, as usual, can commit every kind of dalliance with East Germany while the rest of us are solemnly warned by Dr. Adenauer of the dangers of such promiscuity.
I can understand that tariff negotiations and similar questions of commercial policy must be handled by the Community as a whole. There will be no unilateral tariff deals. I can understand measures to prevent trade deals which allow one country to obtain cheap raw materials which would enable her to undermine the trade position of other member countries. This would be reasonable. But most East-West trade pacts deal with quotas, which are, by definition, outlawed as between members.
We agree to allow more Soviet cameras or Polish bacon into this country in return for increased quotas for British textiles or pottery into Eastern Europe. Why should such agreements be subject to veto? What are the Government doing about this question?
My second reason for anxiety about East-West trade relates to the fact that since a high proportion of our imports from Eastern Europe is made up of foodstuffs, those same agricultural provisions which may freeze out Commonwealth food will equally exclude Eastern European foodstuffs. Eastern European countries can buy from us only to the extent that we sell to them: exclude their exports and they will stop buying from us. For example, Poland is now buying £20 million worth a year of British exports—mainly manufactured goods. If we cut off imports of her ham and bacon, as we would have to do under a system with a high import levy, those exports will stop, and we shall not be selling our manufactured goods to that country.
Yesterday, my right hon. Friend showed that against the gains we hope to achieve in our exports to Western Europe—if we go into the Common Market—must be set the inevitable losses to some extent, in our exports to the Commonwealth. To this must be added what I have just mentioned—the smaller but still significant losses through the strangulation of East-West trade. When we do that the net trading gains become rather more problematical. I hope that the Lord Privy Seal will deal with that question tonight.
This bears very much on the question: what happens if the negotiations fail? Let us be clear; this will not be the end of the world. We shall still have our very substantial dollar trade, which we can expand if we will; we shall still have our East-West trade, and we shall have our Commonwealth trade, and freedom to develop it, by closer economic integration, by joint planning of Commonwealth development projects, by long-term contracts—and also, I hope, by a purposeful development of those industries in this country whose products are needed in Commonwealth markets. We never have accepted that this decline in Commonwealth trade, about which we keep hearing, is inevitable. It is partly the result of Government policy and partly the result of the candy-floss economy.
In conclusion, I turn to the political problem. Yesterday my right hon. Friend emphasised again that the Treaty of Rome, as such, contains no political commitments. If we sign it we are not thereby pledged, explicitly or implicitly, to any advance towards a federal constitution in Europe, a United States of Europe, a common foreign policy in Europe or any such thing. There is no such commitment. But whereas, last year, the Prime Minister could still say that this was a purely economic, commercial and trading negotiation, and not a political or foreign policy negotiation, everyone is now earning to realise that there are certain political overtones in the negotiations
In his speech to Western European Union—secret and confidential, and made available to hon. Members only through the courtesy of The Times—the Lord Privy Seal made no bones about this point. He said that there will be political as well as economic implications. The question is: what kind of commitments and what kind of implications will there be? The Lord Privy Seal was fairly reassuring about this yesterday. He used the word "pragmatic". We always like to hear that word. But do the Government agree with Mr. Spaak, when he said last month that the Six have decided that if Britain does join the Common Market she must also belong to Europe politically? Or do the Government agree with Mr. Marjolin, who said that the Europeanisation of agriculture means that we shall need a real European Government and not merely periodic meetings of Ministers of the Six countries? Or are the Government secretly relying on President de Gaulle? The House has a right to know more about this, and Europe must know where the Government stands; otherwise, in a year or two, I fear that we shall have all the charges of "perfidious Albion" thrown at us in five, if not six, European languages.
But I have a graver fear—referred to by my right hon. Friend yesterday; the domination of Western Europe by a Paris-Bonn axis, dedicated to an intransigent line in East-West affairs, Right Wing, possibly semi-neutralist and, before long, nuclear-powered. My right hon. Friend was right to say that it is for anyone to argue whether we shall be more likely to prevent this development inside or outside the Common Market.
What some of us feared—and still fear—is that President de Gaulle will allow the negotiations to reach a state of near-agreement and then barter his consent to Britain's entry against Anglo-American assistance in his dream of becoming a major nuclear power. We are still worried about this. We do not know what the Prime Minister said to President de Gulle. We deplore—as I believe he did—the triumphant issue by a French Department of State indicating that the Prime Minister had allowed President de Gaulle to walk all over him. I do not believe that happened, but I wish that we knew more. I wish that the Prime Minister or the Lord Privy Seal would tell us that he categorically refused to barter Britain's entry to the E.E.C. against any nuclear deal; that he has strongly pressed the President to seek national self-realisation in other fields, and even that he took time off to tell the General something of the Blue Streak story, which might be extremely illuminating to him.
We hope also—not only because of our dear commitment to E.F.T.A. but on other grounds—that the Prime Minister pressed the President to use his influence in the Six to prevent any discrimination against the association, under Article 238, of Sweden, Switzerland and Austria, on the ground that they are neutrals. The same applies to Ireland's application for full membership. This kind of talk, and the dithering on this question, confirms the fears of those who feel that this is a bloc with a military motivation, dedicated not to trade but to the cold war. N.A.T.O., and not E.E.C., is the military defence forum of the West. We greatly regret that, so far, we have had no assurance from the Government that they support us on this question of the neutrals.
We emphasise our opposition to the development of E.E.C. on political lines —for that means federation, a United States of Europe or a common foreign policy—for all the reasons mentioned in this debate, but perhaps for one above all, namely, Britain's position in the world, due to our special relation with the Commonwealth, and especially with that newly-emerging world of African and Asian countries which are now struggling forward to the light.
While all of us in the House weigh, conscientiously and with a full sense of responsibility, the deep issues before us —of economic advantage for ourselves and our partners; or control over our economic destinies; of political sovereignty and the authority of Parliament—while all of us know that this decision will have to be taken, when the terms are fully known to us each one of us knows that we have no mandate, political or moral, to take any action which will derogate from our power, through this rapidly changing multiracial Commonwealth, to play a decisive part not only in Europe but in world affairs.
I am sure I can echo the sentiment expressed by the right hon. Member for Huyton (Mr. H. Wilson) in the last sentence of his speech about the importance and the great future which lies ahead for our multiracial Commonwealth.
In view of the course of this debate, it would probably be convenient to the House if I were to concentrate my remarks upon the Commonwealth aspects of this problem. We have promised our partners in the Common- wealth that we shall not join the European Economic Community unless we can make arrangements to safeguard their vital trading interests. We made that promise, we stand by that promise, it remains as it was, unqualified and unaltered. I think it just as well at the outset to make that quite clear.
The negotiation of these arrangements, as most people expected, has proved to be the crucial problem of the Brussels talks—the nub of the problem, as one hon. Member described it yesterday. I am naturally not forgetting the problem raised by British agriculture, nor the economic and political issues which are of direct concern to ourselves. Nor am I overlooking our obligations to our partners in E.F.T.A. But, since they are seeking to join the Community themselves, they are of course able to negotiate at the conference table. The Commonwealth countries are in a different position. They are not seeking membership, and consequently they are not direct parties to the negotiations.
This, of course, greatly adds to the responsibility which we bear. For in conducting the negotiations, we have to weigh the effects not only upon our own people but on the well-being of millions of others all over the Commonwealth. That is why we have attached such special importance to close consultation with other Commonwealth Governments throughout the proceedings. At the outset we promised that we would maintain continuous contact and seek the views of the Commonwealth Governments concerned at every stage. I think I can say that we have certainly fulfilled that undertaking. I believe that all Commonwealth Governments would readily recognise that in the history of the Commonwealth there has never before been such continuous and effective consultation at all levels.
British Ministers have visited Commonwealth countries to discuss this prolem. Similarly, Commonwealth Ministers have come here, and we have encouraged them to go themselves to the Continent so as to make personal contact with the Governments of the Six. A veritable flood of telegrams is passing to and fro between us all the time. Direct contact is maintained through our High Commissioners in their capitals and their High Commissioners here, and through Commonwealth representatives in Brussels. There have been numerous visits by officials in both directions. As the negotiators, we of course have to judge the tactics. We have to make up our minds how the hand can best be played. But we have invariably discussed beforehand with other Commonwealth Governments any proposals which are to be put to the Conference; and we try always as far as we can to meet their wishes.
In these negotiations, our aim is to devise arrangements which will maintain for Commonwealth countries their present opportunities to trade with Britain and with Europe, and to secure this in a way which will not violate the basic principles of the Common Market and the Treaty of Rome. This, of course, is not an altogether easy matter. For, even if the Six accepted this objective without qualification, we would still be left with the task of defining precisely just what are the rights and advantages which Commonwealth countries at present enjoy.
If we are thinking in terms of strict legal rights, the question is relatively easy to answer. The Ottawa Agreements, which apply only to the signatories in 1932, provide certain general rights of entry and preference, although it must be remembered that the Ottawa Agreements are subject to revocation at six months' notice on either side. In addition, we have made, with certain Commonwealth countries, specific agreements governing particular commodities for a specified number of years. For example, there are the meat agreements with Australia and New Zealand, which continue until 1967, and the Commonwealth Sugar Agreement—to which the right horn. Member for Huyton referred —which at present runs until 1969.
There is no difficulty in defining the rights conferred by these specific agreements. But it is not any good looking at this question purely from the legal standpoint. Apart from the fact that most Commonwealth Governments have no contractual agreements with us at all, even those which have legally binding pacts have never contemplated the possibility that the British market could be closed to them at the end of the period specified in the agreement. They have always assumed—and with every justi- fication—'that when the current agreements expired they would be renewed for a further period in the same spirit, although not necessarily on precisely the same terms. Similarly, Commonwealth producers whose products are not covered by specific agreements have quite naturally taken it for granted that they would continue to have easy access to the British market.
At the same time, they have known that they could not necessarily count on free entry for unlimited quantities for all products for all time. In the interests of our own manufacturers, we have already for some years had to ask for restrictions on imports of textiles from India, Pakistan and Hong Kong. Even in the field of foodstuffs we have, in the case of butter, been obliged to depart from the principle of unrestricted free entry in order to ensure a fail return to New Zealand producers who were being undercut by dumped butter from other sources.
One of the difficulties that face us is that Commonwealth trade covers such a very wide range of products. The present arrangements for free entry into this country vary from commodity to commodity. So do the future prospects and expectations of the producers. Moreover, different products present different problems to the European Community. This makes it obviously impossible to devise any simple and uniform formula which could be applied to all countries and to all commodities. Therefore, as my right hon. Friend the Lord Privy Seal explained, it has been necessary to split up the problem and to deal with it separately in a number of sectors for each of which we shall seek to find some acceptable solution.
Undoubtedly, the most difficult question is that raised by temperate foodstuffs, to which the Leader of the Opposition referred yesterday at some length. The reason is that these compete directly and on a large scale with agricultural production within the Community. Broadly speaking, we are endeavouring to negotiate, for an initial period, arrangements which will, as far as possible, assure to Commonwealth producers trading opportunities in Britain and in Europe equivalent to those which they at present enjoy. That is what we mean in this connection by the term " comparable outlets". But that, of course, is not enough. The Commonwealth producers must have some assurance of continuity after the initial period. Commonwealth producers must have confidence that over the years the enlarged Community will continue to treat them fairly in the same way as they are confident of fair treatment at present from Britain.
On the other hand, the Six are not unnaturally reluctant to give precise and perpetual guarantees for the entry of Commonwealth produce, such as we ourselves have never felt able to give. Any trade arrangements which we have made with the Commonwealth have always been the subject of periodic review. Therefore, following this line, we have proposed to the Six that while maintaining the objective of Comparable Outlets, the arrangements agreed in the initial period should be reviewed from time to time, and where necessary amended to take account of changes in the situation or of any world-wide commodity agreements which might in the meantime have been concluded.
Our Commonwealth partners recognise —I think perhaps better than some of their champions here—that the negotiations in Brussels, however successful, are bound to involve changes of many kinds. This was frankly accepted in a recent speech by the Canadian Finance Minister, Mr. Fleming. Speaking in New York on 17th May, he said:
Canadians are realists. We would not attempt to insist that all present arrangements must be left intact and that no changes can be contemplated. We fully recognise that, with the important changes that are occurring in world trading arrangements, all of us must be prepared to face far-reaching trade adjustments.
My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) accused us yesterday of riding roughshod over the Commonwealth and said that New Zealand would be ruined unless free entry was maintained. The New Zealand Government have all along been aware of the difficulty of reconciling the principle of unrestricted free entry with the principle of a Common Market and a Common Customs Union. I made this dear to them myself, in our talks in Wellington as far back as last July, and they recorded, as the House will
remember, in the published communiqué at the end of our talks that while they naturally preferred the continuance of free entry—these were their words—they were
prepared to examine any other methods of protecting New Zealand's interests.
My right hon. Friend has misquoted my remarks. What I said yesterday was that if we denied to New Zealand first the right of free entry and also adequate comparable outlets, we should be destroying New Zealand's economy and riding roughshod over the Commonwealth.
I looked up my right hon. Friend's speech this morning, but I will not pursue the point, as I am quite prepared to accept his correction. My point is equally valid on the question of free entry. New Zealanders have— and I think with moderation—shown their readiness to examine with an open mind any other arrangement which might safeguard their essential interests.
The Leader of the Opposition referred yesterday to criticisms made last week by Mr. Menzies and Mr. Marshall-other hon. Members have naturally spoken about this—of the solution proposed for manufactured goods from Canada, Australia and New Zealand. The right hon. Gentleman said that the Commonwealth should have been frankly told about this. I agree with him. Of course, they should have been frankly told, and they were frankly told. There has been absolutely no lack of frankness between us all on this question, and I am glad to have the opportunity to make this clear.
As far back as last July when I visited those three countries, before the negotiations had even started, I made it quite clear that there was one item which we could not reasonably expect to negotiate with the Six: and that was unrestricted free entry for manufactured goods from the developed Commonwealth countries. That obviously stood out a mile before we entered the negotiations. Last March again we told the three Governments of the scheme we intended to propose, and we discussed it with them in the weeks which followed. Although we naturally did not expect them to give their blessing to any concessions, I am sure that they would not complain that they had not been fully informed and fully consulted.
In order to keep this issue in perspective, it is perhaps worth remembering that the goods affected represent about 2 per cent, of Canada's total exports, 0.7 per cent, of Australia's and 0·05 per cent, of New Zealand's. I assure the right hon. Member for Huyton that these manufactured goods have been treated as an entirely separate problem, and that we have no thought of allowing this solution in a very limited field to set a pattern for solutions in other sectors.
I am sorry to interrupt the right hon. Gentleman, and I do not want to embarrass him too much by asking this, but I understood from what he said earlier that with regard to temperate agricultural products he is asking the Six to agree that at the end of the transitional period there shall be continual reviews by us and the Six to make sure that there is what he called fair treatment for Commonwealth exports to Europe as a whole. Supposing that at one of these reviews the British Government and the Commonwealth Governments consider that what the Six are prepared to concede is not fair to the Commonwealth. Will Britain be free on her own to take compensating action to give Commonwealth access in this market which is denied in Europe? This is the crucial thing for making an agreement satisfactory to the Commonwealth countries.
This is a very important issue. This is what we are negotiating about at the moment, and the hon. Gentleman will not expect me to go into detail about it. What is vital in the negotiations on this issue is to be clear about the principle on which the review is to be carried out. If we can get that right, then probably the result will be all right, and this is one of the important questions which will be negotiated in these coming weeks.
I think that that is as much as I can say now. There is no intention on our part to leave the position entirely in the air so that nobody knows what will happen at the end. Whilst we cannot, for the reasons that I have given, ask the Six to agree to perpetual arrangements which we have never been prepared to give Commonwealth countries, we cannot leave the position in the air; and therefore we must agree with them the principles on which the review is to be carried out at the end of the initial period. I think that this is the best answer that I can give at this stage.
A great deal of attention has naturally been focussed on the right of access to the British market, and this is of course vitally important. But what matters in the end to the Commonwealth producer is his ability to sell his goods when he has got them into the British market. I think that this was simply and rather strikingly summed up the other day by a former Australian Prime Minister. Lord Bruce, when he said:
The right policy for Australia is the policy which will make Britain financially sound and prosperous. Unless the British people have the money to buy Australian produce, access to the British market is not worth a sick headache.
Several hon. Members referred to the question of manufactured goods from Commonwealth countries in Asia. The Six fully accept the importance of helping countries like Pakistan and India to raise their living standards. They are already providing very substantial loans for development plans in both these countries, and I think they naturally recognise that it would not really make much sense to stifle the new industries which they are themselves helping to create.
The Leader of the Opposition, the right hon. Member for Huyton, and other hon. Members raised the question of tropical products. This is closely linked with the question of association for overseas territories. The Six are at present in the process of revising the relationship between the Community and the territories which are already associated with them. Until this work is further advanced, it will not be possible for us to have any detailed negotiations on this matter.
However, I assure the right hon. Gentleman that we have asked that the former British territories concerned should be offered the opportunity to become associates on the same terms as the former territories of the continental countries. I also assure the House that the West Indies are naturally included in this proposal.
The Leader of the Opposition urged that free entry should be allowed for all tropical products. I have a good deal of sympathy with that idea. Difficulties do, however, arise over certain products. But, as I think the House knows, oil seeds are already duty free in the Community, and we have proposed the removal of duties on some of the other main tropical products, including cocoa and tea.
One or two hon. Members have expressed the view that if Britain joined the Common Market, our financial position might become more difficult. Some reference has been made to the balance of payments position. It is a rash man indeed who is prepared to predict anything about the balance of payments more than a very few months ahead. But on the general question all I would say is that this opinion does not seem to be shared by the Australian Finance Minister, Mr. Harold Holt.
In a speech in the Australian Parliament in Canberra a few weeks ago, when he was discussing the possible effect of Britain joining the Common Market, he said:
I believe that the City of London will become strengthened as the main financial centre of the world. In that case, Australia may well receive through London further capital investment from European countries where at present we are relatively little known.
My right hon. Friend the Member for Thirsk and Malton and others urged that instead of going into the Common Market we should seek to expand Commonwealth trade, and the right hon. Member for Huyton, who apparently had refreshed his memory about an earlier speech, still seems to hanker after a Commonwealth free trade area. Whether we go in or stay out, we must do everything in our power to expand in every way Commonwealth trade of all kinds. But this is not an alternative to the Common Market in Europe. We can continue negotiations to enter the Common Market without in any wise reducing our efforts to try to find new ways of expanding Commonwealth trade. Much as we should welcome a Commonwealth Common Market—or most of us I think would welcome it—it would not suit any of the Commonwealth countries,
all of whom are trying to develop young secondary industries behind the protection of a tariff wall—not to mention the fact that a common Commonwealth agricultural policy might raise some quite awkward problems for the British farmer.
I want to make it plain that I was not suggesting that we should break off negotiations and try to get a Commonwealth free trade area. My reference was in response to the courteous intervention by an hon. Gentleman opposite. I was talking about building up the Commonwealth, and I agree that this should be pursued. I raised it in this context, that some hon. Members might have given the impression that if the negotiations were to fail, this would be the end of the world. I was saying that that was not so. I do not accept the structural inevitability about Commonwealth trade, but I was not pressing the idea of a Commonwealth free trade area as an alternative to continuing the negotiations.
I obviously agree with the right hon. Gentleman that if the negotiations fail it will not be the end of the world, but I think it will be a great misfortune.
All the Commonwealth Governments have recognised that the ultimate decision as to whether Britain joins the Common Market is one which we here alone can take. Ours is the responsibility. No one can relieve us of it; nor does anybody want to. On the other hand, since it profoundly affects the interests of the Commonwealth, we have undertaken, quite naturally and properly, to discuss the whole matter with the Commonwealth Governments, not only separately but collectively, before anything is finally decided.
As the House knows, a meeting of Commonwealth Prime Ministers is being convened for this purpose in September. September was chosen because it was thought that, although the negotiations would probably not yet be completed, we should by then have a pretty clear idea of the kind of overall package which the Six would be prepared to accept. This will be fully discussed with the Commonwealth Prime Ministers at this meeting in September. It is only after hearing the views of other Commonwealth Governments that we shall come to our decision, and they may be sure that in doing so we will study their interests with the same critical care and with the same sense of responsibility as if they were our own.
In the meantime, I hope that Commonwealth Governments will, as far as possible, reserve their comment and not commit themselves to irrevocable positions until they are able to see the proposition as a whole and to assess its overall effect. In the next two months, a series of proposed solutions for particular aspects of the problem will be announced. I know it is difficult not to react as each piece of the jigsaw puzzle emerges. But, as the Leader of the Liberal Party rightly said, what matters is how the pieces fit together.
I have spoken so far mainly of the economic aspects of this question, but of course, the political consequences are every bit as important. There are those who take the view that, even if we are able to negotiate satisfactory safeguards for trade interests, the cohesion of the Commonwealth would be fatally undermined by Britain's political involvement in Europe. I can quite understand these anxieties, but I do not share them in the very least. Our present-day Commonwealth, with its varied membership—the multi-racial Commonwealth to which the right hon. Gentleman referred—is not, and is never likely to become, a political unit. By that I mean it could never be a closely knit group of States pursuing a uniform external policy in foreign affairs or defence. Its future lies in quite a different direction.
The value of the Commonwealth to the world derives from two factors. The first is the diversity of the nations which compose it, most of which are leaders of thought and action in their respective spheres. The second is the close and informal contact between its members, in the course of which they are, all of them, all the time, helping to shape each other's views on the issues of the day. As it develops, and as new member-States become more firmly established, the Commonwealth will, I believe, develop a growing influence for stability and understanding, extending far beyond the circle of its own membership.
