European Economic Community

Part of Civil Estimates, 1962–63 – in the House of Commons at 12:00 am on 6th June 1962.

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Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South 12:00 am, 6th June 1962

All right. Let us say the target price. There is a price in the home market and an import price, and the levy is to bridge the difference between them so as to make it impossible for these products coming from outside the Common Market ever to compete at lower prices with products of the Common Market itself. Everybody in the Chamber is nodding, so I hope that that is all right. I shall not go into too much detail, as I have already warned the Minister of Agriculture. I should have thought that this was pretty intolerable. First, British consumers have to pay higher prices. I know that this can be exaggerated and I am not putting it as a main objection, although it is not to be entirely disregarded.

Secondly, with regard to quantities, all that the Commonwealth, under this system, would be allowed would be to make up whatever difference there might be, at whatever price is fixed, between the total demand and the supply from the E.E.C. countries. They are more or less saying, "We will let you have a bit in if we want it", but we cannot call that by any description fair competition. It is the toughest kind of protection that one can imagine. It is tougher than anything we have done or the Europeans do today. When on top of that we are expected to import higher cost food from the Continent and, in so far as we bring in the Commonwealth foodstuffs, to pay a levy the process of which go for the benefit of European agriculture, then honestly I think that this is really too steep altogether. Let us have no nonsense about the moral idealism involved in this. This is strict protectionism for European agriculture. I know that we protect our own agriculture, but I do not think that we have ever done anything quite as bad as this. I hope, therefore, that the Government are not contemplating, even in the long run, agreeing to anything of this sort. They really must resist it.

Moreover, I do not think that a temporary solution here is good enough. I do not want to prejudge too much. I am aware of the danger of doing that, but we could not have a position in which we say to New Zealand and Australia, "It is all right. You can carry on for a bit. We will go on buying from you. You can have a levy-free quota for a period but, after that, chums, you are out." We cannot keep the Commonwealth together on that basis. We may keep the Commonwealth countries together for a few years but we may not keep them even for that long, because they will look for other markets all the time.

A temporary solution, therefore, will not do here, and I say that we should have information about what the Lord Privy Seal meant by "comparable outlets". He told us he meant "access" and not "sales", but the whole thing turns on the terms of access and until we know that I do not see that we are much further forward. The Lord Privy Seal said that we should have temporary arrangements and after that a series of international marketing schemes. I have heard all that before, and I am doubtful whether it means a great deal. Anybody who has had experience knows the difficulties.

I am rather in favour of these international schemes. We tried to arrange some in the simplest commodities— rubber and tin—when we on this side of the House were in office, in order to try and get more stable prices. But how we can get international guarantees covering butter, cheese, beef and that kind of thing is beyond me. I hope we shall not be fobbed off with a meaningless phrase which is meant to disguise the fact—and let us not beat about the bush—that we are selling the Commonwealth down the river on this issue.

We should say to the E.E.C. countries that if they want to sell more here, as they do—and this is one of our strongest bargaining points—they must take more from the Commonwealth. This is one of the basic principles that should be followed. I commend to the Lord Privy Seal Professor Meade's suggestion of quotas not fixed but related to and growing with European consumption. That may be a possible way out.

I turn now to E.F.T.A. and I want to remind the House in particular of the very far-reaching commitments we have here. The Lord Privy Seal read the original Motion, and I think that I must read it. It is worth reading. It says: Ministers agreed that … the members of E.F.T.A. should co-ordinate their actions and remain united throughout the negotiations. Ministers resolved that the European Free Trade Association, the obligations created by the Convention between the members, and the momentum towards integration within the association, would be maintained at least until satisfactory arrangements have been worked out in negotiations to meet the various legitimate interests of all members of E.F.T.A., and thus enable them "— let the House please note— all to participate from the same date in an integrated European market. They agreed that a partial solution which created a new economic division within Western Europe could not in any circumstances be regarded as satisfactory. That is pretty flat and we are bound by it. I hope that we shall stand by it. It is justified overwhelmingly by the close association we have with the Scandinavian States. We have had it for years and it is valuable to us, and we like it. Secondly, our trade with E.F.T.A. is 13 per cent. of total exports, as against 16 per cent. with the Common Market, and it is therefore extremely important. Thirdly, and last but not least, if we go in without any of the E.F.T.A. countries our voting position in practice within the Council of Ministers is likely to be gravely affected. Therefore, we must stand by them.

It may be said that Norway and Denmark will come in if we go in. I hope so. Then there are the neutrals. The Lord Privy Seal dismissed this question too easily. He must know very well that the Americans are throwing all their weight at the moment against the association of the neutrals with the E.E.C, and especially against the association of Switzerland and Sweden.

I think that this is a silly point of view. I think that they are foolish to take this line. We want these countries to be with us. We do not want them isolated, and it is confusing a political and defence set up—because they happen to be neutrals—with what is basically an economic set up. It is not proposed that they should be full members. But why should not they have economic arrangements which enable them to participate in other ways?

I should like to add this argument, which I think is of some importance. If Sweden does not come in, if the Six turn down her application for association, is it really likely that Norway and Denmark will come in? I assure the House that according to my information the Norwegian Government would not expect, even if they tried, to carry through the referendum which they would have to have on any proposal for them to come in without Sweden. The reason is simple. They would have to erect tariff barriers against Sweden. This therefore is of great importance to us, because it is greatly in our interest that Norway and Denmark should come in.

