European Economic Community

Part of the debate – in the House of Commons at 12:00 am on 7 June 1962.

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Photo of Mr William Aitken Mr William Aitken , Bury St Edmunds 12:00, 7 June 1962

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!