At times, the Commonwealth will make its voice heard through joint de- clarations such as the one on disarmament issued by the Commonwealth Prime Ministers last year. But, more often, the collective thoughts of the Commonwealth will be exercised indirectly and unconsciously through its individual members, each providing leadership in its respective sphere.
With Britain, and the other countries which are seeking admission into the European Community, the Community would have a population of over 250 million people, larger than either the United States or Russia. As its machinery for consultation develops, it will undoubtedly become a political influence in world affairs of the first order. As a member of the European Community, Britain would play her part in shaping the economic policies and political views of this powerful group of nations. Far from weakening the Commonwealth, Britain's membership of the Community would bring to the Commonwealth as a whole a new and important element of influence and strength.
If the difficult negotiations which my right hon. Friend the Lord Privy Seal is conducting with such skill, patience and determination—[HON. MEMBERS: "Hear, hear."]—are to reach agreement, there will have to be quite a lot of give and take. Concessions will undoubtedly have to be made on both sides. But let no one imagine that we have decided to join the Common Market on the best terms we can obtain, whether they are satisfactory or unsatisfactory. It would be fruitless at this stage to try to define just where the breaking point might come, but one thing should by now be obvious to all.
If our admission to Europe should involve the disruption of the Commonwealth, that is an entrance fee which we are not prepared to pay. On the other hand, if the terms are fair, I am unshakeably convinced that Britain's entry into the European Community will be good for Britain, good for Europe, good for the Commonwealth, and good for the stability and progress of the world.
I understand that it is the generous tradition of the House of Commons to be indulgent to a maiden speaker, and on this occasion it is certainly indulgence of which I feel most in need. As I understand it, this indulgence is based on a compact by which a maiden speaker avoids controversy, presumably to prevent an unreasonable demand for restraint being placed on hon. Members who might otherwise seek to intervene.
Listening to the debate yesterday, I tried very hard to discover an aspect of this discussion on the Common Market upon which it would be possible to be utterly non-controversial, but it did not seem to me that even the complications of which we heard yesterday and again this afternoon of farm gate, threshold, intervention, target and guide prices were entirely above controversy. I hope, then, that the indulgence of the House may prove elastic on this occasion and that I shall be allowed to get away with some mild controversy, provided that what I say proves acceptable or unacceptable equally to hon. Members on both sides of the House.
Hon. Members yesterday drew attention to the extent to which the centre of the discussion has shifted in the last twelve months. A year ago, it was the detailed consequences of entry into the Common Market for a wide range of our industries Which most concerned not only Members of the House of Commons but those outside. But now, in the memorable phrase of the right hon. Member for Flint, West (Mr. Birch), the price of tomatoes is happily not generally regarded as the vital factor which will determine the outcome of the negotiations. Not that I imagine that any of us would choose to be contemptuous of the special interests that would be affected by entry; for example, the fishing industry or the growers of Scottish oats, or the Scottish growers of oats, whichever it is. And I confess that here I am fortunate in my constituency interests.
Stockton, and Tees-side as a whole, depends substantially on the chemical and heavy engineering industries. There is little doubt that these would be able to compete successfully in the Common Market, with fortunate consequences both for employment and prosperity generally. Certainly I am confident that the high ability, skill and resourcefulness of the people of Stockton would enable them to respond to any challenge that might be presented to them. They want a dynamic, developing Britain, but they know that the only way to achieve it is through hard work and the full deployment of our talents—not that I would wish to mislead them or anyone else into believing that the Common Market would answer all our economic and industrial problems. Nor would I urge anyone to believe that it would be effective soon enough to relieve the real hardship and distress being caused at present by growing unemployment on Tees-side. This requires action by the Government now.
For many years Stockton was served faithfully and well both in the House and constituency by my predecessor, Mr. George Chetwynd, to whose work I should like to pay tribute. Mr. Chetwynd is now Director of the North East Development Council, and in this capacity he is continuing to give his time and effort to the problems of the North East and particularly to the future prosperity of the region.
I hope that the tremendous importance of the subject we are now debating will not distract the Government from giving close attention to the immediate problem of more jobs, particularly for school-leavers, in Stockton-on-Tees and throughout the North East. If I were able, as I am not, to be controversial, I would also remind the Government that my constituency of Stockton marches with Middlesbrough, West, which is just across the Tees.
Economic prospects aside, much of the debate yesterday, and I suppose that the same will be the case today, turned on the consequences for the Commonwealth of British's entry into the Common Market. On the one hand there seems to be complete agreement that Commonwealth interests must be safeguarded, while on the other there seems to be much disagreement about the consequences for the Commonwealth if Britain enters the Common Market.
Regarding the principles involved rather than the deails, I must confess that, having listened carefully to the debate yesterday, it seems to me that some of the opponents of the Common Market are too anxious to put the Commonwealth beyond criticism and to treat its critics as they would treat critics of the Crown. Surely the Commonwealth is not a fragile plant to be nurtured under glass and always in the sun? If it were, it would not have survived to this day, despite the many changes and strains in the thirty years since the Statute of Westminster.
The best friends of the ideals for which the Commonwealth stands are not necessarily those who speak loudest in its praise or take whole pages in daily newspapers to express their views. That the economic interests of the Commonwealth countries must be taken account of we are all agreed, and I am sure that we were greatly impressed by the points made on this by the Leader of the Opposition. However, Britain's obligations regarding trade seem to be not so much obligations towards a collective Commonwealth as collective obligations towards separate Commonwealth countries. It is the separate requirements of Canada, Australia, New Zealand, the African territories and the West Indies that concern us. It is bilateral relations which are mainly in this respect at stake.
I say this because the identity of the Commonwealth as a whole tends to be lost sight of and because the friends of the Commonwealth—of which I count myself one—cannot have it both ways. Either the Commonwealth is primarily an association of mutual self-interest, or it is bound together principally by ties of kinship, affection and sentiment. If self-interest predominates, then self-interest may lead any Commonwealth country off on its own in quite a different direction at any time. No one has denied that self-interest, as a corollary to sovereignty—which no one denies to be an additional important aspect of the Commonwealth association—has often motivated the actions of separate countries and will certainly do so again.
We can raise no objection to this because in a free association freedom may properly be exercised. But if this is the case, while other Commonwealth countries may be expected to express their views, Britain is as free as they are to make her own arrangements—if necessary for entering the Common Market.
If, on the other hand, the ties of kinship, affection and sentiment are the most important, can they really be so easily severed by Britain's association with Europe? Kinship in terms of friends and families in Commonwealth countries will certainly endure—and with it affection. Sentiment is also much too strong to be broken, at least over a generation. Personally, I believe that the factors which bind us together in the Commonwealth are largely of, kinship, affection and sentiment. I have a greater faith and hope than some people that our friends in the Commonwealth will believe that, whatever decision we may make on the Common Market, we shall not sever ourselves completely from those who have previously regarded us as friends. This is not the way I normally find my friends behave when I choose to make other friends in addition to them.
The only danger seems to lie in the coming months. If supporters of the Common Market are consistently represented as enemies of the Commonwealth, I fear that opinion in the Commonwealth may be persuaded that they are. In that case, if Britain does enter the damage done to the Commonwealth connection will be hard to repair. Many of the statements expressed by hon. Members on either side have sought to do more to redress the balance in favour of a temperate, middle view. But I believe that there is a special responsibility on all opponents of the Common Market not to claim to be the only true friends of the Commonwealth idea.
As the Leader of the Opposition said, we are still pitifully short of the facts on which a final view of the terms of entry must rest. Unless a blank cheque is to be presented to the Government, more information is needed. But, in the last analysis, the final decision will be made on a balance of probabilities. No one will be certain of the outcome of a decision either way. In this sense, whether we enter or not, an act of faith will be required. No one can look into the future. We can only make our individual predictions, and no one will be certain of the outcome of the decision either way.
I love this country dearly—its history, traditions and customs—but it has survived and prospered only by being adventurous and bold and more concerned with the future than the past. No one will deny that the greater adventure now would be for us to take the decision to enter the Common Market. I hope very much that we shall not shy away from it, if the conditions are right, simply out of fear of the unknown or from being too proud to associate with a going concern established without our support. We could at this time be parochial. We could feel that by not going into the Common Market we would retain the "great" in Great Britain and by standing alone as a mediator have a very peculiar and special rôle in the world. I do not hold that view. I think that it would be too great a risk to take. I hope that when we approach this problem we shall not be afraid of Europe. I sometimes think that the opponents of Britain's entry on any terms wish not only that the Common Market did not exist but also that Europe did not exist either. We must go beyond this and accept that Europe is there and that the Common Market is there, too. We must then decide if necessary to plunge into it, if the conditions are right, even if it may require an effort of pride and will.
Last August, my right hon. Friend the Member for Belper (Mr. G. Brown), in winding up the two-day debate, said, "We wish the negotiations well. We are not hoping for failure". Whatever the problems and hesitations, I very much hope the House will echo that view.
It is a privilege and pleasure for me to have the opportunity of congratulating the hon. Member for Stockton-on-Tees (Mr. W. T. Rodgers) on his very admirable maiden speech. He chose a great theme on which to make his maiden speech and matched it by the quality of his speech. His speech combined in very pleasant degree the modesty and the justified self-confidence which are the hallmarks of the best maiden speeches. I am sure that the House listened to him with great pleasure and will welcome him here in the room of his predecessor. May I be allowed to echo his kindly and appropriate references to Mr. Chetwynd? Mr. Chetwynd was a close personal friend of mine for many years. The hon. Gentleman will soon appreciate, if in- deed he has not done so already, that one of the great charms of this place is that differences on public matters never inhibit private friendships. All of us will look forward not only to hearing the hon. Gentleman again on many occasions, but also to meeting him in the less formal and corporate activities of the House.
I join in the general welcome to this debate at this time. It is appropriate, in this interim but vital phase in this great decision which this country has to make, that we should assess our position and prospects in the specific context of the authority which the Government received from Parliament in August last, and also in the broader context of the long tradition and legitimate aspirations of the British people. More specifically, we must, first, recall the assurances and framework of the authority of August last; secondly, we must have regard to the general negotiations, or what the Lord Privy Seal yesterday called the preliminary negotiations, starting in October last; thirdly, we must have regard to the specific negotiations that are currently in progress; lastly, but most important of all, we must relate the purpose and progress of these negotiations to the possibility or probability, as the case may be, of our achieving the safeguards necessary to justify entry into the Common Market.
If at any time during the negotiations there were any deviation, or even any danger of deviation, from the proclaimed path, it would be our duty to seek to reinforce the will and purpose of the Government and to affirm and emphasise once again the supreme importance and abiding value of the principles and practice of sovereignty and the continuance of the Commonwealth connection.
Before coming to my brief analysis on that pattern, I want to make this preliminary observation. In so far as current negotiations are on economic matters, we are not thereby justified in viewing them in an exclusively economic context, because economic decisions raise political implications. Decisions, for example, on the level of tariffs and preferences may have inescapable and unwelcome consequences for the Commonwealth connection. Decisions on so-called economic union, social services, restrictive practices and the like, may by the method and the machinery of their application have adverse consequences on the principle of the sovereignty of Parliament.
I turn now to the assurances of August last—Commonwealth, special United Kingdom interests, E.F.T.A. and sovereignty. The addition of sovereignty followed from the activity of Parliament. Sovereignty did not figure in the earlier catalogues of matters requiring attention. It was added because the matters were agitated on the back benches of the House of Commons. Private Members of Parliament are the traditional and appropriate custodians of proper constitutional principle and practice.
However that may be, in August last a path was defined, and straightly defined. With that authority, the Government started their negotiations. At the outset of their negotiations on 10th October, my right hon. Friend the Lord Privy Seal made three basic concessions.
It is inevitable in discussion of these matters that many references are made to the speeches and actions of my right hon. Friend, and sometimes inevitably in a critical way. These are not criticisms directed at him personally as a Minister. He is the able and devoted agent of the collective will of government. He is doing his duty as he sees it with patient persistence. The only thing that I would add, if I may be allowed to without disrespect, is that inevitably with his work he stands very dose to the trees, and it is our duty to see the wood.
The three basic concessions were these: first, that the United Kingdom would accept the Treaty of Rome without amendment, save only as to protocols; secondly, that we would accept the common external tariff; and, thirdly, that we would accept the political implications of the Bonn Declaration of last July.
As to acceptance without amendment, some hon. Members may recall that last summer I referred to a mistranslation in the English text of the Treaty and pointed out that in fact we could expect no amendment under the Treaty, other than consequential adaptation. In the event, I think that was accepted by the Government. It certainly became clear on 10th October. I ask hon. Members who voted in favour of our application to join the Community to search their hearts and memories as to whether they really thought when casting that vote that there would and could be no amendment to any of the 240 Articles of the Treaty of Rome.
As to the common external tariff, that makes it, or may make it, obligatory upon us at a time yet to be defined, because time is the subject of negotiations, to accept the principle of the reverse preference—that is, to treat our old Commonwealth partners worse than our new European associates.
In regard to the Bonn Declaration, my right hon. Friend said this on 10th October:
We fully share the aims and objectives, political and otherwise, of those who drew up the Declaration.
It is true that we are reprieved from the consequences of this by reason of the inability of the Six for the time being to agree upon the precise form of political union. But it is not an absolute reprieve. It is only a reprieve from day to day.
With those three basic concessions— not, as I understand it, extracted so much as volunteered at the start of the negotiations—we have to draw pretty deeply on our natural reserves of optimism if we are to be confident that the negotiations will end in the requisite safeguards being achieved. Those basic concessions, made within ten weeks of the authority being given, justified the action of my right hon. Friend and hon. Friends who found it necessary to reserve our position on that occasion.
I come now to the specific negotiations. They cover a wide field—manufactured goods, raw materials, temperate and tropical products, and economic union so called. The first and last of these matters are of especial interest, because in regard to them an agreement, or conditional agreement, has already been made. Therefore, we are better able to see where we stand, better able to measure their effect on sovereignty and the Commonwealth, and better able to assess their impact for future agreements on other matters and commodities. In a word, we can read the crystal by perusing the book.
In regard to manufactured products, the salient fact is clear. Preferences come to an end in three stages by 1970. I do not derive much comfort from the fact that the Six changed their view on timing, nor from the fact that we are to have talks—talks without commitment, talks in an unknown context, talks without a precise agenda or clearly defined purpose. It is easy to say that manufactured goods do not matter much; that they are small in amount; that there are only £50 million to £60 million of imports from Commonwealth countries; that they affect only a few countries, and that in any event manufactures are by their nature susceptible of more transitory treatment than other goods. The importance of manufactures is in the general context and the impact on the preferential system as a whole.
This brings me to the fourth head of my analysis. How much does it matter in that context? Here the advocates of entry into the Common Market do what the lawyers call plead in the alternative. They say, first, that manufactured goods are typical because they are small in amount; but, secondly that in any event the preference system has developed weaknesses and contains within itself the seeds of its own dissolution.
As to the first of those arguments, the question of smallness, the validity of it depends on its impact on the system as a whole. Will it turn out to be a precedent which sets the pattern for other commodities, especially for temperate foodstuffs, or is it to be recognised as a concession by us to be followed by compensation by the Six hereafter? I hope that it is the latter, but I have some fears that it may be the former. If it is the former, then our preference system would be in danger of extinction by 1970. How important that is depends on the value one places on it.
That brings me to the second argument, namely, that, because there are weaknesses in the preference system, it does not matter very much if it is allowed to die. If there are weaknesses, surely the right thing to do first is to diagnose those weaknesses and ascertain their causes. The weaknesses are not due to any unilateral villainy on the part of members of the Commonwealth. As my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) pointed out in his speech of admirable clarity yesterday, preferences are the subject of bilateral agreements. If they are modified, it is by mutual consent.
The real weaknesses of the preference system are not to be found there at all. They are to be found in other respects. First, the erosion by inflation where duties are fixed in money terms; and, secondly, by the provisions of the G.A.T.T. which prohibit the making of new preferences and, in effect, prohibit change in the value of preferences save only in a downward direction. If those be the weaknesses, surely the House must ask: are they really permanent? Are they ineradicable? Are they incurable? Surely, having diagnosed weakness, a practitioner, be he doctor or be he Minister, has two courses open to him. He can fold his hands and watch the patient waste away, with suitable bedside murmurings about the inevitability of death and decay. Or he can seek to do something about it. I advocate the second course in co-operation with our Commonwealth friends.
If it be the intention or even the contemplation that the preference system should go at the end of the transitional period in 1970, then we must face the still larger question: can we be certain that our Commonwealth as a whole will survive the demise of the preference system?
I entirely accept my right hon. and learned Friend's point that the provisions of G.A.T.T. are one of the major stumbling blocks. But does he suggest that there are any members of the Commonwealth who are prepared to go to the G.A.T.T. countries and ask for waivers on that ground? Will my right hon. and learned Friend tell us who he thinks would do it?
That is what we have to find out.
Is not my right hon. and learned Friend aware that they have refused to do precisely that?
I am sure that my hon. Friend would not dissent from the proposition that we should seek to take the lead in securing an amendment of the G.A.T.T. which would enable the preference system to work in the context of the 1960s. If we do not do that, then we and the Commonwealth Governments—this is not addressed solely to the Government here; it is addressed to the Commonwealth Governments as a whole—have to face the question about the continuance of the Commonwealth.
It is true that the economic tie is only one of our ties with the Commonwealth. There are others. There are political and constitutional ties, historic and traditional ties—and emotional and sentimental ties, and none the worse for that. But, nevertheless, it is true, as has been pointed out in the debate, that the Commonwealth is not, and cannot be, a tightly institutionalised organisation on the lines of the Common Market. It is, therefore, a fact that the formal arrangements of the Commonwealth lie almost entirely in the economic and trading spheres. If we dispense with those, we run a double risk: we cut away the formal links with the Commonwealth, and we raise also the feeling that perhaps Britain does not care as much as it did.
My feeling is that the question of the preference system is very near the heart of the matter. Here we approach the unwelcome but possibly inescapable decision: continuance of the Commonwealth or absorption in the Common Market? If the question is overtly put and seen in that way, there is no doubt of the answer. But, of course, these are complex matters, and the difficulty and danger would arise if that were the real underlying decision, but did not appear to be so on the surface. If we reach that position, then we must pray for understanding and strength that our answer be given without hesitation or qualification, firmly and promptly. We should then have to tell the Six that, much as we respect them and would wish to work with them, we can work with them only on the basis of Commonwealth co-operation; that we are, in fact, bound to the Commonwealth and the Commonwealth to us by a myriad of ties, "light as air but strong as links of iron," and that, through the generations, we have, in effect, said to the Commonwealth and the Commonwealth to us, in the imperishable words of the Book of Ruth:
… whither thou goest, I will go;… thy people shall be my people, …
I come to the last point that I wish to make, in regard to sovereignty. My view is that the Treaty of Rome not only derogates from our sovereignty in the ordinarily accepted idiom of that term in international law, but also threatens the distinctively and characteristically British principle of the sovereignty of Parliament, a matter which is very close to the hearts of those of us who sit in this place. It threatens the two fundamental characteristics of the sovereignty of Parliament, which are these: first, that the will of Parliament must be unfettered in its exercise; and, secondly, that Parliament must be the sole lawmaking agency.
The will of Parliament will inevitably be fettered, in fact if not in form, when we come, if come we do, to incorporate the provisions of the Treaty of Rome into our Statute law. We in this House would be faced with a long list of legislation, as yet undefined, in which the sole duty and right of Parliament will be to put its impress on legislation, predetermined not only in principle but as to its various details.
That Parliament will no longer be the sole law-making agency is clear from the terms of the Regulation which has been quoted by the right hon. Member for Huyton (Mr. H. Wilson). Article 189 of the Treaty states that:
Regulations shall be binding in every respect and directly applicable in each member State.
That means that the collective will of the Community would bind the individual life of the British citizen without the right of Parliamentary veto and amendment.
The Leader of the Opposition and the right hon. Member for Huyton asked how that would be done. No doubt it would be done by the promulgation of Statutory Instruments. But they would be the merest exercise in translation. They would simply translate ipsissimis verbis the language of the Regulations. It would be no good having an affirmative Resolution, as has been suggested, because no one could dissent from it. It would be no good having a negative Resolution because Parliament could not carry it. It can be further tested by the inability to repeal it. It is a fundamental principle of Parliament that Parliament cannot bind its successors. But Parliament could not repeal the Regulation because that would be contrary to Article 189 of the Treaty.
The right hon. and learned Gentleman has quoted the Treaty of Rome. If I remember the words aright, they are that the Regulations would be directly applicable. If the Regulations are to be directly applicable, is it not possible that there is no function for Parliament to perform?
The hon. Gentleman is, of course, quite right. That is one school of thought, if I may so put it, in this constitutional discussion as to how it would operate. I took the more favourable case from the point of view of the advocates of the Treaty. I think that in practice it would be done by Statutory Instrument if only, as I have said, on the question of translation.
The hon. Gentleman knows that I like to give way, but I am very near the end of my speech. Many hon. Members wish to speak and I think that it would be quite wrong if I took up more time by giving way to the hon. Gentleman.
These are matters of importance, and no hon. Member should take comfort in the idea that these Regulations cover merely technical or trivial matters. If any hon. Member labours under that misapprehension, let him study Articles 14 and 15 of the Rules made under Articles 85 and 86 of the Treaty of Rome whereby, if it became law, agents of the Commission of the Community would be able to check the books of British businessmen, to interrogate British businessmen, to have access to the sites and premises of British businessmen and, for good measure, to fine them as well.