I want an assurance that pending all this we will keep E.F.T.A. going. Do let us keep something in reserve. I know that it is the custom to say that it does not really matter, that it is not important, but I think that it is of some importance. It affects a lot of our trade, and we may be glad to have it if the negotiations do not proceed very well.

I should like now to say a word about the legal and constitutional position. I have never been much impressed with the argument about loss of sovereignty, One always loses sovereignty if one signs a treaty. There is nothing peculiar about that, but there is a difference in one respect, and a very important one. If we sign the Treaty of Rome, we not only bind ourselves to do certain things; we bind ourselves to accept certain decisions subsequently made, notably majority decisions, because to accept unanimous decisions does not matter since one has to participate in them.

Here I must ask a question. Is it the case that regulations made under the Treaty of Rome by the Council of Ministers are to be automatically law in this country without them ever being considered by this House? I am not saying that this is necessarily a crucial point but it is necessary to know where we stand because if this is to happen it is a complete departure from any precedent. It is not necessarily fatal, because one has to remember that the other countries are in the same position, and some of these regulations about fair competition may be to our advantage. All the same, it is a big difference if we are now to have bits of out law made for us by majority decisions of the Council of Ministers.

The main point is the enormous importance of the voting arrangements in the Council of Ministers. Take, for instance, all the agricultural matters which fall to be settled by a qualified majority, or the question of any possible foreign exchange crisis where we wanted to reimpose restrictions. It goes to the Council of Ministers which by a qualified majority can tell us not to do it.

The present position is that France, Italy and Germany have four votes each. Belgium and Holland have two, and Luxembourg has one. One-third vetoes. Therefore, France plus Belgium can veto anything—one Power plus either Holland or Belgium.

When we come in, supposing we get four votes, and supposing, which may be optimistic, that Norway and Denmark, and Ireland for that matter, get two each. That is another ten votes, make a total of 27. If we apply the two-thirds majority to that one has to get nine votes on one's side to veto. One does not get it with Norway, or even with Norway and Denmark. One needs at least one other country, Luxembourg for one, or one of the others for two. One cannot veto unless one has, in practical terms, three other countries on one's side.

I hope that the House realises the enormous importance of this and I should like to hear the views of the Government on it. This is a matter on which I should be very loath to give way without ensuring that the right of veto remains one large and one small Power, as it is today. We might get some help on this from General de Gaulle because I do not suppose that he would like to be overridden either. This is something at which the Government ought to look.

On the constitutional side, I am not going into the considerations of the Fouchet Committee, the Bonn declaration, and all that. I am glad to say that we have not yet committed ourselves to anything here. But undeniably those who are enthusiastic about European federation will use the peculiar independent position of the Commission to lead on to the argument that therefore it must be put under Parliamentary control and that therefore there must be a Federal Parliament. I am sure that the Lord Privy Seal has heard this argument. I heard it last week, and I put forward a proposition here. I am all in favour of Parliamentary control of national Governments, but if it comes to the kind of set up that we are going to have there, while I do not like the independent position of the Commission, it ought to be, not under a Federal Parliament, but under a stronger Council of Ministers. This would fall in with the British tradition of putting civil servants under Ministers. So I hope that the right hon. Gentleman will follow this advice.

Finally, on the basic political issue, we have to ask ourselves a question—in or out? What are the alternatives? The Rome Treaty brings with it no commitment. Right. So if we go in on present terms we can veto any further advance towards federation. I was a little worried about some of the phraseology used by the right hon. Gentleman, because he spoke with such enthusiasm about greater political union in Europe. Would not he agree that if it came to European federation, to a European Federal State, that would mean the end of the Commonwealth? I cannot conceive of it going on in those circumstances.

There must be a point at which a political move of this kind could be so dangerous to the Commonwealth as really to be something we could not contemplate. I will be frank with the House. For my part I do not want any more political moves at this stage. I think that we should stand where we are. I hope that the Government will make it plain that they are not enthusiastic about any swift move in this direction. But if we stay out, there are certain dangers. After 10 or 20 years we may find that the Commonwealth as we know it today, not through any fault of our own, changes, declines, and does not count in the way that it does today. This might happen and we might find ourselves excluded from a tough, strong, European State, a little island off Europe with nothing else. This is the risk, the danger.

There is another risk. If we stay out and the E.F.T.A. countries stay out, as they will, with the danger of the Common Market countries becoming a Federal State, certainly after General de Gaulle has ceased to prevent it, or if he were to change his mind, there would be a greater danger of this State being inward-looking, despite what the Lord Privy Seal said. There would be a greater danger of it being indifferent, not interested in the rest of the world, nationalistic in outlook, a third force wanting its own nuclear weapons and wanting to break away. The effect of this on the Western Alliance could be serious.

As things are, if we went in we could probably stop that happening, but on the one condition only, that as we go in we maintain our links with the Commonwealth. This is essential. If we go in breaking those links, breaking them with E.F.T.A., our capacity for doing what I think we might be able to do in Europe would be enormously reduced. Let us be under no illusions about this. We could destroy the Commonwealth in two ways. Either by a political commitment which went much too far, or by making an agreement which, to use Mr. Menzies' words, did critical economic damage to the Commonwealth.

I do not often quote myself, but I cannot think of anything better to end this speech than to say what I said at the end of my broadcast the other day: To go in on good terms would, I believe, be the best solution to this difficult problem, and let us hope we can get them. Not to go in would be a pity, but it would not be a catastrophe. To go in on bad terms which really meant the end of the Commonwealth would be a step which I think we would regret all our lives, and for which history would not forgive us.