It is not, therefore, merely a question of whether the matters in regard to restrictive practices and the like are good or bad in the Treaty. It is a question of whether their operation would violate our fundamental constitutional principles. These are matters of fundamental importance. When I raised the issue of sovereignty last year, I knew that I was talking in an idiom which is not part of the everyday language of the British people. But at the same time I knew that I was talking of real things, deeply felt, instinctively understood and traditionally cherished by the British people. They are as natural to us as the air we breathe—little noticed in their presence but valued beyond price in the event of their deprivation.
There rests on this House, therefore, a very special responsibility to study and to understand these matters so that in the future it may not be said that institutions laboriously built up and jealously guarded over the generations fell at the last through ignorance or want of care. If that should come to pass, right hon. and hon. Members will have to plead in mitigation at the bar of history, and it may not satisfy succeeding generations to say we knew not what we did. There is a joint and several responsibility upon hon. and right hon. Members to do what in them lies to secure the principle of sovereignty and the continuance of our Commonwealth connection. Let us hope that the House will, in the vital weeks and months ahead, rise to the level of this responsibility and that the Government will harken to the House.
Throughout the controversy, the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) has made a notable reputation as one of the most determined upholders of British traditionalism in this matter. This being so, he has, quite naturally, received the frequent and vociferous support of my hon. Friends the Members for Manchester, Gorton (Mr. Zilliacus) and Ash-field (Mr. Warbey). Last August, the right hon. and learned Gentleman made a notable contribution about sovereignty, of the success of which speech he several times reminded us today. I think that that was a more effective speech than the speech to which we have just listened. It may be that his resonant but not always very precise phrases are more suited to a discussion of constitutional doctrine than they are to the intricacies of Commonwealth trade. Nevertheless, I am glad that he devoted most of his speech today to Commonwealth trade and our relationship with the Commonwealth because it is primarily about that that I shall speak now. This has become the nub of the controversy.
Nobody will deny for a moment that there are great Commonwealth issues at stake here and great Commonwealth interests which should be protected in the negotiations. I, as a determined advocate of going into Europe, do not believe in doing it at any cost, and I firmly hope that the Government are showing in the negotiations more skill and more determination to protect legitimate Commonwealth interests than they are showing in most other aspects of their policy.
But there are two propositions about the Commonwealth which are being advanced to some extent on both sides of the House and outside which I believe to be totally untenable. The first is that anything which is done in Brussels to change the pattern of Imperial Preference or to change the pattern of Commonwealth trade in any other way is a betrayal of the Commonwealth and a blow to our interests here in this country. The second proposition is that, if things go wrong in Brussels—some, of course, hope that things will go wrong in Brussels—the Commonwealth is an alternative on which we can happily and usefully fall back. I believe that both propositions are quite false, and I shall try to show why.
Why is the first proposition false? In the first place, it implies an attempt to freeze the pattern of world trade, which cannot and should not be done. The pattern of world trade for ourselves, for the Commonwealth, for Europe and for others has been changing in the past, is constantly changing and will change, in the future with or without the Common Market, and to say that nothing must be done to change it, to try to freeze it into the pattern of 1962, would be a hopeless, foolish and misguided policy.
Secondly, it cannot really be argued that to reduce Imperial Preference is a betrayal of the Commonwealth. In my view, it is extremely foolish of those on both sides of the House who claim to be leading friends of the Commonwealth to pretend that Imperial Preference is the essential foundation of the Commonwealth and the very core of the Commonwealth connection. Imperial Preference is a fairly recent development. It is really a Chamberlain device, thought of by Joseph Chamberlain, propagandised by Austen Chamberlain, and introduced by Neville Chamberlain. Quite why this should make it so popular on these benches I am not sure. It is only 30 years old. During those 30 years, Imperial Preference has been almost constantly reduced at the wish of outer Commonwealth countries themselves. In 1937, the average level of preference on British goods into the white Dominions was 12½ per cent. Today it is under 5 per cent. This is not our doing. It is the wish of these countries themselves. As everyone knows, New Zealand reduced Commonwealth preferences in 1957 and Australia did so in 1958.
From any point of view, it is very foolish, I suggest, to regard Imperial Preference as the heart of the Commonwealth connection. Yesterday, the right hon. Member for Thirsk and Malton (Mr. Turton) rebuked my right hon. Friend the Member for Bassetlaw (Mr. Bellenger) for having spoken lightly of the Commonwealth. The right hon. Gentleman said that he wanted to have free discussion, and then he spoke as though nobody in the debate should discuss the Commonwealth except in terms of Armistice Day parades. But even on those terms, did not the Commonwealth fight just as well and loyally in the First World War without Imperial Preference as in the Second World War with Imperial Preference? It is foolish to suggest that Imperial Preference is the centre of the Commonwealth connection. If it is, the Commonwealth connection must be something which is not as valuable as it should be outside these islands, because in the white Commonwealth Imperial Preference is being constantly reduced and in the new Commonwealth it does not really exist at all.
It seems to me that the essential basis of the Commonwealth connection must be that of mutual tolerance and self-determination for all the member countries. Supposing that, not in our own interests but because we were forced to do so by rather extreme statements issued by some Commonwealth statesmen, we felt it necessary to draw back from Europe, the Commonwealth would then, in fact, be imposing a veto upon our freedom of action which no other Commonwealth country would allow us to impose upon it. If we then wanted to try to fall back on a tighter Commonwealth, I could not imagine a worse beginning for doing that than the mistrust and recrimination which would inevitably follow from having allowed such an unreasonable thing to happen.
Is the Commonwealth in any real sense a true alternative to Europe? Greatly valuable though I think the Commonwealth is, I cannot believe that it can be that. Let us consider, first, the economic aspect of the matter.
I believe that the outstanding advantage—the only criticism I should have of the speech by my right hon. Friend the Leader of the Opposition yesterday is that he did not, I thought, attach enough weight to this—which would follow from our going into Europe is that by doing so, and only by doing so, should we become part of this large mass growing home market. If we do not do it, we shall, in five or ten years, be unique among the major industrial exporting countries of the world in not having behind us a home market of 100 million or above. This is a disadvantage which we cannot afford.
It is not a question of balancing one degree of preference in Europe on so much per cent. of our exports against another degree of preference in the Commonwealth on so much per cent. of our exports there, nor is it a question of going into Europe in order to switch all our exports to Europe. It is a matter of becoming part of a large base from which we can successfully export to the rest of the world. European countries do not sell only to the countries of Europe. Goodness knows, if the Germans did only that, a great deal of our export problems of recent years would not have existed. This is the essential economic point, in my view, that, without going into Europe, we should be at a unique disadvantage.
As I think the House now appreciates, the economic advantage which we should have by going into Europe is something which the Commonwealth cannot possibly give us because there is not a single Commonwealth country which would allow British goods a free run in its home market, for the perfectly good and simple reason that almost all the Commonwealth countries want to build up their industries behind the protection of tariff walls.
Even if it were willed, which it is not, by the other Commonwealth countries that we should form with them a tight exclusive autarchic economic unit, the Commonwealth would be a most unsuitable and unbalanced unit for this purpose. I will give one simple fact which indicates why it would be an unsatisfactory unit. The Commonwealth contains half of the under-developed peoples of the non-Communist world and it contains one-tenth of the developed peoples of the non-Communist world. To put that one-tenth together with the other half and to imagine that they would constitute a natural unit seems absolute nonsense. If it were done in any tight autarchic sense, two things would follow. We should cut the developing Commonwealth off from aid and markets outside the Commonwealth which they need and ought to have, and we should impose upon this country an economic strain which it could not possibly bear. To do so would be a guarantee of our continuing to stagger sluggishly along, straining under excessive economic burdens, as we have been doing recently. Therefore, from the point of view of tight economic co-operation, the Commonwealth would be a most unsuitable unit.
What about close political co-operation? In analysing the prospects here, one must inevitably look at the Commonwealth to some extent in two parts, the new Commonwealth and the old one. The new Commonwealth, as has been said, has the great advantage of being a disparate group containing countries at very different stages of development and peoples with different-coloured skins, different religions, different cultures and so on. The reverse side of this is that it is a unit which it would be extremely difficult ever to draw very closely together in a political sense. I think that hon. Members on either side deceive themselves if they think that there is a great role for Britain in the future as a leader of uncommitted, newly free developing nations. I do not believe that these nations really want to be led by anybody but themselves, certainly not by the major ex-colonial Power in the world. The belief that they are longing to fall in behind our banner—a banner on which at the moment is blazoned "Economic lack of success"—and be led by us is a fallacy. If one doubts this, one has only to look around the Commonwealth.
If one is thinking of an exclusive relationship between the United Kingdom and the other Commonwealth countries, one should ask oneself whether any of the Commonwealth's major members look to their relationship with us as being of exclusive and prime importance. Does Canada do it? Canada wants to preserve the balancing position, but if she had to choose she would, I think, regard her Washington links as more important than her London links. Would India do it? From a political point of view, I think that India would regard her position, perhaps more hopeful in this respect than ours, as a sort of leader of the uncommitted world as her prime political rôle for the future. Even from the economic point of view, I suspect that in Delhi it is now thought that the aid India can get from Washington is likely to be more important than anything we are likely to be able to give. Does Ghana do it? Does Ghana look exclusively to us? No. I believe that Ghana would regard her pan-African outlook as of more importance than any exclusive relationship with the United Kingdom. Therefore, any idea of an exclusive Commonwealth to which we can turn in cutting ourselves off from other associations would be extremely unwise and misguided.
My hon. Friend is making a passionate denouncement of certain views. Would he care to indicate whom he is attacking? I have heard no one in the House so far suggest that we are aiming at achieving an exclusive or autarchic Commonwealth.
I am not concerned primarily to attack anyone. I am trying to point out that it is a fallacy to think that it is right for us to say that we cannot go into Europe because that would be betraying what should be our exclusive relationship with the Commonwealth. There is no contradiction between a European and a Commonwealth relationship, rightly and sensibly interpreted, but increasingly, to some extent on both sides, the Commonwealth relationship is being built up into a completely unreal myth. I am concerned to point out the false characteristics in that.
I have come to the end of what I want to say about the Commonwealth. May I say a few words, in much broader terms, naturally, than the Lord Privy Seal, who knows so much more about it, about what seems to be the present state of the negotiations and the question whether what one may call the noises off, from President de Gaulle and to a lesser extent Dr. Adenauer, lessen first the desirability, and second the possibility, of our successfully getting into Europe?
I will deal first with the desirability. Any dislike or distrust which I may have of certain aspects of the Governments of France or Germany, or any other country, does not lessen my desire to get into Europe, because my desire for Britain to be in Europe has never been based on a close support of the policies of Dr. Adenauer and General de Gaulle, nor has it been based on a blindness towards possible future political instability in France or the rather murky political past of Germany, although I do not think it useful or desirable to draw constant attention to that. Equally, one should not ignore these considerations. They should be in the back of one's mind.
What seems to me the deep fallacy of those who say that they do not like the France of de Gaulle or the Germany of Adenauer, and therefore that we must not touch Europe at all, is their belief, expressed by my hon. Friend the Member for Stockton-on-Tees (Mr. W. T. Rodgers) in his striking maiden speech today, that by not going into the Common Market we somehow exclude Europe from existence in the world. Europe is there, 21 miles away from us, and we do not insulate ourselves from it by not going into the Common Market. Anyone who looks back on the history of the past 50 years cannot possibly believe that, in or out of the Common Market, we can be indifferent to what happens in France and in Germany and between France and Germany. The extent to which one has doubts therefore seems an overwhelming argument for getting into Europe and seeking to influence the course of events in Europe, instead of standing outside rather self-righteously clinging to our little corner of sovereignty and hoping that the Channel, which has been so ineffective in insulating us from these difficulties in the past, will somehow be miraculously effective in doing so in the future.
What about the possibility of getting into Europe? So far it seems that the noises off, as I have described them, have had little effect on the course of the negotiations in Brussels. I think that that is the Lord Privy Seal's view, and I hope that it will continue to be, but we should be foolish to exclude the possibility that the French, under instructions of their President, may at some stage in the negotiations become extremely difficult and extremely stubborn.
If that happens, what should our policy be? We should be stubborn, too, and go on negotiating, and on no account flounce out of Europe, saying, "They will not have us. Therefore we abandon the negotiations". I should not be pushed up against a deadline of the Commonwealth Prime Ministers' Conference or any other date. If necessary, I would ask the Prime Ministers to come back later, having given them an interim report. I should not be pushed up against such a deadline. Equally, on no account should I withdraw our application to join. I should keep it in and go on negotiating.
Having made an application to become full members, I believe that we are in a far stronger position than we were previously. Previously, when we put up half-way house proposals the French were easily able to show their other partners in the Six—in some cases they hardly needed to do so—that they were unreasonable proposals. It would now be much more difficult in the long term for them to carry their other partners with them in a constant policy of opposition to our membership.
Another important change in the situation is that before we tried to join the Market, the American Administration believed that it was the right thing for us to do. Now that we have applied, if we fail to get in, the American Administration on the whole will blame the French and not us. But I think that the most disastrous thing would be, if anything goes wrong, to say, "Europe does not want us. We do not want Europe either. We will turn back in upon ourselves". It would not, I think, be back upon the Commonwealth; as I have tried to show, that would not happen. In effect, we should turn back in upon ourselves.
There are times in the history of all nations when to turn inward may be a necessary and even a desirable thing. The year 1940 was such a time for this country. But it is certainly not a desirable thing to do in all circumstances and at all times, and I cannot imagine a worse moment for us to do it than 1962. As a nation our great danger today is that of being inward-looking, sluggish, complacent, rather frightened of the future and suspicious of those outside us who seem to be doing rather better than we think they ought to do. At the same time, there is running through the country, partly associated with the rather quick decline in our status as a great power, a streak of latent xenophobia. If we recoil from Europe it could grow and attain extremely dangerous proportions. Nothing could be worse than a sudden recoil from Europe at this stage.
I hope that it will be possible to get good terms. It would be a mistake for anyone in the House or Europe to think that those who are ardent Europeans in this country believe in going into Europe on any terms. I do not think that anybody holds that view. But we believe and hope that terms can be achieved which will enable us to go in without betraying anybody and yet achieving and contributing a great deal in the future.
In listening to the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) I felt that before he was interrupted he was to a certain extent tilting at windmills. There are none in the House but there may be some outside. I do not think that the alternative is the Commonwealth, on the one hand, and Europe on the other.
I disagree with my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) to this extent: we were right to go into these negotiations last August and to have this opportunity of seeing how the discussions have continued. Having listened to the interim report yesterday and today, I cannot help feeling that much has been given away in principle and not very much gained. We seem to have given away the principle of the 20 per cent. common tariff reduction; in the discussions which we have had on manufactured goods from the Commonwealth; and as far as I could follow the Minister of Agriculture last night, we have committed ourselves in principle to some operation of price control which—the kindest thing I can say—seems quite unworkable. In any event, if it works it will involve such an enormous pile of bureaucrats that I believe that it will become extremely frustrating. Those of us who have considered the Coal and Steel Community also feel that if we enter that there will be a great increase in bureaucratic control over those industries.
We also see in the negotiations a new move to accept some form of political evolution. Those who think that we may be able to guide or to restrict the political federal aspirations in Europe are wrong; if we go into this, we must do so with a knowledge that we shall work together with our partners both economically and politically. I warn those who think that we can go in with the idea of trying to restrain a political development towards federation in Europe; but I am certain that, as the right hon. Member for Huyton (Mr. H. Wilson) said, that would lead to a state of destruction.
My right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones) made a starry-eyed speech yesterday, but it did not come down to the practical effects upon our industry and our economy. I want to look at the likely short-term effects of this union upon British industry over the next five or ten years. This has not been brought out in the debate so far, although there was a reference to the financial approach of the City of London. It is fair to say that at the moment, by and large, the feeling of the financial centre of the City of London is in favour of joining the Common Market.
If, however, one looks at industry there is a different picture. The Lord Privy Seal said that the 20 per cent. tariff reduction had been accepted by industry. This must be taken with a great deal of circumspection, because we have many facets in industry. First, we have the civil service of industry, the paid directors of the associations, who are the officers of the people who employ them. By and large, they are in favour. Next, there are the leaders of the great combines in industry, and by and large they are in favour because they appreciate that if we go into the Common Market it will be a battle of the giants and will lead to cartels and building up big combines. But hon. Members in their constituencies are beginning to feel that there is a certain reservation from the smaller manufacturers. These are people who do not have a lead in the great federations and associations of industry. We must think about them, and also about the workers, who will be very much affected in the next five or ten years if we go into Europe. We have not given sufficient weight to this.
I want to talk, first, about wages and, secondly, about production. Leaving aside questions of comparable wage rates, I believe that the British workers enjoy a higher standard of living than a great many comparable workers on the Continent. I will give only one example, because I do not want to take up time. Let us compare a steel worker in Sheffield with a steel worker in Luxembourg or a coal miner in Durham with a coal miner in the Ruhr. They all receive a wage of about £17 a week, but the Continental worker has to pay £2 10s. a week more in rent and possibly a £1 a week more for food. This means that the British worker has an extra £3 10s. to spend, and by and large these workers have bought themselves two things, motor cars and television sets. Hon. Members must appreciate that if we go into the Common Market on an equal basis and find fierce competition, and if the European worker is content to go on his bicycle to work and not to have a television set in his house— hon. Members have only to go to the Ruhr or Luxembourg to see this—then either our workers must give up their motor cars and television sets or they will demand more money to keep the instalments going.
They have not cars.
Many of the steel-workers in Sheffield have them. One has only to look outside some steel factories to see this. I am delighted that this is so. We must appreciate that there will be this squeeze on the standard of living of the British working man. He will demand more wages and that will lead either to industrial unrest or to increased wage demands, which themselves will again make us uncompetitive.
Secondly, on the question of production, we have had here since 1933, under a protective tariff set up by the Conservative Government, a number of small industries grow up which, if we go into this union, will now have to meet competition from the Continent. This will inevitably mean a redeployment of this type of industry, and this again may lead to a certain amount of industrial difficulty and unrest. I think that we must appreciate that this will be the inevitable result.
Moreover, we have the picture a little clearer with regard to food prices. In the discussions yesterday and today on agriculture and on the Commonwealth, no hon. or right hon. Member has mentioned the effect of increased food prices at home. This will be a very serious problem. My right hon. Friend the Minister of Agriculture last night referred to the farmers, but no one referred, for instance, to my constituents in Sheffield who have to buy the food. I have seen some figures, and I think that they are reasonably accurate, which show that if the comparative price level on the Continent were instituted here it would mean that the average wage earner would pay about £1 a week more for food for his household; it may be higher than that. This again will lead to a certain amount of unrest.
I say to the Secretary of State and to the Government that they must also appreciate the political consequences. It is very important that we should think of what will happen in the next five or ten years to the popularity of the Government which brings about these consequences. I am not talking about the long-term effect. I believe that at the end of 10 years or 15 years, all things being equal, the position may be rectified.
I am interested to note that a large group of the people who tend to support it are the younger people because they can see their own futures further ahead. Some of the older people, particularly in industry, who thought that they might have another five years on an easier passage after two world wars and the slump of the 'thirties have more reservations. Nevertheless, it is a fact that must be taken into account by those of us who live in the political world.
My hon. Friend was talking about the items that are pre-empted out of the workers pay-packets. In fact, if food prices go up the taxation involved in farm support will go down, and that might be very beneficial to the country.
That is rather what I had hoped. It may be so on home-grown food but, so far as I can see, the amount of money that will be brought in by import duties will not come to the taxpayer by way of benefit; it will be paid over to Brussels. What will happen to it then I do not know. It will not have the amount of advantage which I had hoped might have come back to the taxpayers.
I turn to the advantages. I have tried to express to the House what the disadvantages seem to me to be. I have gathered from the various arguments put forward yesterday and today that there are three basic arguments in favour. The first is the question of the stronger economic unity of Britain and Europe, as put so forcibly by the hon. Member for Birmingham, Stechford and many others.
The second advantage is the wider market of 180 million extra customers, and the third advantage, if it is an advantage, which has been mentioned by the Leader of the Opposition and other hon. Members opposite, is the threat of cheap labour breaking the wage spiral and leading to more efficient production. We must appreciate that there are some people in favour of the Common Market for that very reason. It is no use our being ostriches about it and saying that they are not.
I take the first suggested advantage in more detail, the stronger economy of Europe and Great Britain. I went with the hon. Member for Coventry, North (Mr. Edelman), the Secretary of State and others to The Hague in 1948 when there was the first talk of a Council of Europe. At that time, we believed that the greater unification of Europe would be at least a bulwark against the rising tide of Communism. When the Council of Europe was set up it was hailed as a great step forward. But within a year, Mr. Ernest Bevin, the Foreign Secretary, had produced N.A.T.O. and all that went with it. Once that had happened and bigger and wider areas had been brought in, the trips to Strasbourg become shorter and shorter in period and less and less effective. I should like to put that analogy to the House. Let us consider what is likely to happen in the future.
The economic war which I think may come—it will not be a shooting war but an economic war—between the great Communist ideal and way of life and the West will be intensified over the next ten years. We cannot look to the democratic capitalism of the West being divided into two camps. That, I believe, would be fatal, and I do not think that it will happen. We shall not see Europe plus Great Britain on the one hand, and the great American economy on the other. Already we are seeing the President of the United States making overtures about the liberalisation of trade. Twenty-five years ago it would have been quite unthinkable that America would have troops in Europe in peacetime, but she has now. As we look further ahead I believe that the problem is one of much greater liberalisation of trade between Europe and America within the Atlantic area. Within that position we have a very strong part to play. Therefore, to all those who say that if we do not go into Europe there is only a bleak prospect ahead and that we shall be an off-shore island without a market, I would say that that is not true.
I believe that we have a greater and more vital rôle to play in bridging the economies of Europe and America in a larger area, which will effectively compete with the Communist-controlled economies. If I am right, if we go into Europe now and become the seventh, or fifteenth or twenty-seventh, State of Europe, and then find that we are mov ing towards this greater Atlantic community, our position will be very much weakened. We shall be one small part instead of one-third. That is an alternative which hon. Members must bear in mind.
The second point, which is made by many hon. Members, is that there are 180 million new customers waiting on the other side of the Channel. But there are also 180 million new competitors waiting on the other side of the Channel. We have to assess the economic climate of the moment. I agreed with the Lord Privy Seal when he said that Europe has had a great development in the last fifteen years. It has been a development based on availability of labour and availability of credit and on a great demand for resuscitation after the war. Everything that economics and history can teach us shows us that that does not go on for ever. There is a period of saturation. It happened after the First World War about 12 years later, in 1931, and I am not sure that we are not moving towards a period, some 17 years after the last war, when it may happen again. We are seeing what is happening in America today.
If we go into Europe in the next year, at a period of decline, we will find our economic position more difficult. It is in periods of decline of demand of this kind, 1933, for instance, that the Conservative Government put on protection in order to help our industries. We may be moving into a period when protection is necessary, and to go in to the Treaty of Rome at such a time may make our position extremely difficult.
There is another factor about customers and competitors. I have recently been to factories in Dusseldorf and Duisberg, in Milan and Genoa, in Amsterdam and elsewhere, admittedly mainly engineering factories. In almost every case I have found new shops and new machinery, up-to-date plant and men working hard. In some factories at home we have companies using German reparation machines which they obtained 17 years ago and which were 10 years' old then. This is not the fault of the British manufacturer, as has sometimes been suggested, because we have not had the tax concessions which the Europeans have had. Nor have we had the money made available as the Europeans have had. Much of Italian industry has been built up with American money, and a good deal of German industry has been built up with American money, and tax concessions.
If that is the fact, as I believe it to be, this country needs at least three years of re-equipment to make itself really competitively efficient; something which we have not been able to do to the same extent as the Germans and the Italians. They have many entirely new shops built up from nothing. We, on the whole, have had new developments in old factories. Hon. Members should remember that when we start in this competitive race, we shall not have the advantage which some hon. Members seem to think. We still have to borrow money at about 6½ per cent. Yet in the past it could be borrowed much more cheaply on the Continent by Continental industrialists.
Finally, I turn to the question of whether these advantages which I have tried to outline—the suggestion of extra customers, and the suggestion of economic unity—are sufficient to make it worth accepting the hammer of our entry into Europe. If it is inflation of which we are frightened, then we should not go into Europe merely to fight inflation. We have our own methods of dealing with it, sometimes successful and sometimes not, but at least sovereign methods.
We should look a good deal further ahead. We may be able to get the best of both worlds. I still believe that we should go on negotiating, and I still hope that we shall be able to get the sort of terms we want, but I am getting extremely doubtful that we shall. Time is on our side. We have a wider horizon than Europe to consider. I see our part as once again being a bridge between Europe and the New World. Therefore, let us not hastily throw that opportunity away and saddle ourselves with a union which may well bring industrial unrest at home and loss of our political destiny abroad.
I welcome the speech of the hon. Member for Sheffield, Heeley (Sir P. Roberts), not necessarily because I accept all his arguments, but because he imported into the debate some new themes which have been somewhat neglected in earlier speeches. I entirely agree with him that it is not only wage levels which we need to compare as between this country and the countries of Europe, but also what those wages will buy. The two things must be taken in conjunction with one another, and it is to that theme that I wish to apply my speech.
The hon. Member was a little mixed up when he was interrupted on the subject of taxation reliefs being possible as the result of saving on subsidies. He seemed to be mixed up between levies going into the Community pool and the real saving which would arise out of a change over from the deficiency payments system. However, I shall return to that later.
Most of the speeches have been attached to the familiar pegs in this controversy. Many today have referred to Commonwealth trade and others have been about agriculture, how we can deal with agriculture and preserve the standard of living of our farming communities and so on. Those are becoming familiar themes of speeches on the Common Market and the negotiations.
However, I call attention, as the hon. Member for Heeley did, to another test, what to me is a vital test of the success or otherwise of the negotiations, the test of the effect on the British consumer, the British housewife. The right hon. Member for Thirsk and Malton (Mr. Turton) referred to this very effectively yesterday. We had a brief reference from the Minister of Agriculture to the fact that retail prices will go up. Apart from those two references, in the rest of the speeches and in the debate in the Press over the last year, I have always felt that this vital question of how the British housewife is to fare if we go into Europe has been underplayed.
Unless something like a miracle is achieved at Brussels by the British negotiators, the British housewife, if and when Britain joins the Community, will have a very hard knock. Even if the negotiations turn out much more favourably than any of us dares to hope, she will still find week by week that the prices which She has to pay in the shops, especially for foodstuffs, will be a shock.
Perhaps all the conditions which hon. Members have been putting forward as necessary to be satisfied can be satisfied to some degree, but a price will have to be paid for them and it may be that that price will be put upon the housewife. I recognise that not all the argument is on one side, just as it is not always on one side in any of the aspects of this complicated problem. For example, if we go into the Community the British consumer will get some advantage with fruit and vegetables.
Our horticultural industry will probably suffer, but the consumer of those commodities will be better off. Imports will come in from the Continent duty-free. Furthermore, if the horticultural industry has to pull up its socks and put its house in order in such matters as grading and packaging in order to compete with goods from the Continent the consumer will benefit still further. The consumer of Continental wines will also no doubt derive some benefit if we join. But I suggest that when we weigh in the balance the advantages to the consumer against the manifest and manifold disadvantages that will arise unless this miracle of negotiation is achieved at Brussels, it is clear that the British housewife will have a raw deal.
When I entered into informal conversations in Brussels a few weeks ago it was said that the agricultural system now being planned within the Common Market will ensure that within Europe commodities are grown in those areas best suited to them. Reverting to the question of horticultural imports, there is obviously sense and logic in growing things where the climate is best suited to grow them, but if that is so in relation to horticulture and Europe it must surely apply to the production and consumption of food on a world scale. Surely the British consumer is also entitled to have the benefit of imports of wheat from the prairies of Canada, if that is the place where wheat can most efficiently be produced. Surely he is entitled to have the full benefit of beef from Australia, if that is the place where cattle can best be reared.
The suggestion that the sensible thing to do is to produce things in the areas most suited for them and to let trade bring the advantage to the consumer applies on a world scale as much as or even more than it does within Europe.
I have tried to follow these discussions as closely as I can, and I have found that even the keenest advocate of our joining the Common Market has to admit—as the Minister of Agriculture admitted last night—that retail prices will rise. Estimates vary. There is a good deal of guesswork, and I am in no position to make an estimate of the increase in retail prices. But the Government should be in a position to make an estimate. They ought to be able to acquaint the British people with the facts of the present situation. They have given us very little indication of the effect upon the housekeeping of the average British family which will result from these negotiations.
Even if they are not in a position, at this moment, to make any useful estimate on that point, they must be in a position to do so when they have concluded the negotiations. I suggest that in September it will not be sufficient merely to tell the visiting Commonwealth Prime Ministers what will be the effect of the external tariff on Commonwealth trade, but that they must tell the British housewife what the effect will be upon her housekeeping.
In its 1951 election campaign the Conservative Party said in its manifesto:
A Government will be judged according to the effect of its programme on rising costs and prices.
I suggest that the outcome of the present negotiations will also be judged largely by that criterion. I do not suggest that that is the only standard of judgment; many other matters must be taken into account. Nevertheless, it is right to call attention to that most important standard of judgment that we should have constantly in mind.
The Government already know that they will have to abandon the British system of agricultural price support and deficiency payments. They already know that this will mean a transfer of the burden from the taxpayer to the consumer. Calculations have been made that this will mean a rise of a least 2s. per week per head in the country's food bill. That estimate having been made, the point immediately arises—as it arose in the intervention during the speech made by the hon. Member for Heeley—whether there will be a saving to the taxpayer of, shall we say, £250 million, and whether the Chancellor will not therefore be able to cushion by taxation changes the effect of the increase in the cost of living.
That is a possibility, but, after the experience of the last two Budgets, are we entitled to be confident that those who will suffer most by the increase in the food bill will get proportionate compensation from tax changes? I do not think that we can be at all confident that that will be so. In the last two or three years the tendency has been to transfer the emphasis from direct to indirect taxation. The people who will have to bear most of the burden of the increased price of food will be those on retirement pensions and those with large families, in whose weekly budgets food is a most important item of expenditure. Those are the people who are also paying proportionately more in indirect taxes. Consequently, I fear that when these negotiations have been worked out the people to whom I have referred will find that they are not only paying more for their food but more in indirect taxation.
I want to develop the question of taxation a little further. My right hon. Friend the Member for Huyton (Mr. H. Wilson) pointed out that under Article 99 of the Treaty of Rome the Community will require to harmonise its taxation systems. He gave us some figures showing the extent to which the British direct taxes form a much bigger proportion of the total revenue than is the case with our Continental neighbours. In the United Kingdom, 48 per cent. of the revenue is raised by means of direct taxes, but among the countries of the Six the proportion is distinctly lower. Consequently, when our tax system is harmonised with those of continental countries it is likely to be made more and more regressive, because the tax systems on the Continent are more regressive than ours.
The Budget which we debated recently prepared the way for this harmonisation. In one of our debates I made the point that it was clear that the Chancellor was moving away from the traditional British pattern of Purchase Tax towards a system of a sales tax, which is prevalent on the Continent. He has extended Purchase Tax over a considerably wider field and has doubled the lower rate of Purchase Tax from 5 per cent. to 10 per cent. Before long we are likely to find ourselves faced with a tax of about 15 per cent. on a wide range of commodi- ties which are not at the moment subject to Purchase Tax.
Some hon. Members opposite might welcome that development, but from the point of view of the consumer, and especially the consumer with inadequate means, this is an unfair system of taxation. I would not welcome it. But that this is what is in the Chancellor's mind is clear from his Budget speech, when he said:
I believe that we must begin to reform the structure of Purchase Tax, particularly if we are to go into Europe."—[OFFICIAL REPORT, 9th April, 1962; Vol. 657, c. 991.]
It is therefore more than a suggestion; it is a declared objective that we are going to reform our system of indirect taxes to bring it more into line with the system operating on the Continent. That would be a very retrograde step from the point of view of consumers.
In addition to the higher prices which consumers will pay and the adverse tax changes which they will face, there is another danger—the danger that consumer standards will fall. It is a very difficult exercise to harmonise the standards which prevail in a number of countries. It is all too tempting for the negotiators to take the easy way out of a difficult situation by agreeing to the lowest common denominator.
I want to give one illustration of this. I have here what I suppose might be described as the Belgian equivalent of Which?, with which most hon. Members are familiar. This document contains an article on the harmonisation of the regulations concerning colourants permitted to be used in the manufacture of food. The magazine is most critical of the harmonisation proposals which have been put forward within the Community. It points to the danger that the standards are distinctly lower when they are pooled than those which exist in many individual countries. I want to read one or two quotations from the magazine. The translation is my own, and therefore not to be trusted too much, but I think that I have conveyed the meaning of the criticisms. The magazine says:
As we have feared for a long time, harmonisation has allowed the rehabilitation of certain suspect food colourants not authorised in several member States … The directive of the Common Market has not given first
place to the necessity for protecting the public health … At no time have the authorities of the Community seen fit to seek the advice of consumers … This proves once more that the harmonisation is conducted with the prime purpose of protecting industry.
That is only one item of consumer protection, but it is sufficient to make me hesitate as to whether from the consumer point of view the linking up of Britain with the Community will be a good thing.
Some hon. Friends and I endeavour to watch political affairs distinctly from the point of view of the consumer. In the past we have had to complain when we have felt that our agricultural price support system is weighted too much in favour of the farmer as against the consumer or taxpayer, but however critical we have been of the current system in this country we are ardent supporters of it by comparison with the system into which we are likely to be plunged. For us it would seem a case of jumping out of the frying pan into the fire.
On other occasions, we have complained about the incidence of Purchase Tax and the way in which that is a regressive tax unfair to the consumer element of society, but however critical we are of Purchase Tax and all the anomalies and unfairnesses we see in it, we very much prefer it to the sales tax we see in operation on the Continent.
We do all we can to increase standards of consumer protection in this country, not with any very active support from the Government. We make occasional slow and painful progress. The danger I see is that instead of making progress if we join the Common Market we may slip back because the standards which will be applied will be those of the weakest of the member States.
For these reasons, when we look at these negotiations and when we look at the question of Britain joining the Common Market from the point of view of the consumer, I find the prospect somewhat depressing. I hope that our negotiators in Brussels will be firm in insisting that the best of our British experience in the matters to which I have called attention will be maintained in the arrangements reached as a result of the negotiations, but I rather fear that will not be the outcome. I rather fear that in taxation matters and these other matters it will be a case of our con- forming with the Six rather than the Six adapting their systems to ours. For that reason I believe this country will be better out of Europe than in.
The hon. Member for East Ham, South (Mr. Oram) was quite right from his point of view and his knowledge through the Co-operative movement of the interests of consumers to concentrate his speech on that aspect of the matter. When I talk of agriculture, as I hope to do in the few minutes I desire to detain the House, if I can remember I shall probably refer in more detail to his speech.
Before I do so, however. I want to say one or two words about the political aspect of this proposed union with Europe. The Preamble to the Treaty of Rome says in its first words:
Determined to establish the foundations of an ever closer union among the European peoples.
It is clear that legally that does not involve us in a political union with Europe, but I was alarmed by the remarks both of the right hon. Member for Orkney and Shetland (Mr. Grimond) yesterday and of my hon. Friend the Member for Sheffield, Heeley (Six P. Roberts) today that if we join the economic union it is only a question of time before we have to go into the political union. That is something we have to watch extremely carefully. What are we to be landed into? If it is a federal structure, I am afraid I could not accept it, because the various States with a certain amount of home rule would be combining in a sort of United States of Europe. Incidentally, I think the Scottish people might well demand home rule—[HON. MEMBERS: "Hear, hear."]— but I do not want to accept that. If it is a confederal structure, I would be prepared to accept it on certain terms. I shall watch in future as I have watched in the past the progress of this Fouchet-Cattani Committee very carefully indeed. When the crunch comes, I do not want to vote for something which I am not perfectly convinced will retain our independence and sovereignty and the independence and sovereignty of the House of Commons.
There has been a great deal of talk in this debate about the Commonwealth and I do not want to labour the point very much more. I was in the House in 1932 when the late Neville Chamberlain had his great triumph and was applauded by everyone in the House when we went over to tariffs and Imperial Preference. I was in the House, too, when the Ottawa Agreements were debated later that year. It is a sentimental attachment in a way which I still retain for the ideal of Commonwealth Imperial Preference.
No, because I want to speak shortly.
The hon. Member's history is a bit wrong. Everybody approved.
The fact is that that agreement and that change of policy were made at a time of acute unemployment after the 1929–1931 recession. In my view, they were made too late. If it had been done by Joe Chamberlain instead of Neville Chamberlain it would have been more to the point. In the intervening years the Commonwealth has grown up. Now it consists of sovereign and independent States, some of which are under the Crown and some republican. Although I have a sentimental attachment to the views of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), I am forced to the conclusion that the Empire as I knew it has grown up and that the conditions are entirely different now and must be looked at in a different way.
Therefore, I do not disagree with the export trade from the Dominions being thrown into the pool as a gift towards the ideal of a Common Market, but we must realise that if we are doing that Commonwealth countries are going to do the same to us. It is not only a white Commonwealth we are talking about now. India and other countries have a large trade running into hundreds of millions of pounds. I am not yet convinced that by giving in on the one side we may not be risking a great deal on the other. Commonwealth countries are concerned about manufactured goods. It seems that we have a market there which retains preferences with the sentiment, and if the preference goes the sentiment will go too. Those countries more and more will tend to think that they can expand their markets in other countries, and thus we shall lose those markets.
One thing about Asian goods I must mention, because it is an important constituency problem. Most of the row has been about cotton, and I am interested in jute. Jute is a very special problem. Before I can agree, when the crunch comes, to vote, I must know exactly where we are to be in relation to the jute trade. The European Jute Trade Association has views on this matter. I shall not go into details about what they are, but I believe that if the British Government backs the European Jute trade in its proposal it has a better chance of keeping the trade of Dundee and district prosperous than it has with any proposal that any European Community or the British Government have put forward up to now. It is of very great importance, because the jute trade is so concentrated in my area.
One word about temperate foodstuffs, because those seem to be most difficult to deal with. It does not seem that we should agree to anything that would be only temporary. What we have to do is to get some agreement which would be permanent in character and would assure a market for the products of New Zealand, Australia and Canada in the long term and not merely in the short term. Is there not a great risk of the break-up of these intangible ties in the Empire which still unite us by the collapse of the tangibles? I leave it at that.
I want to concentrate now on farming. I think I am the first hon. Member on either side on the back benches to talk about farming to any great extent in this debate. As other hon. Members have read from the Treaty, I wish to read from Article 39. It says:
The common agricultural policy shall have as its objectives:
Those objectives we can all agree with. The real point is how they are to be worked out. The Minister of Agriculture in his speech last night revealed some of the difficulties. First, there was the difficulty about the Six themselves in coming to any agreement among themselves by the due date and the dodge they had to take of stopping the clock for fourteen days when they shut themselves up in their room until they signed an agreement. It was an agreement which is extremely vague and lays down principles only. It has not been really worked out at all. The working out is still going on.
There seem to be certain things on which we must insist. Therefore, I ask the Minister who is to reply to the debate, is the Annual Review accepted? I am not quite sure if it is. Is it to be an Annual Price Review or not? The two things are different. How long is the transitional period to be? How are we to achieve a balance between the various commodity arrangements which are being made?
My right hon. Friend said last night:
The fact that such a delicate balance will have to be drawn means that it must be a total, comprehensive and pretty sophisticated agricultural policy as a whole, by means of which influence can be brought to bear both upon pricing policies and also upon levels of production."—[OFFICIAL REPORT, 6th June, 1962; Vol, 661, c. 607.]
How are we going to achieve that? At the moment there are just a series of prospective provisional commodity agreements. How are we going to get a balance overall in Europe with a sophisticated comprehensive policy, and how also are we going to retain the liberty to maintain some sort of balance for ourselves?
I think that if I refer to one or two of the commodities it will be seen what I mean. Let us consider cereals, that is to say wheat, barley and rye. Incidentally, oats must come in because although there is no international trade in oats, if we, Denmark and the Scandinavian countries come in, there will be international trade in oats and therefore we must include this cereal in our consideration. I am going to use some of the strange words used by my right hon. Friend, such as target prices, and intervention prices with a variable level.
As an illustration of what I mean, if the target price is fixed high, say £35 a ton for wheat, the whole of Europe will be growing it. So shall we. We will thus distort the whole pattern of production not only here but in Europe. It seems to me that in dealing with the other commodities—and I will mention them in a minute—we have to get through the Commission, through the Council of Ministers, not only a balanced production in Europe, but leave a loophole somehow so that Britain can retain her balance of production in this country.
The whole system of agriculture in this country is based on the fertility of the soil. If we are to be a wheat growing area only, or a livestock area only, without any cereal growing at all simply because of the distortion of prices, then in the end this will not be to the best advantage of British farmers or to the best advantage of our land. We therefore have to try to achieve not only a comprehensive European policy, but to leave a loophole to achieve a proper balance in our own agricultural policy.
As far as I could follow my right hon. Friend last night, he dealt with pig meat and eggs next. There would be complete free internal trade only supported by levies on imports from outside the Community. This is all right for the Six because there is no surplus among the Six of pig meat or eggs, but if we and Denmark go in, and the Scandinavian countries also come in, we shall create a surplus. We therefore must in some way ensure a properly organised market, perhaps on the cereals principle, so that there is adequate protection for the producers in this country, because I repeat that paragraph (b) of Article 39 seeks to ensure a fair standard of living for the agricultural population.
Next I come to milk and dairy products. We have a target price, a threshold price for dairy products, and an intervention price for butter. This is even more complicated than I have said, because New Zealand butter must come into this. I do not think it has been appreciated that in the proposals by the Six so far this threshold price would not only be damaging to New Zealand but would cut off supplies into the Six until prices rose again. How can we treat New Zealand like this? We cannot allow this to happen with a threshold price. Something must be done to fit in not only Danish butter protection, Dutch butter protection, but to ensure for all time, and not just temporarily, a share of the market for New Zealand.
The difficulties in milk and milk products are extremely serious, because the price of milk in Europe is low and comparatively high here, whereas the price of milk products is comparatively low here and fairly high on the Continent. The consumption of liquid milk accounts for 75 per cent. of our output, and the consumption of milk products accounts for 25 per cent. On the Continent it is the other way round. We have a long way to go and some difficult negotiations to conduct not only to harmonise the price of liquid milk but also to ensure a fair market for New Zealand.
Dealing next with beef and veal, we have a tariff of 20 per cent. plus a guide price and a levy on imports on top of the tariff. We also have import licensing for meat products. This is a pretty stiff bill for the housewife to pay. As I say, there is a tariff of 20 per cent. plus a levy on imports if the price does not come up to the guide price. If there is too much meat about—and here we have to think of Australian beef as well as our own—farmers may be all right, but I am sorry for the British housewife who will have to pay a very high price for her beef.
Incidentally, under our existing system—and I mention this because the hon. Member for East Ham, South talked so much about food prices—we must inevitably get rid of the deficiency payment system if we go in. This will mean that the housewife will have to take up some of the price from which she is at present saved by the deficiency payment system. The taxpayers pay the money for her. It is inevitable that these deficiency payments will have to be scrapped, but I think that there must be some limit on the demand on the housewife's purse, and I think that beef is a good example of how imports from abroad will force up the price. It may well be that the guide price will be so high as to make it difficult to sell in some of the markets in Europe.
There is another thing which is of interest to New Zealand and for which there is no provision. I am referring to mutton and lamb. They do not rear many sheep in Europe, so they have never thought about this, but we have a lot of good lambs, and so has New Zealand. Some provision must be made not only for our lambs but for New Zealand's. If we could only induce the butchers of France to cut up lamb properly, French beef would not get a look in.
I disagree with what the hon. Member for East Ham, South said about horticulture. Horticulture has been a vulnerable industry for a long time. They have been protected by tariffs, sometimes specific and sometimes ad valorem, but they are being attacked from Europe. It is not much use having a common tariff around Europe when very little horticultural produce comes in from outside Europe. The competitors are there in Europe, and I am sure that the hon. Gentleman, even though he does recognise the views of the consumers, will realise that if the producers are badly off or become bankrupt, in the end it will not be good for the consumers either.
For instance, if it is found to be impossible to make a profit out of tomatoes, if we go into Europe, and the hon. Gentlemen's consumers will have to rely entirely on Dutch, French or other tomatoes, having starved the British out, they will be no better off in having to pay a higher price to the Continental producers. Therefore, I ask him to be more sympathetic to the horticultural producers of this country, particularly the glass-house ones, who are those most likely to be hard hit.
I am like the right hon. Gentleman the Leader of the Opposition, and I do not criticise him at all for sitting on the fence. We have not reached the stage of the crunch yet. Let us watch what the Government do, let us give them constructive criticism, as I have tried to do, but, so far as things are today, I shall want a great deal more assurance than I have had up to date, on agriculture, on the Commonwealth and on the political side of these proposals, before I would vote for these proposals when the time comes.
I am sorry that I cannot follow the hon. Member for South Angus (Sir J. Duncan) into the intricacies of the agricultural arrangements, but, at least, I agree with what he said earlier when talking of the need for the protection of the jute industry. As a native of the city of Dundee, which is the centre of the British jute industry, I naturally have a great interest in the prosperity of that trade.
Naturally, a good deal of the discussion has been about the Commonwealth, and, I think also fairly naturally, there have been a number of exaggerated claims made for the possibility of the Commonwealth as an alternative to the Common Market. Naturally again, when exaggerated claims are made it is not very difficult to demolish them, and I noticed that my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) quite devastatingly demolished the exaggerated Commonwealth position that has been put in this debate by a number of hon. Members, including the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith). Having demolished that exaggerated claim for the Commonwealth does not dispose of the Commonwealth altogether, and I noticed that my hon. Friend the Member for Stechford rather dismissed the sentimental attachment to the Commonwealth, because, even if the economic advantages to Britain and the rest of the Commonwealth are not as great as are sometimes claimed, sentiment, nevertheless, is a very important thing in politics, as all of us ought to recognise.
Even if the other members of the Commonwealth are misguided about this, and even if they place too great importance on what has happened, for example, about the arrangements for manufactured goods, it is a factor we have to take into consideration. Whether we accept that their concern is fully justified or not, the fact is that they have that concern, which in itself is an important factor in the situation, but one which my hon. Friend the Member for Stechford dismissed far too lightly.
Even if we make that qualification, and even if we prove that some of the Commonwealth difficulties are not as great as they are often made out to be, that is very far from proving that, on the other hand, there are economic advantages to us to a very considerable extent in joining the Common Market, because the two are entirely separate questions. To prove that the economic advantages of the present Commonwealth arrangements are often overstated is not to prove that it would be very considerably to our economic advantage to go into Europe. I think that my right hon. Friend the Leader of the Opposition was absolutely right about this in his speech yesterday, when he said that the balance of advantage, economically, is probably very slight. It has been noticeable that none of the great enthusiasts for the Common Market in this debate so far have taken up the challenge of presenting and proving the economic case in any detailed way. I think that that case cannot be proved, and I do not believe that there is an overwhelming economic case for Britain joining the Common Market. I do not believe that that case can be put, either in this debate or in any other way.
My hon. Friend the Member for Stechford also mentioned one particular aspect of the economic advantages of British entry into the Common Market, namely, the fact that we should be operating from a very considerable home market. Obviously, that is true, but that is very easily exaggerated, because a market of 50 million people is not, after all, a small market in modern terms. It is very easy to treat the economy or industry as a whole, and to forget, when we are talking about exports or Britain's competitive position, that we are not just talking of industry but of particular firms in particular industries. Any particular firm in British industry already has a firm base in the market in this country of 50 million people.
If the anti-monopoly provisions in the Treaty of Rome work effectively—and that is something that remains to be seen—then the argument about the very large home market in the Common Market loses a considerable amount of its validity, because we must deal not with industry as a whole, but with particular firms in particular industries. Therefore, I do not think that there can be any overwhelming economic advantages, for these and a number of other reasons which could be demonstrated, in our joining the Common Market.
If there are no considerable economic advantages, at least in the short-term— and no doubt the long-term may be different, though, as we have so often found in the last ten years, short-term considerations are very important to the British economy—and if we have these difficulties with the Commonwealth, E.F.T.A. and so on, then the whole question of British entry becomes a question of the balance of advantages and disadvantages. There is, to my mind, no overwhelming case in the one direction or the other, and the first thing that ought to be said about this is that it is very dangerous, both from the British point of view and also from the point of view of the Six, to talk in over-dramatic terms about the consequences of British failure to get accession to the Common Market. I think that we talk in over-dramatic terms about this, to a very great extent, because although it would be very serious, quite obviously, if the negotiations broke down now, I do not think it would be an absolute disaster or the end of the world, either for Britain or for the Common Market countries.
The seriousness of the situation would depend to a considerable extent on the attitude we took towards the negotiations, and that is why I deplore the implication, which has so often been found in the speeches of the Lord Privy Seal in particular, that we really must go into the Common Market at all costs. I know that in the detailed analysis and exposition of the Government position, the Lord Privy Seal has not said so in so many words, but anyone who has read the statement which he made last October or the statement to W.E.U. in April or his speeches generally must get the impression that the right hon. Gentleman thinks in terms that it would be an extremely serious, and perhaps even a disastrous, position for Britain if we did not get into Europe.
I do not want to speak about the Commonwealth, because that position has already been exhaustively covered, but about several other aspects which are worth mentioning. Little attention has been given to the question of the position of the neutrals, although we are bound to the neutral countries through the E.F.T.A. arrangements. I listened last month at the Council of Europe to M. Spaak of Belgium on the question of the neutrals' application for association with the Common Market. I was extremely depressed and rather frightened at the tone adopted by M. Spaak. He is not the complete Six but, as one of the founders of the Common Market, he is an extremely influential personality in the present negotiations. What he has to say must be carefully considered.
The tenor of his speech was that if the neutrals want not accession but association they must seriously consider giving up their neutral position. There are special circumstances—for instance, for Austria because that country has certain treaty responsibilities—why they wish to remain neutral. I am not sure that I have a tremendous amount of sympathy with the position of Switzerland, although that country has managed to avoid involvement in world war, which is a considerable achievement. Naturally the people of that country do not want to give up a neutrality which has brought them considerable benefit.
There is also the special position of Sweden. It is my firm impression that Sweden will not become associated if it means giving up the kind of neutral position she has traditionally adopted. It is also my impression that it is not only the United States that is pressing that the neutrals should not be admitted to the Six but that there are strong feelings among the Six that it would be contrary to the spirit and intention of the Rome Treaty if the neutrals were admitted.
If we consider the spirit of the E.F.T.A. declaration and the precise terms of it, we find that we have already committed ourselves. We should make it absolutely clear that we shall not accede to the Treaty unless proper arrangements are made for the three neutral countries, particularly Sweden, because of the implications of the Swedish position to Norway and Denmark.
The question of the future democratic control of the institutions of the Six has not been dealt with sufficiently. This is an important question about which the Government should give us more information. If one reads the Treaty of Rome one is constantly struck by the fact that the initiative in so many cases rests with the Commission and not with the Council of Ministers. The Commission makes proposals which the Council can accept or reject but cannot, in most cases, amend. Thus there is tremendous power in the hands of the Commission.
The right hon. Member for Birmingham, Hail Green (Mr. Aubrey Jones) said yesterday that it was an excellent thing that the Commission was independent and was not subservient to any nation or Power and could, therefore, take an objective view. That is a rather naive view of the Commission, because it is not in any sense a completely independent body. It has a very strong vested interest in the development of the federal idea. In fact, the greatest impetus and movement towards the federal idea came from the Commission. Those in the European political parties who are most concerned with the Rome Treaty and the development of a complete federation want the Commission to be given not less powers but additional ones.
The rather ironic thing is that the European Parliamentary Assembly, which should be exerting some sort of democratic pull or influence on the Commission and should be concerned with bringing the Commission to democratic account, in fact feels the opposite. It wishes to give additional powers to the Commission because it feels that the Council of Ministers is a restraining influence in the development of the federal idea. It is important, therefore, that we should know what the British Government think of the future roles of the European Parliamentary Assembly and the Council of Ministers.
The point made yesterday by the Leader of the Opposition regarding the voting arrangements in the Council of Ministers is important because the Council is the only body which is now really responsible, in the fullest sense of the word, because each of the Ministers has certain responsibilities to his national Parliament. I repeat that we need a great deal more information about this aspect of the Treaty.
It has shocked me to find the readiness with which the politicians of the Six— and I speak from experience of W.E.U.— would be willing to divest themselves of democratic control of the Commission's activities. The argument they use is that it is only by giving more power to the Commission that there will be some movement. That was the argument used by the right hon. Member for Birmingham, Hall Green yesterday and it is a classically anti-democratic one. After all, one of the classic arguments against democracy is that it prevents things being done too quickly and that if one really wants to get things moving one must take away these democratic controls.
The questions of the democratic control of the Commission and the Council of Ministers and the future rôle of the European Parliamentary Assembly are not only important now but they will become increasingly important as the transitional stage of the Rome Treaty continues and, eventually, when the Treaty is finally in operation. The idea of federalism is not concerned exclusively with questions of common foreign and defence policies. If that were the case and if the only points involved were those, while the arguments would be important they would not be of overwhelming importance because, whether we like it or not, Britain does not now exercise a completely independent foreign or defence policy.
Obviously Britain cannot do that, for we have obligations towards N.A.T.O. and the W.E.U. regarding defence and foreign affairs. Thus Britain cannot exercise a completely independent influence, particularly on the question of East-West relations. If the arguments concerned only foreign and defence policies they would be evenly balanced, but there is also the question of the economic union which is implied and, in some cases, specifically indicated, in the Treaty itself. There are certain aspects of the economic union about which we need a great deal more information from the Government.
Several other vital matters have been mentioned; taxation and the important question of the social services. While there is nothing specifically in the Treaty of Rome about the complete harmonisation of the social services there is an implication that the Community will move towards harmonisation. There is no other indication of what is intended, but this is an important matter that must be worked out and kept in mind in the future.
I do not believe that the economic necessities of the Treaty necessarily imply that we should have harmonisation of social services. I do not say that because I believe that the social services of Great Britain are necessarily better than those on the Continent or because I believe sincerely that the way that we finance our social services is better than the way they are financed in the countries of the Six. It is simply that I do not think that uniformity for uniformity's sake is a good thing. Whatever economic advantages there may be in the economic provisions of the Treaty, I do not believe it necessarily follows that we should also accept the principle of harmonisation of social services or the harmonisation of taxation provisions and a whole number of other things which, if not specifically included in the Treaty, are implicit in some of its provisions.
We are entitled to have the Government's view on all these things, because it is not just a question of negotiations on current problems. Most of the current problems can probably be solved. I am confident that the Government will produce some sort of solution. I am not saying that it will necessarily be a solution that we on this side or I personally would be willing to accept. but I think that the Government will produce some solution arising out of the current negotiations.
That is not the end of the matter. Before we decide on the particular agreement that the Government bring forward we shall also want to know what the Government and what the Community of the Six are thinking about the further implications of the Treaty. We have had absolutely nothing about that from the Government so far. I hope that at the end of the debate this evening we will have something, at least briefly and in principle, from the Lord Privy Seal about these various aspects of the Treaty. These are many of the questions which we shall have to take into account before we finally decide whether we shall accept the agreement that the Government will eventually bring forward.
I repeat that there seems to me at the moment to be no overwhelming case either for or against our going into Europe. That makes it all the more important that we get the answers to these questions, answers which unfortunately the Government have not so far even attempted to give.
I do not sit quite so much on the fence as the hon. Member for Glasgow, Craig-ton (Mr. Millan). I go quite a long way, because I am one of those people who believe that it is possible to reconcile the interests of the Commonwealth, the interests of Great Britain and the interests of the Common Market. Everything I have heard in the last two days has encouraged me in that way of thinking a good deal more than I expected it to. If the Lord Privy Seal and his staff can look after the interest of the tropical products of our Commonwealth, if he can get consideration for the low cost manufactures of India, Pakistan and Hong Kong, and if he can deal satisfactorily with the more massive problem of temperate foodstuffs, I cannot but believe that the prospects for the Commonwealth, Great Britain and the Common Market must take a great leap forward.
Beside these three fundamental immediate problems, I must admit that I do not see any great hazards as regards the harmonisation of social services and our own agriculture. I do not even see anything very frightening, alarming or disturbing about the questions of sovereignty other than those we are already committed to under the Treaty of Rome, which are being so fiercely debated within the Common Market. We must by the very nature of the Treaty of Rome as it now is have a good deal of control over these matters. Who knows but that the next ten, fifteen or twenty years will produce entirely new concepts? The main thing is that we have that matter under our control.
At the outset of his speech yesterday my right hon. Friend paid a well-deserved tribute to the officials who serve under him. Anyone who has ever tried to follow these matters and get in touch with the same people in Europe who are dealing with these things must be aware of the very high regard in which Europe holds our officials. Our public servants in these great matters are often regarded as cogs in the machinery, but there can be no doubt that our European friends have come to realise more and more that these cogs are made of very fine metal indeed and that they will undoubtedly play an enormous part in the success or failure of the way in which we handle the details. What seems to me to be so incredibly difficult is the constant surveillance of all the details. These men received a very well-deserved tribute from the Minister.
Most people would agree with my right hon. Friend's statement yesterday that this matter is No. 1 topic amongst the constituencies, the Press and business people today. No issue since the end of the war has aroused such a general interest throughout the community. I have been a frequent visitor to a good many parts of the Commonwealth throughout the last few years, and I can tell the House that very much the same thing is happening there. The country I know best is Canada. I am a frequent visitor there, as well as to the United States. It is remarkable how much more discussed this topic has been and how much better informed the discussion has been in Canada and America over the last two or three years. Not only that, but the idea which took such a long time to capture the imagination of forward-thinking people in this country is now very much to the fore in those countries.
I am not privy to the secrets of the Cabinet in Canada, or those of members of the Government, or those of big business men, or those of the big people concerned in the decisions on policy in these matters. But I read their newspapers; I have to. I confess an interest, financial and otherwise, in several publications in Canada. One could not help noticing over the last year or so how many of the outstanding bankers, heads of insurance companies, the people who control the great extractive industry, business men, and investors have publicly expressed their approval and good wishes for Britain's success in these negotiations.
Canada, like Great Britain, is a great exporting country, one of the biggest in the world in proportion to its population. She is perhaps the best equipped in the world today to meet the needs of the latter half of the twentieth century. The one fact of which so many people are now aware of in Canada is that the European Economic Community is the biggest importer of raw materials in the world. It is the biggest exporter of manufactured goods. It has gold reserves just equal to, if not now slightly in excess of, those of the United States. It has a phenomenal rate of economic growth. Canadians clearly are very aware of this. They are also acutely aware and worried about the fact that four-fifths of Canadian foreign investment is controlled by the Americans. At the last general election in Canada this was a major issue. They are aware that the whole of their motor car industry is controlled by the Americans. Two-thirds of their oil industry is controlled by the Americans. Half their chemical and paper industries, one-third of their aircraft industry, as well as huge stakes in all their extractive industries, are controlled by the Americans.
They now see right before their noses the development of a huge new expanding industrial and capital market of possibly 250 million people. Canada, and Australia too, know full well that the gravest weakness of Britain today vis-à-vis these parts of the Commonwealth is lack of capital. We are not producing enough new capital every year to meet anything like the needs even of the older Commonwealth. They know full well that the banking machinery and the financial organisations in the City of London still have a unique expertise of their own. There is no country in the world can match them. It is still true to say that a good many of the people who are providing capital from abroad are compelled by the very nature of their problems to use the City of London machinery.
Many people in the Commonwealth are well aware that the money is simply running out of their ears in Europe and they do not know how to invest it. I believe that this will present Canada with a unique opportunity when this vast new capital market gets under way. Many people in Canada now realise that Canada's best hope of remaining Canadian may well lie in the influence which Britain can exercise on a potential capital market which in a few years time may well make the Wall Street boys look like country bankers.
I do not see how the obvious and almost certain creation of an evergrowing industrial and capital market, which is already the greatest importer of raw materials in the world, can in the long run be disadvantageous to our Commonwealth. This must be very evident indeed to many of those Commonwealth countries which depend for their livelihood primarily on basic industries or are concerned not only with producing but also processing raw materials. On many of these countries the common tariff will fall very lightly. I am sure that if we succeed in getting the Common Market to accept the long and impressive list of Commonwealth raw materials with which it has been presented—I see no reason why it should not accept them —it must do a great deal to compensate a good many countries for some of the discomforts they will suffer and the adjustments they will have to make. I cannot but believe that if we succeed in getting free entry for raw materials such as newsprint, pulp and paper, zinc, copper and aluminium, the moaning and the groaning and occasional screams from some directions will be considerably muted.
I was very much impressed with a point made by the Leader of the Opposition. It came at the precise point of time in his speech when he fell off his fence for a moment. It was where he said that on balance the economic argument may be favourable largely because of the attraction of foreign, particularly American, capital as a result.
A few days ago, I saw something which impressed me very much in this connection. It certainly reinforces the right hon. Gentleman's view. The publication in which this appeared was called Costs and Competition, a publication by one of the American foundations, I believe, which made some research into the costs of setting up factories in overseas countries. It took the United States as a median, the basic index, and showed the difference in costs. This is a fairly recent publication, and I do not think that the conditions and costs on which it was based have changed very much.
Taking the United States as 100, and taking into consideration the cost of materials, overheads, sales and other costs, the cost of setting up an average sort of establishment in the United Kingdom is on average 16 per cent. lower than it is in the United States. The average cost of setting up a factory in the Common Market countries compared with the United States is only 3 per cent. lower. In other words, there is a 3 per cent. advantage in the Common Market countries if one wishes to set up a new American factory compared with a 16 per cent. advantage if one wants to set up a new factory in the United Kingdom. In Canada, there is a 10 per cent. disadvantage in costs compared with those in the U.S.A., in Latin America a 25 per cent. disadvantage and in Australia a 16 per cent. disadvantage.
These are quite impressive figures, especially at this time when there seems to be a good deal of moaning and grizzling about the ability of British industry to compete. They are the facts, and they are indeed relevant and heartening support for the statement made by the right hon. Gentleman.
My only other point in support of my perhaps quite unreasonable optimism about the Commonwealth is this. Those of us who have spent a good deal of time and energy on Commonwealth affairs in recent years cannot help but be impressed at the immense infra-structure, to use a horrible word, of functional co-operation which has been built up within the Commonwealth over the last few years. This is quite beside trade; it has nothing to do with trade. It has been patiently and carefully built up by the Commonwealth Relations Office and by all the organisations which exist to develop Commonwealth relations, Commonwealth self-help and mutual assistance. Many people here are well aware of the feeling of ever-growing interdependence which there is in many Commonwealth matters in which Members of Parliament are so often engaged.
There is the vast hidden empire of the English language, laws and tradition, which continues to grow. There are the myriad of personal contacts and family relationships. Something like 30,000 Canadian soldiers took English brides back to Canada after the war. Those of us who take part in the work of the Commonwealth Parliamentary Association must be aware of the tremendous importance—which surely becomes more manifest year by year—of Commonwealth Parliamentary co-operation in the Commonwealth. Next to the Crown itself, one of the strongest of the common bonds between us is probably the Parliamentary procedure and consultation, and the machinery for this form of consultation is something with which your Department, Sir William, has had so much to do in building up. This iceberg, like most icebergs, is only showing a tiny part of its surface. It will take much more than a few readjustments in trade to wreck this magnificent structure, which is ceaselessly being built up much faster and more strongly than anyone is likely to tear it down.
I do not feel the least bit alarmed or frightened at the prospect of Britain entering the Common Market on the terms which I hope my right hon. Friend and his colleagues will get. They had better get them!
A day or two ago I took the liberty of commenting on the poor quality of recent debates on foreign affairs and on other matters in the House of Commons. Some of my right hon. and hon. Friends had described a foreign affairs debate as the worst in their very long Parliamentary experience. I ventured to add that Parliament itself seemed rapidly to be becoming the most subservient since the Parliament of Lord North. I wish to retract at any rate part of that criticism, because it seems to me that the debate which we have had during the past two days has been in the highest traditions of Parliament at its best. Almost all of the speeches have been directed to real issues, have been passionately felt and clearly argued.
The interest of the debate has been maintained throughout the two days. There is good reason for that. We are discussing an important question, and the differences of opinion on it do not merely overstep party differences. They do not follow party lines. There are differences in the party on this side and in the party on the benches opposite. I do not know whether the Liberal Party is exempt from those differences. No doubt, as it grows the differences will grow, too, and its members may find themselves in time, because of their increasing numbers, in no better position with regard to unanimity and diversity of opinion than the rest of us on fundamental matters.
Not merely are there differences in this party and differences in the party opposite about the Common Market and all involved in it. One of the significant things, and I think one of the things which have led to the interest in the debate, is that the differences inside the parties do not follow the traditional lines, certainly not on this side, nor, I think, on the benches opposite. The differences do not follow the recognised differences between right, left and centre. Some very good Left wingers are for the Common Market and some very good Right wingers are against it. That kind of distinction in the difference of opinion on the other side of the House holds good, too. This is one of those instances where the desire and opportunity of individual back-bench Members to make a vital contribution to an important debate has led to a great increase in the reality of our discussions and, therefore, to the usefulness of them.
Having said that, I am bound to say that I have not understood all of the discussion. I heard the Lord Privy Seal open the debate yesterday with a very lucid, patient, restrained and admirable speech. But I could not quite see from the argument which he presented exactly why he argued so patiently and with so much difficulty about conditions. My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) has just said that the balance of the Lord Privy Seal's speech was in favour of going into the Common Market anyhow—fight for good conditions, do all that we can in the negotiations to get the best out of them, but always with the notion that the importance of going in was such that in the end, even if we did not succeed in winning all the concessions, modifications and qualifications for which we were pleading, nevertheless the die was cast: we were going in anyhow.
This is the impression which the Lord Privy Seal's speech made on most of us, I think, whether we were with him or against him. This was the prevailing opinion, and if I am wrong perhaps the Lord Privy Seal will correct me tonight. I am sure that the Lord Privy Seal himself would not deny that the balance of his inclination was to go in. Surely that much must be true.
That is the object of negotiation.
I did not understand that that was the object of the negotiation. In earlier debates the Prime Minister told us that he was going to begin by a discussion with the various nations concerned to see whether the conditions were such that an application could be made. It was only when he found that he was not going to conduct negotiations of that kind that he changed his position and decided to make an application to go in, but he was very careful to explain when he asked for the House's approval to make the application that it would be made only in order to enable him to explore the ground and to see whether suitable conditions could be negotiated.
If the hon. Gentleman now says that that was not so, that the negotiations are in pursuance of an application to go in with the balance of desire being to go in anyhow, then he is rather denying what he said a few minutes ago, namely, that that was not the purport of the Lord Privy Seal's speech. No one is saying more than that, or that the Lord Privy Seal would recommend the House to go in on very bad conditions. All that is being said is that he wants to go in and that his preference would be in the negotiation to find conditions suitable rather than unsuitable.
I rather thought that the advice to the House by my right hon. Friend the Leader of the Opposition and by my right hon. Friend the Member for Huyton (Mr. H. Wilson) was not quite the advice that they wanted to give. They both said that we must wait and see what the final picture is and that we must wait until the end of the negotiations and must not yet make up our minds. They said that it is too early to make up our minds, that the picture is not yet clear and that only when it is clear should we decide to support or oppose the Government in whatever recommendation they may ultimately make.
Just as I found the balance of the Lord Privy Seal's speech strongly in favour of going in, I found the balance of the two speeches from the Opposition Front Bench strongly against going in. It seemed to me, listening to the Leader of the Opposition yesterday stating with great clarity and force the risks which we should be running if we went in and the conditions which we must demand before we can agree to go in, that he was making it abundantly clear that neither he nor my right hon. Friend the Member for Huyton expected that the conditions which they wanted could be fulfilled. I hope to persuade my hon. Friends on this side that my view of those speeches is correct and that, in fact, the conditions which my right hon. Friends want, and rightly want, before they could agree to our going in are unobtainable, and they know they are.
A few minutes ago, my hon. Friend the Member for Craigton said that the balance of argument was a narrow one, that it was not really very important whether we went in or not. It seemed to me that he missed the point that the onus of proof must be on those who want to go in and that the risks of going in are so great that, unless an overwhelming case for going in is demonstrated, we ought not to run those risks. If the truth of the matter is that there is no such overwhelming case for going in, it seems to me that the moment has come when we ought to say so plainly.
Among all the speeches, the one which I myself found the most interesting was one with which I did not agree at all, the speech of my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), one of the best Parliamentary performances I have heard for very many years. It was brilliantly lucid yet at the same time a passionately eloquent defence of the proposition that we ought to go in and that we ought rather to play down than to play up the difficulties, the dangers, the risks and the disadvantages. Because, to my hon. Friend, the case for going in is so overwhelming, the House would be well advised to disregard entirely the other side of the matter. We should, of course, do what we can to minimise the dangers, soften the disadvantages and reduce or remove the risks, but, in the belief of my hon. Friend, we should go in in any case, having done our best to get the conditions we want, because the case for going in is so overwhelmingly great.
It seemed to me that my hon. Friend was making a very lucid and eloquent defence of a case which is not before the House at all. He was advocating or defending a romantic illusion. It is a romantic illusion which we all, I think, find very attractive. My own view of these matters might be substantially affected if I could think that the idea my hon. Friend was defending so passionately was a real idea in the context of these discussions. My hon. Friend has a picture of the countries of Europe, at least of Western Europe, united in one community, not too rigid but nevertheless belonging together, members of one community with a common background, a common history, a common political, social and cultural outlook, with common economic bonds which enable them easily to trade on a mutually understandable basis, able to live together as a separate group or family of nations, perhaps even ultimately speaking a common tongue.
This is not the European Economic Community. The E.E.C. is not a step towards a united Europe. It is not even a step towards a united Western Europe. It is merely an attempt to give political integration to N.A.T.O. so as to be able to play a more effective part in the cold war or, if the cold war should ease up in some way, with a relaxation of armed tension, and there should then blow up a kind of economic war, cold or hot, so as to be able to play a part in that. In any case, the idea is that the effectiveness of N.A.T.O. would not really be all that it ought to be unless it could be given a political and economic integration to reinforce and fortify the military and political functions which it now performs.
The game was rather given away by a very interesting speech from the hon. Member for Sheffield, Heeley (Sir P. Roberts). Curiously enough, his was a speech on the whole, I think, against the Common Market, though one could not see why on its argument. The hon. Gentleman said that what we should have in the next ten years would be a violent economic war between the N.A.T.O. nations and the Communist bloc, a conflict between what he was pleased to call capitalist democracy and the Communist States. This also is a rather over-simplified view. The hon. Gentleman has forgotten that not merely in this country but in many of the nations which form the Six and which are negotiating wider associations, there are a great many people who do not see the world in that stark conflict between capitalist democracy and authoritarian or totalitarian Communism. When another hon. Member opposite said that he favoured our entry into the Common Market because, as he put it, it was good for this country, good for Europe and good for the world, he overlooked the fact that a stark division and conflict of that kind could end only in universal catastrophe.
Whatever our divisions in other ways, all of us on this side think that we have a better answer than either capitalist democracy or authoritarian Communism. We think that, if the effort is made, something better than either can be achieved. One can accept the principle of the economic ownership and control of our country's resources and the planning and direction of them in the interests of the community without sacrificing one jot or title of the political and civil liberties without which economic prosperity would hardly be worth having. That is what all of us, whatever our divisions on other matters, mean by social democracy. We mean the capacity to plan and to own, in so far as it is necessary to own in order to plan, our basic resources and services and all those things of which the successful exploitation and planning are necessary for the prosperity and happiness of our community.
This idea of planning our economy is no longer, at least as a matter of lip-service, confined to us. The Government talk now about the necessity of planning. We may differ fundamentally about whether the controls one needs for planning must be physical or whether one can do it equally well by indirect fiscal controls. There is no doubt that we on this side think that more than fiscal controls are needed, but the idea of planning our resources as a community in the interests of the community has always been the policy of my hon. and right hon. Friends, and the Government now pretend that it is their policy too.
How in the world, if we go into the Common Market on the basis of the Treaty of Rome, should we ever be able to do that?
I thought that it had been demonstrated, particularly by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), that one was bound by the Treaty of Rome not to do so. Perhaps the hon. Gentleman may not be convinced. He should read the Treaty of Rome again or read the speeches which have been made about it. I thought that it was perfectly clear that, whatever one did about the ownership of resources— nationalise them or not nationalise them —still one was not able to use any powers in the planning of them in conflict with the decisions of the Community. I have not heard any argument against that, and I can see none. It certainly ran through the speeches of my two right hon. Friends.
I see my right hon. Friend showing some signs of dissent. If he will read the speech of my right hon. Friend the Member for Huyton, he will see, I think, that that is quite clearly accepted. If it were not accepted, at least it was accepted that there was a great danger of it. It seems clear that when we are talking about sovereignty in terms of the Treaty of Rome, we must accept the position that if we go into a European Economic Community which is regularising all of its affairs by institutions which it has set up, we cannot at the same time act in conflict with it in planning our own community.
If we cannot plan our own economic resources, or if there is a serious risk that we cannot do so, what is the case for going into the Common Market, if it is established, as most people think it is, that there is no overwhelming advantage to be gained in compensation for what we give up or risk giving up? Even if I have overstated it, even if we could in some way preserve our independence and go into a community of nations at one and the same time—which must be a difficult operation, and I do not imagine that the Lord Privy Seal is negotiating in order to produce a compromise of that kind—there must be at least a very serious risk if we enter the Common Market that we are resigning all possibility of doing the things which we as a party came into existence to do and which we all still believe in doing. Of course, the Lord Privy Seal does not believe in that kind of planning and control or that kind of public ownership, and he is certainly not negotiating to enable us to do that.
I am following the hon. Member's argument with great interest. If what he says is valid in respect of the British Labour Party, is it not equally valid in respect of the Socialist parties in the countries of the Six? How does he explain their willingness to go into the Market if, as he says, it means the surrender of the power to achieve Socialist ends?
The hon. Member is not looking at the matter fairly or completely. There is a great difference between the Socialist parties in Germany, Italy and France and the Socialist Party in this country. Italy, Germany and France are already in the Common Market, and it is just because they are afraid, their countries being already in, of being submerged and overwhelmed and made impotent to carry out their Socialist policies, that they are anxious that we should go in to strengthen them in their fight against their own reactionaries. [Laughter.] I do not know what hon. Members find so amusing. I believe that if the German Social Democratic Party—and the same is true of Italy and France—saw any hope of taking their country out of the Six, they would be nothing like as anxious that we should go in as they are now. Their desire to get us in is conditioned by their feeling of impotence that their countries, being already in, are governed by forces which would not enable them to carry out what they or we should call Socialist policy.
To which party does M. Paul-Henri Spaak belong?
I confess that I do not know. I know the party to which he used to belong, and maybe he still belongs to it, but the argument about the Belgian Socialist Party is no different from that about the French, German or Italian Socialist parties, because Belgium too, is one of the Six. I am dealing with the point made by the hon. Member for Uxbridge (Mr. Curran). The fact that the Socialist parties of those countries, which are already in, want us to be in, is not an argument for our going in if we are convinced that going in would not improve their position and would sacrifice our own. It seems to me that if there is even a strong risk of that, it would be a decisive argument against going in, unless an overwhelming case could be made for going in by way of compensation for what we should lose or risk losing. As it is part of the argument that there is no such overwhelming advantage, I say that that argument is not valid.
What else do we lose? There has been much talk about Commonwealth. I do not dissent from what my hon. Friend the Member for Stechford said— that its importance can be exaggerated. The importance of going into the Common Market can be exaggerated, too. But he thought that the importance of going in, even though it could be exaggerated, was such that his passionate desire to go in and his emotional involvement with the idea of a united Europe justified him in ignoring the risks. There are others who have a rather more emotional feeling about the Commonwealth than he has, or who have it with regard to the Commonwealth and not so much with regard to Europe.
This is not merely an empty thing. My right hon. Friend the Leader of the Opposition talked about the possibility that at the end of the day we may negotiate ourselves into a position in which we are merely a small island off the coast of Europe, with no other importance in the world than that. I do not think that many of us would like to see Britain in that position. I am sure that the Leader of the Opposition would not. In the days When the Commonwealth was merely an empire, when there were risings, revolts, protests, tyrannies and oppressions, and when there were exploitations, and when some people were in it only for what the mother country could get out of them, many of us on this side of the House had no feeling for it at all. But is there not something to be said in the changed conditions for remaining the heart of a free association of free peoples, not rigid, not bound, not so closely associated that the individual members could not pursue policies of their own, domestically or even internationally, but nevertheless regarding themselves as bound by a common past and a common tradition, something outside Europe and outside the conflict of the two organised blocs?
There has been at times a tendency to sneer at hon. Members on this side of the House who talk in this fashion. But it is perhaps worth while to remind hon. and right hon. Members opposite that we on this side were the friends and allies of Gandhi, Nehru, Nkrumah and others when hon. Members opposite regarded them as traitors and were imprisoning and sometimes executing them. We have a different Commonwealth now.
Who locked up Nkrumah?
If the right hon. Member is trying to persuade me that the records of all parties have specks on them, he is beating at an open door, as I think he knows. I have pointed out one or two of the defects myself from time to time. By and large, the proposition which I am advancing to him, as I am sure he will agree, is true. The record of Colonial and Commonwealth Secretaries on this side of the House and a whole half century of political propaganda all round the Commonwealth tends to be in the direction that I have described, and our opponents were those who now attempt to sneer at us for defending passionately what we achieved.
I remember an election at which I was talking about the social services and my Tory opponent told me that the Tory Party had always been fighting for the social services. It occurred to me to ask whom it was fighting. It was certainly not us. When this party was fighting for the liberation of the Commonwealth, I know whom we had to fight. We certainly did not have to fight the Dominions or the Colonies. One of the significant facts is this Commonwealth, this natural grouping of nations which has come together not necessarily for economic advantages, not necessarily for advantages of any kind, but out of common loyalty, common associations, the desire to preserve a common outlook and a desire to exercise a common influence in a distracted world. No one would suggest that if we went into the European Economic Community on the unaltered basis of the Treaty of Rome, the Commonwealth could ever be the same again. It could never again fulfil that function. We could never again be the heart of it, because our loyalties would be at least divided and would be much more impelled towards our immediate associates than to those distant places scattered all over the world.
So we have the danger that we will not be able to control our own affairs no matter how large the democratic majority which we may secure for controlling them in the way that we desire. We may have our democratic elections and my right hon. and hon. Friends may be returned with an enormous majority, but inside the European Economic Community, even if they wanted to, they would be unable to carry out the peaceful social revolution to which this party is committed, and nobody saw that point more clearly or explained it to the House more eloquently than the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) in a previous debate. Then there is the danger of splitting up, so as to make insignificant and ineffective in world affairs, the Commonwealth which we have spent 300 or 400 years building up.
At the end of it, we should have accepted a position in which we were not even free to make an independent intervention in international affairs. We should be tied up in a politically integrated Europe, and all those things would have been given up in order to obtain an economic advantage which is the subject of long haggling, which is doubtful in the end and where the balance of argument is summed up by almost every speaker as being: "Not the end of the world if you do not go in; the claims for going in are not so overwhelming as all that; it does not matter a great deal whether you are in or out, for if you go in you survive and if you stay out you also survive". What is the use of our sacrificing our real function and importance in the world in order to achieve something so doubtful and so debatable and so ambiguous?
The balance of argument is clear. I do not believe that anyone thinks that in the end we will decide or ought to decide whether to go in or stay out according to what is the end result of these difficult and protracted negotiations. People who go in will go in whatever they are able or not able to achieve. People who do not want to go in would not be able to go in however successful the Government were in the negotiations. It is a little uncandid of my right hon. and hon. Friends to go on pretending that on this side of the House there is any real doubt about where we ought to stand in principle, that it really depends on waiting to see the final outcome of the negotiations. Those negotiations do not closely touch any of the conditions which my hon. Friends want to lay down for going in.
The real reason is to make some concession to my hon. Friend the Member for Stechford and his hon. Friends who passionately want to go in and who might be tempted to vote against if the party decided to vote to stay out. The argument is that if we preserve some kind of artificial uniformity by saying, "Let us sit on the fence; let us hover; let us wait; let us hesitate; let us put off the decision", in the end perhaps we will all come round to it.
I do not know why my right hon. Friends should be so afraid of members of the party coming to different opinions on important matters. Why should they not? What harm does it do to the unity of a party if four or five members on the Left, or four or five members on the Right, or four or five members in the centre find themselves from time to time out of harmony with majority opinion? The party benefits by that, benefits far more than it loses in the public estimation by this constant presentation of seeming hesitation, seeming doubt, a wavering, a hovering, an inability to make up its mind and a refusal to apply any kind of leadership one way or the other to the people whose support we are seeking.
If hon. Members opposite are so anxious and think that the move is so wrong, and they have spoken very eloquently, very intensely and sometimes very movingly against going into the European Economic Community, if they do not want this thing to happen, they can kill it tonight. The other day the Leader of the House reminded us that we can vote on Adjournments, and that when we do it may be a very significant vote. If, on a fateful day in June, 1940, 35 members of the Conservative Party had stayed in their seats, quiet, and had not gone with the Labour Members into the Division Lobby against Neville Chamberlain's Government, the whole history of the world might have been different. It might be that none of us would be here debating the European Common Market now.
If they are not convinced that they are right, let them stop their campaign. It is doing them a lot of harm in the country. These divisions in parties are harmful. The two Front Benches take the same view about it, and the fact that I do not share that view makes no difference. But if those hon. Members opposite really think that they are right, I ask them to come out bluntly, plainly, frankly, honestly and courageously into the Division Lobby with us tonight. A serious revolt of 30, 40, or 50 Tory Members would bring this nonsense to an end.
Unfortunately, the time left to me is so short that I cannot make the major part of my speech, which I have been sitting here waiting to make for two whole days. That being the case, I shall keep to the one part of my speech which has been touched on by only one other Member during the whole of the two days of debate, namely, the effect of our entry into the Common Market upon our horticultural industry.
It is clear that the Government have given unequivocal guarantees to the horticultural industry that they would maintain its position by tariffs. If we go into the Common Market and those tariffs are whittled away it means the end of our horticultural industry. Last night, the Minister of Agriculture referred shortly to the industry, and said that
a separate working party in Brussels is examining our problems, which are considerable. The decision adopted by the Com-
munity for fruit and vegetables has three main features …."—[OFFICIAL REPORT, 6th June, 1962; Vol. 661, c. 605.]
He went on to say that although the arrangements being made in Europe might be effective for them he did not think that they would be effective for our horticulturists.
The hon. Member for East Ham, South (Mr. Oram) said that he thought that such arrangements as our going into the Common Market might—I forget his exact words—ginger up our own horticulturists and make them efficient. What he does not remember is that they have to compete with factors like climate. In the area around Nice it is possible to grow carnations in the open air at the end of October; horticulturists there also have through travel direct from the south of France into the London market; they have many advantages, such as better rolling stock. These factors mean that our horticulturists already have to face unfair competition.
We must remember that, as horticulturists, we have a very good bargaining position with the members of the Common Market. The Trade and Navigation Returns of imports from the Common Market into this country show that the Netherlands exported to us £15½ million of horticultural produce in 1960 and £18¾ million in 1961; Italy sent us nearly £24 million in 1960 and £22½ million in 1961; whereas our total horticultural exports to the world amounted to £8 million in 1960 and £9 million in 1961 and, to the Common Market countries, £1½ million in 1960 and £2½ million in 1961. Where does this lead us? It leads us to the plain and simple fact that unless our horticulturists are properly protected they will go out of business.
My right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones) yesterday talked about our having to look elsewhere for defence. I believe that we have a great part to play in Commonwealth defence. Time does not allow me to develop that point. But those who served in the Navy in the last war will never forget that a country like ours, surrounded as it is by the sea, if it has to face enemies coming at it over the sea, cannot survive unless it has a good and thriving agriculture and horticulture. It will not be any use turning to the people of Europe then and saying, "Now we want more from you," because we will not get it.
We must be clear about all these points before we go into the Common Market. Quite forgetting the Commonwealth at the moment and forgetting the question of our loss of sovereignty, I do not think it old-fashioned to believe that the traditional things on which this country has been built are things that we should keep. I do not think it old-fashioned to think about those alongside whom we fought in the war, nor do I think that this is inward-looking.
I would never countenance going into the Common Market unless we had adequate safeguards for the people I have spoken about—the farmers and the horticulturists whom we have backed all along by this system of tariffs. I do not want to see them thrown away because it happens to be expedient for some businessmen who want to go into the Common Market. Look at the motor car industry—it is there already. I speak for the people in this country, our agriculturists and horticulturists.
While at the moment we do not know enough about it to be able to say whether we should go in or should not —and I agree with the Leader of the Opposition, who made a very good speech yesterday—I for one will never agree to going in until I am absolutely sure that these people, plus our comrades in the Commonwealth, are adequately safeguarded and that the horticulturists of this country will not be swept out as a result of a decision made by our Government.
Certainly this has been one of the most impressive debates to which I have listened in this House. I have heard a great deal of it and have read everything I have not heard. The standard has shown that despite what is sometimes said we can have debates without necessarily basing them on a Motion or a Division.
The debate has been notable for some striking speeches, particularly the maiden speech of my hon. Friend the Member for Stockton-on-Tees (Mr. W. T. Rodgers). Speaking as chairman of a dif- ferent body, I seem to have had quite a number of chicks coming in during the last few months. Another is to come in very soon, and two more after him. Of all those we have had, I was particularly pleased to hear my hon. Friend make that powerful speech today. The debate has been remarkable also, unlike the one last July, for some much clearer and firmer speaking by the Ministers concerned. Whether or not that is because the Prime Minister has not been down to see us these past two days, I do not know, but there has been a notable absence of what my right hon. Friend the Leader of the Opposition called "smooth talk". There have been very clear explanations by the Ministers, for which we are grateful.
It also must have finished another fashionable canard. It has been fashionable to talk about the Labour Party sitting on the fence. If we ever had a fence it has been shaking during these two days with everyone climbing up alongside us on it. So far as I see, we are all there now. The Secretary of State for Commonwealth Relations told us today very firmly that he would not decide to go in until he could see what terms could be negotiated. The Leader of the Liberal Party made a very notable climb up on to the fence at one time. When one remembers what has been appearing in election addresses, especially the one in connection with Stockton-on-Tees, and the refusal of the Liberal Party Conference to pass an amendment saying that we ought not to go in until we find what the terms are, I regard making a little room on the fence for the right hon. Member as one of my more pleasurable jobs during this debate.
In so far as the right hon. Member has referred to our conference, I should say that we made it absolutely clear to conference that of course we accept that entry into the Common Market must be negotiated.
I thank the right hon. Member for making everything clear. What the Liberals in fact did was to defeat an amendment designed to ensure that our Commonwealth partners and our agricultural interests would be safeguarded before full entry into the Common Market. That was defeated, but on the other hand I welcome what the right hon. Member said yesterday. After all, we are now all on the fence together and life can be rather happy. The hon. Member for St. Ives (Mr. G. R. Howard) said that he would not agree to go in until he knew what the terms were. That must go for everyone, so it is good.
One unfortunate feature of this debate, which was true of the last, has been due to the way in which the Government handled the whole business after last July. We were rushed into this in such a way that there was much misunderstanding—I use the kindest word I can think of—about what the intentions were. There seemed to be so many different speeches in London compared with those in Paris and Brussels. The Prime Minister was saying that it was totally economic and the Lord Privy Seal was saying that on the other hand it was a political thing which we fully accepted. There was so much misunderstanding that inevitably this debate, like the previous one, has tended to concentrate very much on the clarification of what my right hon. Friend the Leader of the Opposition called "sticking points" on the fears and anxieties and conditions and terms.
This in part, I think, is the answer to something which my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was saying a short time ago. It was necessary that this should be done because there seemed to be so much doubt and misunderstanding about what the Government were trying to do and what their intentions were. I emphasise that it is very important to get these conditions clear, to find what the sticking points are and to clear up the anxieties, but doing that leaves a great deal less room, even in very long speeches, for real attention to be given to the vision behind the whole thing and the opportunity it would afford us. This to some extent distorts the pattern of the debate. It distorts the pattern of speeches in a way which is unintended by those concerned.
In what I think everyone will agree was a magnificent opening speech yesterday, my right hon. Friend set out very clearly both the risks if we do not go in and the opportunities if we do go in. When I hear so much talk about the risks of going in, I still feel—as I have always felt during all this contro- versy—that I wish people would talk a little more about the risks of staying out, for they also are considerable. My right hon. Friend set this out. I venture only to repeat the first sentence of his final paragraph, which he also used on television. I repeat it because I do not want the end of the debate to be as distorted as some of the earlier parts. My right hon. Friend said that the best solution would be to go in on good terms. This clearly ought to be understood as our approach to this issue.
The reasons for this are pretty clear, and in dealing with this my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) made one of the greatest speeches that I have ever heard, and I add my tribute to those which have been paid to him by many hon. Members. We need what we cannot have in this small island. We need a large domestic market to back us if we are to be an exporting nation. This is an important reason for considering going in.
Everybody refers to it as the Continent of Europe. We are part of Europe. In fact we are talking about the mainland over there. The fact that the Continent exists and cannot be dissolved and that what it does will have a tremendous impact on us are other powerful reasons for considering whether we can become more closely associated with it than we are at the moment. The influence that we could exercise inside the Community, the influence that we could bring to bear for things about which we care, and the difference that we could make to the way in which it is being run, are all important reasons for considering going in.
When my hon. Friend the Member for Nelson and Colne was talking slightingly about why the Socialist parties of the Six wanted us to go in, I think that he left out of account that one powerful reason for wanting us in is to reinforce Socialist influence inside the Community, which we certainly could do.
I said so plainly.
That was not the way in which I got it, but if we, too, are in agreement, that is another one on the fence.
A fourth reason has been suggested for our going in, and I think this is important It is the very much greater strength that we would derive if it were possible through being in the Community, to fulfil our function in the Commonwealth and among the under-developed territories of the world, a function which we ought to be fulfilling much better than we are at the moment.
There are two negative reasons why we ought to consider very carefully whether we can do it. One is the possibility of the wrong development taking place in the Community if we are not there, the possibility of it becoming, as my right hon. Friend said, perhaps inward-looking, perhaps nationalistic, possibly neutralist, and so on. We have to remember, too, the difficulties we will encounter in earning our living if we are cut off from the Community and become what my right hon. Friend referred to as an off-shore island of Europe with no hinterland or other great mass behind us.
Concentrating on the terms on which we might be able to go in—which is what hon. Members have been during this debate—does not cloak a lack of desire or a lack of understanding. Nor does it mean—and here I align myself with those who answered or sought to answer the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith)—that we accept that the Commonwealth could be an alternative idea to the European Community. I thought that that was put up last July. I thought that it was shot down last July. I think that it has now been shot down completely. The Commonwealth is not that kind of party. It is not that kind of association. It would not be in their interests to do what has been suggested, and I am sure that they would shoot it down.
Some people say that to keep on concentrating on the difficulties and issues involved may damage our chances of getting in. I do not believe it. The clearer we are, and the firmer we are, about what we require as the terms for getting in, the better it will be for everybody both now and in the future, so long as we are not merely raising obstacles.
One of the issues that keeps on being raised—I think it is an irritant—is this constant reference to sovereignty. We have never joined with anybody or gone into any international group larger than one nation which did not involve some surrender of sovereignty. If one goes in with other people one finds oneself carrying out decisions just because they are the decisions of a body, and this applies to inter-governmental bodies, like N.A.T.O. or O.E.E.C, just as much as to a different kind of body like this. We very much exaggerate this sovereignty point and unnecessarily raise an irritant, so that it now looks as if we are trying to get at one of the foundation points when, in fact, we are not, and when we might quite easily accept what degree of loss of sovereignty is involved.
I should like to reinforce what somebody else—I do not remember who— said earlier. The time-table that has been erected becomes terribly important. If we are to negotiate and raise issues, we must get away from this idea of a deadline. This has been erected, and there is now an idea that something has to be over by July or that something else has to happen in September. This is bound to give an air of breathless urgency to everything. It is bound to prevent real negotiations, while taking away a good deal of our bargaining strength.
This means that the Prime Minister— if he ever had such an unworthy idea, and the recent by-elections will have helped him to get rid of it, if he ever had it—must get rid of any idea he ever had of using this issue as an election gimmick. He must be prepared to let the negotiations go on and solve his electoral problem in some other way. There is nothing sacrosanct about July; there is nothing sacrosanct about September. There is no reason at all why the Commonwealth Prime Ministers should not meet in September and discuss what has happened up to then and meet again later if we are not in a position at that stage to put an outline before them. This is tremendously important, and I should like to hear the Lord Privy Seal say that we are not tying ourselves to a deadline. We must have time to negotiate fully and properly and see what we are taking on. Our future, that of the Commonwealth and that of Europe depends on it, and our own good faith may be questioned.
We cannot on this occasion have blank pieces of paper at the end of the day for the details to be filled in afterwards. We cannot have formulas that can mean anything or nothing. When I listened last night to the Minister of Agriculture—and I will return to him in a moment—I realised just how much many tremendously important points are still completely in the air. They cannot possibly be settled between now and July, and they are issues which we ought to know about before we sign the piece of paper. I hope that the Lord Privy Seal will deal with the questions which my right hon. Friend asked him about the timetables, the decisions and the time at which they are put before the Prime Ministers' Conference and Parliament.
May I now turn to what seem to me, at the end of this two-day debate, to be the major issues still outstanding, and on which we should like to hear more from the Lord Privy Seal. First, the Commonwealth. There are still issues about which the Commonwealth Secretary spoke, on which he did not satisfy us. Again, it may be that we cannot at this stage be satisfied, but we ought to know if these issues are still in the air. On the question of the temperate foodstuffs and this business of what we really mean by equivalent access for the producers in New Zealand and the other countries, I found the Minister totally unconvincing, in the sense that I do not think he was able to tell us what he was negotiating for, and we look for something with a little more reality than the term "equivalent access". We should like to hear a little more about that. We would still like to hear much more about the form of association it will be for our African and Caribbean ex-Colonial Territories.
Are we, in fact, trying to get associate membership for them? I understood the Secretary of State to say that we would not accept second-class status for them, but I was not clear whether that means that we are going for associate status or something else. I understand that some of them simply do not want to have associate status. We could not leave them unprotected, and if we negotiated something for them which they rejected we would still have obligations to them. It is important that we should be told what the Government have in mind on this issue. Equally, questions involving manufactured goods from the Asian territories and our efforts to try to cover them have not been clearly answered.
Another outstanding major issue is our E.F.TA. commitment. We must mention time and again, since an issue of good faith is involved, the absolutely surprising and staggeringly binding nature of the commitment we entered into. It is a much more binding one than we gave to the Commonwealth. There is no point now in arguing whether it should or should not have been so. We have committed ourselves to keep E.F.T.A. going and to make sure that everyone is taken care of before any of us joins a new body. My right hon. Friend the Member for Huyton (Mr. H. Wilson) dealt clearly with this matter, and I hope that the Lord Privy Seal will be equally clear in his reply.
Does the Lord Privy Seal realise the tremendous importance of all this to Sweden? As my right hon. Friend the Member for Huyton made plain, for us to join, Norway and Denmark joining becomes of immense importance, for voting and other reasons. It is quite clear—as my right hon. Friend said, having just returned from the area—that there is very little chance of Norway joining if Sweden is not in some way inside, because of the tariff barrier question. Thus if Norway did not join we would be without an important partner.
There is also the important question of home agriculture. When the Minister of Agriculture dealt with this matter he left everything completely in the air. It is always rather funny when someone makes a good joke, especially when talking about things like targets, thresholds sluice-gates and so on. I cannot help thinking what would happen if one tried to explain to a foreigner the complexities of our own price system for agriculture. He would have quite a laugh. We do not have much on them in this regard.
It seems that since the Conservatives changed the 1947 Act, as they did four or five years ago, they have taken away a great deal of the mechanism we were using. Since then money has been pouring though the system in ever growing amounts and changes in the arrangements were, I suppose, bound to come anyway. The amount of money involved was getting embarrassingly large and the Government could not have faced it much longer. We are not in agriculture facing something that is ideal, good and to be held, but something that would have to be changed anyway. We can, therefore, more clearly and without prejudice, consider the ways in which we would change it if we joined this body.
I am not clear about just what the Minister of Agriculture meant when he used the gallant phrase about the proposals of the Community forming a "comprehensive and sophisticated policy". Incidentally, the Minister is a great one for using the word "must". What exactly did he mean by that? What kind of agricultural policy does he expect to see France, Germany and the others adopt so that he could call it "comprehensive and sophisticated"? We ought to be told if he knows what he meant by it. We all use phrases sometimes the meaning of which we are not sure about. I would not quarrel if he said that he did not know what he meant. I have been that way myself. If he thinks he knew what he meant by it, we should be told so that we can see what it would mean for us.
Secondly, what did he mean by his reference to annual reviews in the Community, with prices based on them for the year ahead? I had, as no doubt other hon. Members had, an immediate approach from the National Farmers' Union, which wants to know what it means. I find it difficult to envisage how he saw that being carried out on a Community basis. Did he mean by these annual reviews what we mean by them, with statutory consultations with the representatives of the producers, with the economic conditions of the industry and all the rest of the things provided in the Act being taken into account, and then the prices fixed? Did he mean that there would be some national reservation so that we could protect our own people if conditions here were differ- ent from those obtaining anywhere else? What did he mean by it? I think that he was using loose language which will look peculiar to Dr. Mansholt and his friends and will considerably confuse our agriculturists.
We have heard a lot about target prices. How much will these be a substitute for our guaranteed price system? As I understand it, the target price is something fixed at a wholesale level in a particular deficit area, but it is not something one undertakes to pay. Nor is it more than a notional figure. The only thing one undertakes to pay—even this is not mandatory, I understand—is a lower price which can be 5 per cent., 10 per cent. or even more lower, which is the point at which the Commission could intervene and buy the surplus stock. That is the only point at which anything becomes payable. That could be a good deal less than the target price. I do not see how one can present that to the farmers in my part of the country or anywhere else in the country as a real alternative to our present guaranteed price system. It may be the best we can do, but we must not pretend that it is a guarantee under another name. It does not seem to me to be that.
Even less do I see the arrangements for the commodities for which there is no target price being a successful replacement. These are very important commodities. This is an important section of the community. Their only protection is at the common frontier. Thus their only protection is against commodities coming in from outside. I just cannot see what one holds out to them as a successful replacement inside the Community for what they are losing inside the country.
Tonight we heard something about horticulture. We shall have to be told what the Government envisage here. Has the Lea Valley to go? Is there a problem there? If it has to go, is there replacement money available? What is the plan? It is no good dodging this. The Lea Valley is very vulnerable. For all I know, other parts of the horticultural industry may also be vulnerable. There will have to be a much more specific facing up to this so that we can see what is to be done and perhaps work it out and put it across. We cannot do it in the sort of easy way in which the Minister did it last night.
There were other agricultural issues left entirely open. As to the timetable, there have been reports that the Lord Privy Seal asked in the negotiations for twelve to fourteen years as the transitional period for us, instead of the six or seven years for the present members of the Community. Is this so? If the right hon. Gentleman has told them, I do not see what he can lose by telling us. At least the farmers in this country would know what he is doing.
The same is true of the levy. My right hon. Friend raised this question and the possibility of our paying the lion's share of this to subsidise agriculture elsewhere. That has now been changed by the budgetary system under which the countries are paying, for a time at any rate, out of their exchequers. I take it that we would pay something like Germany has been asked to pay. We heard nothing about this, except a statement that it all had to be taken together. We should like to know what we are taking together. We should have another statement about it.
The right hon. Gentleman made an extraordinary statement when he was asked about production grants. The House knows that the subsidies we pay are divided—some are grants to aid production, others are price subsidies. We all understand that the price subsidies are not continuable under this system. We have long been told that production grants are. I should have thought that the Minister would know the answer to this, because it is a vital point. When he was asked today whether they are continuable, all he could say to my right hon. Friend was that this is one of the things which the Commission in the fullness of time will have to decide. It makes a lot of difference whether we are putting the total of the subsidies on to food prices or whether we are putting only a half or two-fifths on to food prices. We should be told whether these production grants are protectable or, if they are not protectable, whether we are to try to get them made so as part of the negotiations.
This is a vital area of home agriculture. However the case for going in may be presented, this cannot be brushed aside. Something as vital to us as British agriculture and a body of people as magnificent as our food producers, workers and farmers alike, should have very much better protection and stronger arguments advanced on their behalf than the Minister seemed to be advancing.
There are other things for the Lord Privy Seal to answer. My right hon. Friend the Member for Huyton raised many issues on economic planning to which I hope we shall have some answers, reassuring or otherwise. I hope that they will be reassuring. I have a feeling that some of them could be. At any rate, let us have the answers.
At the end of the day to many who report our debates, sometimes without the attention they ought to have, it may look as though the climate of opinion in the House has hardened against going in. I believe that that would be an unwarranted deduction. What has happened is that there is now more understanding of what is involved. There has been a concentration and a narrowing of the vital areas, on which we have to have answers which we have not now got. To put it shortly, the chips are now going down and we begin to know where we are. Speaking for myself and for a large body of my hon. Friends, I hope that we pull it off, but we must see how we propose to meet these conditions. We cannot go in just as a matter of desire. We shall have to see exactly what are the possibilities before we go any further.
There has been a tendency in the House to talk as though it was we who were desperately anxious to go in and that everyone else did not want us to go in. I do not believe that this is true. There are members of the Six who very much want to see us in. I will not in public go into the reasons, but they are pretty apparent. We have cards to play in this negotiation. We must play them with skill but, more important, with honesty and with consistency. We have some bargaining strength; let us use it.
We are often asked what happens to us if we do not go in. I have asked that question myself. There is also the question of what happens to the Market if we do not go in. I have had talks recently with members of the Community who are very concerned about what would happen if these negotiations broke down, so strongly do they feel about the matters involved. But we must face the consequences. The consequences for this country, quite apart from the Market, are that we must be planners and not just pay lip-service to it. We must plan and the country and hon. Members opposite will have to accept a large amount of what they call Socialism, which they say they dislike so much.
If this country is to make its way inside the Market, it will need to be an altogether different economic society from the one which it is today. Certainly if we try to make our way outside it that will be at least as true and probably more true. I hope that at the end of this memorable debate we shall hear from the Lord Privy Seal answers to some of these questions which will make it easier for us to know where we are going.
Perhaps I may say to the right hon. Member for Belper (Mr. G. Brown), who has now resumed his fence, so to speak, how much I agree with what he has said about the nature of this debate. It has been a very notable one. We have had some remarkable contributions to it and any apprehensions which I may, perhaps, naturally have had before it began about a debate of this kind, halfway through the negotiations, have certainly been rapidly dispelled.
I am particularly grateful to right hon. and hon. Members for not pressing either myself or my Government colleagues who have spoken in the debate on particular points of detail about which we are still negotiating. The right hon. Member for Belper has raised a considerable number of further points most of which are under detailed discussion in the negotiations at the moment. I know that he, too, will understand on those occasions when I am not able to give him information about the proposals which we have so far put to the Six.
I have already said that a considerable number of notable contributions have been made to the debate. It has been marked by the admirable maiden speech of the hon. Member for Stockton-on-Tees (Mr. W. T. Rodgers). The keynote of it, I think, was stated very clearly by him. He said, be adventurous, be bold. I have no doubt that his leader will forgive such an advanced point of view from an obviously good recruit. The hon. Gentleman said, look to the future and not to the past; only be strong and of good courage. I think that the House realises that that, in effect, is what so many young people in this country are saying today to the House about this great issue. The hon. Gentleman expressed this admirably, and I should like to offer him my sincere congratulations on his speech.
The hon. Gentleman also put the matter very simply. He said, "I find that old friends do not mind my making new friends." I profoundly agree with him, but I should like to add that I think that he will make many friends here. He is warmly welcomed, and we shall look forward to hearing him many times in the future, particularly those who find themselves in agreement with him!
I will endeavour to answer as many of the questions which have been asked in the debate as possible, which is what the right hon. Member for Belper asked me to do. First come the questions about timing and the general nature of the negotiations. Perhaps I am in agreement with the right hon. Member for Belper when I say that I do not agree with the right hon. Member for Huyton (Mr. H. Wilson) when he says that we are negotiating from weakness. Nor do I think that it improves our negotiating position for the right hon. Gentleman repeatedly to say so in the House of Commons and in the country.
Also, I do not agree with my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) when he said that we have started these negotiations by making three concessions—by accepting the Treaty of Rome—I pointed out that we added the provision that we wished to go through this carefully with the Community and with the Commission, which we have been doing; by accepting the common tariff; and by accepting the changes concerning sovereignty which may be necessitated by it.
We did not enter these negotiations in an attempt to change the European Economic Community into another European free trade association. Therefore, it is not a concession, or three concessions, to say that, in applying to see whether we can make suitable arrangements, we are prepared to accept both the Treaty as the basis and the common tariff, which is its characteristic.
On the question of timing, what we have agreed, all seven Governments together, is to endeavour to reach an outline by the end of July. I am, of course, wholeheartedly in accord with my right hon. and learned Friend. I am not prepared to negotiate against a deadline in the meaning in which he used it. On that I have always been quite clear.
The right hon. Gentleman the Leader of the Opposition asked whether we could say definitely that the Government would not make up their mind until after the Commonwealth Prime Ministers' Conference. My right hon. Friend the Secretary of State for Commonwealth Relations assured him of that this afternoon. Of course, the views of the Commonwealth Prime Ministers will be fully taken into account in the Government's final decision.
The right hon. Gentleman asked also that we should provide full information, including the views of the Commonwealth and the E.F.T.A., with time for Parliament to study it. Of course, we wish to provide the fullest information about the negotiation and about any other matters on which the right hon. Gentleman may want information. There is no doubt that the Commonwealth countries and the E.F.T.A. countries will themselves wish to offer their views, and we shall, of course, consider making everything available that we can.
The Leader of the Opposition asked that there should be no Government commitment while the House is not sitting. Here, of course, much depends on the timetable. There can be no Government commitment until Parliament has thoroughly considered the matter and given its verdict about it, but, of course, the Government must reserve their right in any future situation to decide what action they take other than the commitment of which I have spoken in which, of course, Parliament must be involved.
I come now to the position of E.F.T.A. All three right hon. Gentlemen who spoke from the opposite benches somehow questioned our attitude towards E.F.T.A. I do not understand this a bit. We have not dismissed it lightly, as was suggested yesterday. Our obligations are as the Leader of the Opposition gave them. I did not read them out myself because of lack of time. We fully accept them. Briefly, they are that our negotiation gave an opportunity for all the E.F.T.A. countries to go into negotiations. They have all now approached the Community. We are co-ordinating our actions and we remain united throughout the negotiations.
We have been in the closest possible touch with every E.F.T.A. country throughout. We have maintained our Ministerial meetings. As an example of acting together, we have accelerated the reductions in the internal tariffs, so keeping pace with the European Economic Community. During all the negotiations in Brussels, the E.F.T.A. representatives are seen by one particular member of our delegation, and I myself see all the E.F.T.A. ambassadors at the end of every Ministerial meeting. There is no misunderstanding between us, and I believe there is complete confidence between all the E.F.T.A. countries.
I differ from the right hon. Gentleman the Leader of the Opposition on one point. He said that one year would be necessary under the Convention of Stockholm before any action could be taken. This refers to the withdrawal of a member, which is not contemplated under the particular arrangements at issue, and, if all the E.F.T.A. countries agree that they wish to bring them into effect at a particular time with the Community, they are at liberty to do so.
I wanted an assurance from the right hon. Gentleman that the Government will not make their final decision until the position as regards the E.F.T.A. has been completely cleared up.
Again, it depends very much on the timetable of the negotiations. The Government will, no doubt, be able to form their views on the arrangements so far as they affect the United Kingdom and the Commonwealth, but, obviously, they have also to form a view about the position of the E.F.T.A. countries. The right hon. Gentleman is quite correct. That is part of the obligation.
Our views about the position of the neutrals are fully known throughout Europe and the United States. We have never hesitated to make known our view that these countries are part of the wider Europe which we are trying to create and that they should have tie opportunity of making suitable arrangements with the new enlarged Community.
I come now to our position as regards Euratom and the Coal and Steel Community. We have, of course, made an application to enter into negotiations with those. I hope to be in a position to make a statement to the Community about Euratom quite early in July. As my first statement in Paris was published by courtesy of Reuters and my second statement in London was published by courtesy of The Times, perhaps it would be advisable to publish this statement by courtesy of myself and the Stationery Office.
With regard to the Coal and Steel Community, two questions have been raised about the position of the Iron and Steel Board and nationalisation. Nationalisation is covered by Article 83 of the Treaty of Paris. As I think the House will understand, I do not wish to offer any views about these questions before we enter negotiations and discuss matters with the Coal and Steel Community.
Are we to understand that in the negotiations the right hon. Gentleman will face the fact that there has been a decision by the International Court of Justice in regard to these matters? How does he expect that the Iron and Steel Board will be able to control prices in the light of such decisions as that?
I fully recognise the first fact the hon. Gentleman mentions. It was for that reason that I did not wish to offer any views at this stage about the second point he raises.
I think that the House will have realised that the questions in regard to agriculture are not entirely without complication. Several hon. Members mentioned the matter of prices, the intervention price, the target price, the sluicegate price, the guide price and various other things. I think, if I understood him, that what the Leader of the Opposition omitted to mention yesterday was the montant forfaitaire.
My hon. Friend the Member for Sheffield, Heeley (Sir P. Roberts) asked about the financial arrangements. I do not entirely accept the figures which I understood him to put forward about the change in prices of agricultural foodstuffs, but I wish to make clear that, so far as there is a reduction in subsidies to domestic agriculture, this, of course, will accrue to the Treasury. From the point of view of the levies, special arrangements have been made for the next three years, as my right hon. Friend said last night, for the contribution from each country to the Community funds. I only wish to make the point that those two aspects of finance, internal subsidies and the external levy, are quite separate.
My right hon. Friend was asked about voting procedures on the financial contributions, whether by levies or other means. There will be a review of these arrangements, which have been made for the first three years, and we should in the meantime expect to negotiate an arrangement for ourselves. During the first review about contributions for the remainder of the transition stage, the decision will be by unanimous vote. Once the Common Market stage is reached, our understanding is that decisions will be subject to Article 201 which also provides for a unanimous vote. My hon. Friend the Member for South Angus (Sir J. Duncan) asked various other questions, similar to those asked by the right hon. Member for Belper, about reviews. He made a most thoughtful contribution, but I cannot give him further details at this stage.
Both right hon. Gentlemen asked about the future regulations. Here we are faced with a dilemma to which they would perhaps give thought. Either one waits, which may be a considerable time, until each of the regulations of the Community becomes final, in which case they will be organised to suit the existing Six members of the Community, or if one is able to conclude negotiations before that time, the final arrangements are not settled but one plays a part in settling them for an enlarged Community. That is a fundamental question in the organisation of these negotiations.
There were also a group of questions about the economic union provisions of the Treaty. Many hon. Members have discussed planning. It is not for me to offer suggestions on what exactly is meant by hon. Members when they raise questions of planning, but I was surprised to hear the right hon. Member for Huyton say that he thought that the Community was anti-planning or certainly anti-national planning. I do not find that in the Treaty of Rome and I do not believe that the establishment of planning machinery is incompatible with the provisions of the Treaty.
There is also the question of public ownership. That, I believe, is specifically recognised by Article 90 of the Treaty. The right hon. Gentleman made the point that this cannot be used for planning purposes. I do not believe that that is the case, either. It can be used by national Governments for planning purposes, provided that there is no discrimination against other parts of the Community. Surely as members of the Community we should not want to see discrimination against us by other parts of the Community. It is therefore a question of a balance between all the members of the Community to see that there is fairness. There is, of course, a great deal of nationalisation in the other countries of the Community. In addition, under Article 77, there are special provisions for the railways. I know that these thoughts are not likely to appeal to my right hon. and hon. Friends, but I am giving them to the House in all fairness.
The right hon. Gentleman said that he thought that the distribution of industry under the Local Employment Act, for which the Government were responsible two years ago, might well become a dead letter. Again, I can reassure him; I do not believe that that need be the case in the least. These aids are permitted specifically under the Treaty of Rome. Most member States already have systems of State aid comparable with those in this country, and many of them are more extensive, and our belief is that there is no reason why restrictions should be imposed on our work in this sphere.
Fiscal questions have also been raised. The provisions of the Treaty of Rome about fiscal and economic policy, which are Articles 99 and 103, and which call for harmonisation or co-ordination, can proceed only by unanimous vote, and therefore it rests with us the extent to which these matters should proceed. Similarly, there are questions about action in the case of difficulties of balance of payments. This, as the right hon. Gentleman rightly said, provides for immediate action, with reference then to the Commission and after that to the Council and, I believe, to the Court of Justice. The position surely is that countries which were prepared to help us in July of last year when we were not a member of the Community are even more likely to be willing to take part in Community activities when we become a member of the Community. I believe that this must be approached from a practical point of view.
The right hon. Gentleman asked about the social services and what would be the position of the National Health Service. I believe that there is no cause for alarm or anxiety of any kind here.
There is already cause.
There is opportunity under the Treaty for the right hon. Gentleman to suggest any measures which he thinks should be taken, but under Article 117 of the Treaty the responsibility is definitely placed on member States of improving the living and working conditions of its people. But there is nothing in the Article which requires us to bring our social services or the National Health Service, in particular, into line with those of the other members of the Community. What it is necessary to do is to make provision for the social security services for migrant workers under Articles 51 and 121. Here I will tell the House frankly that it is necessary for us to discuss the administrative changes necessary to handle this. As many hon. Members will understand, it is a question of the method of settling the accounts between the countries which are involved.
May I turn to what may be termed the institutional and consitutional questions? The right hon. Gentleman rightly laid great emphasis on the voting procedures under the Treaty of Rome. In no way do I minimise the importance of this. His right hon. Friend returned to it only just now. But I must tell him, as I have already told the House, that we have not yet reached the stage of discussing this in the negotiations, and the pattern can best be worked out when it is seen which other countries will become full members. When that time comes, I realise full well the importance of the point of view which he put forward.
There is then the question of the general obligations of the Treaty, about which some of my hon. Friends have spoken. The important point is that the obligations are set out clearly in the Treaty, under Article 3, and this cannot be amended without ratification of Parliament because of the unanimous vote. The powers of the institutions are clearly set out, and every hon. Member can see them. Article 235 provides that new powers can be conferred only by unanimous vote after consultation with the Parliamentary Assembly. The regulatory powers of the Community, to which my right hon. and learned Friend the Member for Hertfordshire, East referred, are in almost all cases exercised by the Council of Ministers.
The Commission, about which some hon. Members expressed anxieties, has virtually no independent power to issue regulations having the effect of law. It may in certain circumstances, which are defined in the Treaty, issue directives, take decisions and exercise the normal administrative functions without which the Community as such could not operate, but these are subject to control and, indeed, annulment by the Court of Justice on the grounds of incompetence, violation of substantial procedural provisions, infringement of the Treaty or abuse of power. There are some who would argue that this form of juridical control is greater over the actions of the Commission than that over the actions of a Whitehall Department in this country. They are, in fact, very strict if we are using Community machinery. In the last resort, the Commission itself is liable to dismissal by the Parliamentary Assembly. The Commission will include many British nationals on its staff who will be familiar with our own problems.
Then there is the question that the regulations approved by the Council of Ministers will have the force of law in member countries. That is, of course, true. There are two points which I should like to make about it. For the existing regulations, Parliament will have the opportunity of discussing them, with the Treaty itself, if a solution is reached to the problems and these are placed before Parliament at the end of successful negotiations. Concerning the future regulations, we shall participate in the making of these through our Ministerial representatives on the Council. Throughout the transitional period this will be by unanimity vote. There is also, of course, a form of democratic control in that the Parliamentary Assembly must be consulted in connection with all important regulations.
The last point is the question of the application of these regulations in this country. This matter has been under review by Her Majesty's Government, and we shall place all the information about it before the House when the appropriate time comes in the negotiations. My right hon. and learned Friend the Member for Hertfordshire, East referred to the specific case of Rules 14 and 15 under Articles 85 and 86 about instruction to British firms and entry into factories. I understand that this is limited to investigating practices restrictive on inter-State trade only. Before any forcible entry could be made, application would have to be to our own courts and supervised under our own courts. Again, the point surely is this. In a community one wants to see these regulations supervised and properly carried out in the other member States, and we ourselves should accept the same arrangements.
There is then the group of questions which are really constitutional and which are commonly described as federal or confederal. My hon. Friend the Member for Worcester (Mr. Walker) asked about these. It is much too simple an approach to ask: is this going to become confederal or federal? It is an oversimplification which, I believe, to be quite unjustified. I expressed our views in the Western European Union in my statement on 10th April. I should like to assure hon. Members that there is no misunderstanding in Europe about our position. The form of political co-operation that we favour at this moment is clearly understood and it is fully understood that we take the pragmatic approach of letting these institutions develop as the situation in Europe
Indeed, it was because they understood our views so clearly that the Belgian and Dutch Governments took up the position which they did during the discussions in Paris on 17th April. It was not the position of the British Government, but they made their own decisions and took up their own position that, if it was to be the form which I mentioned yesterday in the context of a political union roughly corresponding to confederation, then they wished to see the United Kingdom a member before they accepted that for themselves. I can assure the House that there is no misunderstanding in Europe about it.
How is it going to develop? It is too early at this stage to say. Many in Europe would like to see a federal system. Many others wish to see more gradual progress. The Community is a new form of organisation, as my right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones) said in his most interesting speech yesterday. Looking back, how many of us could have said how the institutions of our own Commonwealth would have developed over the past 15 years? They have developed in an astonishing way to meet the needs of the situation and surely we believe that the institutions in Europe will develop in the same way. But I profoundly believe that in whatever way they may grow, or be created, we here, with all our experience, can make a great contribution towards their development.
We are now drawing very near to the close of what the right hon. Member for Belper described as a memorable debate. I have to be very careful what I say at this stage. I have been accused by the hon. Member for Nelson and Colne (Mr. S. Silverman) of almost going to the extent of showing some enthusiasm in an endeavour to bring these negotiations to a successful conclusion. My right hon. and learned Friend the Member for Hertfordshire, East, on the other hand, suggested that it was difficult for me to see the wood for the trees. I sometimes felt, as I listened to his impressive speech, that many sylvan glades had heard his measured phrases in earlier preparatory stages of his admirable speech.
When we are dealing with these negotiations, we always bear in mind the larger context. That was why I took the liberty in my opening speech yesterday of trying to put this before the House, as the right hon. Member for Belper did, and I do not think that there were very big differences between us. All I ask is that right hon. and hon. Members who have objections to these negotiations, specific objections, many of which may be perfectly justifiable, should set them in the larger context and then try to make a balance as to which is the right course which we should follow when we are able to bring these negotiations to the stage at which we can put the solutions before the House.
Can we agree that this is one of the greatest issues facing us? Let us argue it out on the basis of the substance of the problem. Let those who object no longer base their opposition on the grounds of lack of consultation or information. Can we recognise that everybody is doing his utmost to carry out consultation with the whole of the Commonwealth and with E.F.T.A., all the time? Let us not cover our opposition on these grounds, but argue it out frankly and fairly on the substance.
The hon. Member for Houghton-le-Spring (Mr. Blyton) said that the difference was that he was a Commonwealth man and my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) was a European. That approach is fundamentally wrong. We who are carrying on these negotiations believe in the Commonwealth. Every leading official in the delegation has had experience of Commonwealth trade, and most of them know it intimately, as I do myself.
It is true that no one knows better than a former Patronage Secretary the limits of the human mind and the human spirit! But I do not believe that it is beyond the bounds of man's mind to achieve the reconciliation of the two concepts of our Commonwealth and of Europe. Surely we make progress, mankind makes progress, only through the reconciliation of ideas. When these technical problems sometimes seem baffling and difficult for us, we do not despair. We feel that what we are dealing with is not small or big questions of tariffs or trade: we are dealing with fundamental human values, because they affect the future of millions of people here, in Europe, in the Commonwealth and right across the world, and that is what gives us the inspiration to carry on.
This debate has indeed been heartening, and I am grateful to the House for what it has said.
Before the right hon. Gentleman sits down, would he answer two questions?
I cannot hear. Am I being offered a point of order?
|Division No. 216.]||AYES||[10.0 p.m.|
|Baxter, William (Stirlingshire, W.)||TELLERS FOR THE AYES:|
|Silverman, Sydney (Nelson)||Mr. M. Foot and Mr. Emrys Hughes.|
|Agnew, Sir Peter||Gardner, Edward||Macleod, Rt. Hn. lain (Enfield, W.)|
|Aitken, W. T.||Gibson-Watt, David||McMaster, Stanley R.|
|Allason, James||Glover, Sir Douglas||Macmillan.Rt. Hn. Harold(Bromley)|
|Arbuthnot, John||Glyn, Sir Richard (Dorset, N.)||Macmillan, Maurice (Hallfax)|
|Balniel, Lord||Goodhew, Victor||Maddan, Martin|
|Barber, Anthony||Green, Alan||Manningham-Buller, Rt. Hn. Sir R.|
|Barlow, Sir John||Gresham Cooke, R.||Marples, Rt. Hon. Ernest|
|Batsford, Brian||Grimond, Rt. Hon. J.||Marten, Neil|
|Baxter, Sir Beverley (Southgate)||Grosvenor, Lt.-Col. R. G.||Mathews, Robert (Honiton)|
|Berkeley, Humphry||Hall, John (Wycombe)||Maudling, Rt. Hon. Reginald|
|Biffen, John||Hamilton, Michael (Wellingborough)||Mawby, Ray|
|Bingham, R. M.||Harris, Reader (Heston)||Maxwell-Hyslop, R. J.|
|Birch, Rt. Hon. Nigel||Harrison, Col. Sir Harwood (Eye)||Maydon, Lt.-Cmdr. S. L. C.|
|Bishop, F. P.||Harvey, John (Walthamstow, E.)||Mills, Stratton|
|Black, Sir Cyril||Hay, John||Miscampbell, Norman|
|Bossom, Clive||Heath, Rt. Hon. Edward||More, Jasper (Ludlow)|
|Bowen, Roderic (Cardigan)||Hiley, Joseph||Morgan, William|
|Box, Donald||Hill, Dr. Rt. Hon. Charles (Luton)||Morrison, John|
|Boyd-Carpenter, Rt. Hon. John||Hobson, Sir John||Mott-Radclyffe, Sir Charles|
|Boyle, Sir Edward||Hocking, Philip N.||Noble, Michael|
|Braine, Bernard||Holland, Philip||Nugent, Rt. Hon. Sir Richard|
|Bromley-Davenport.Lt. -Col.SirWalter||Holt, Arthur||Orr, Capt. L. P. S.|
|Brooke, Rt. Hon. Henry||Hooson, H. E.||Orr-Ewing, C. Ian|
|Brown, Alan (Tottenham)||Hope, Rt. Hon. Lord John||Osborn, John (Hallam)|
|Buck, Antony||Hopkins, Alan||Osborne, Sir Cyril (Louth)|
|Bullard, Denys||Hornby, R. P.||Page, Graham (Crosby)|
|Campbell, Gordon (Moray & Nairn)||Howard, John (Southampton, Test)||Page, John (Harrow, West)|
|Channon, H. P. G.||Hughes Hallett, Vice-Admiral John||Pearson, Frank (Clitheroe)|
|Chataway, Christopher||Hughes-Young, Michael||Percival, Ian|
|Clark, William (Nottingham, S.)||Hulbert, Sir Norman||Pickthorn, Sir Kenneth|
|Cleaver, Leonard||Hurd, Sir Anthony||Pitt, Miss Edith|
|Collard, Richard||Iremonger, T. L.||Pott, Percivall|
|Cooke, Robert||Irvine, Bryant Godman (Rye)||Prior, J. M. L.|
|Cooper-Key, Sir Neill||James, David||Profumo, Rt. Hon. John|
|Cordeaux, Lt.-Col. J. K.||Jenkins, Robert (Dulwich)||Proudfoot, Wilfred|
|Corfield, F. V.||Johnson, Dr. Donald (Carlisle)||Pym, Francis|
|Costain, A. P.||Jones, Rt. Hn. Aubrey (Hall Green)||Quennell, Miss J. M.|
|Coulson, Michael||Joseph, Sir Keith||Ramsden, James|
|Courtney, Cdr. Anthony||Kerans, Cdr. J. S.||Rawlinson, Peter|
|Craddock, Sir Beresford||Kerr, Sir Hamilton||Redmayne, Rt. Hon. Martin|
|Critchley, Julian||Lambton, Viscount||Rees, Hugh|
|Cunningham, Knox||Leather, Sir Edwin||Rees-Davies, W. R.|
|Curran, Charles||Leavey, J. A.||Renton, David|
|Dalkeith, Earl of||Legge-Bourke, Sir Harry||Ridsdale, Julian|
|de Ferranti, Basil||Lewis, Kenneth (Rutland)||Robinson, Rt. Hn. Sir R. (B'pool, S.)|
|Doughty, Charles||Lindsay, Sir Martin||Robson Brown, Sir William|
|Duncan, Sir James||Linstead, Sir Hugh||Rodgers, John (Sevenoaks)|
|Eden, John||Litchfield, Capt. John||Roots, William|
|Elliot, Capt. Walter (Carshalton)||Lloyd, Rt.Hn.Geoffrey (Sut'nC'dfield)||Ropner, Col. Sir Leonard|
|Emery, Peter||Longbottom, Charles||Sandys, Rt. Hon. Duncan|
|Emmet, Hon. Mrs. Evelyn||Longden, Gilbert||Sharples, Richard|
|Erroll, Rt. Hon. F. J.||Loveys, Walter H.||Shaw, M.|
|Farr, John||Lubbock, Eric||Shepherd, William|
|Finlay, Graeme||Lucas, Sir Jocelyn||Skeet, T. H. H.|
|Fisher, Nigel||Lucas-Tooth, Sir Hugh||Smith, Dudley (Br'ntf'd & Chlswick)|
|Fletcher-Cooke, Charles||MacArthur, Ian||Smithers, Peter|
|Fraser, Hn. Hugh (Stafford & Stone)||McLaren, Martin||Soames, Rt. Hon. Christopher|
|Fraser, Ian (Plymouth, Sutton)||Maclay, Rt. Hon. John||Spearman, Sir Alexander|
|Freeth, Denzil||Maclean,SirFitzroy(Bute&N.Ayra.)||Speir, Rupert|
|Gammane, Lady||McLean, Neil (Inverness)||Stodart, J. A.|
|Storey, Sir Samuel||Thorton- Kemsley, Sir Colin||Ward, Dame Irene|
|Studholme, Sir Henry||Thorpe, Jeremy||Webster, David|
|Summers, Sir Spencer||Touche, Rt. Hon. Sir Gordon||Wells, John (Maidstone)|
|Tapsell, Peter||Turner, Colin||Whitelaw, William|
|Taylor, Sir Charles (Eastbourne)||Turton, Rt. Hon. R. H.||Williams, Dudley (Exeter)|
|Taylor, Frank (M'ch'st'r, Moss Side)||van Straubenzee, W. R.||Wilson, Geoffrey (Truro)|
|Taylor, W. J. (Bradford, N.)||Vane, W. M. F.||Wood, Rt. Hon. Richard|
|Teeling, Sir William||Vaughan-Morgan, Rt. Hon. Sir John||Woodhouse, C. M.|
|Temple, John M.||Vickers, Miss Joan||Woodnutt, Mark|
|Thatcher, Mrs. Margaret||Vosper, Rt. Hon. Dennis||Worsley, Marcus|
|Thomas, Leslie (Canterbury)||Walder, David|
|Thompson, Kenneth (Walton)||Walker, Peter||TELLERS FOR THE NOES:|
|Thompson, Richard (Croydon, S.)||Walker-Smith, Rt. Hon. Sir Derek||Mr. Chichester-Clark and|
|Mr. J. E. B. Hill.|