Order read for resuming Adjourned debate on Question [21st July] :
That this House takes note of the White Paper entitled The United Kingdom and the European Communities (Command Paper No. 4715).—[The Prime Minister.]
§ Question again proposed.
§ 4.4 p.m.
§ Mr. Roy Jenkins (Birmingham, Stechford)
This is intended to be a major debate about the merits of this great and historic issue and the reasonableness or otherwise of the terms which the Government have obtained. I think, if I may be permitted to say so, that hon. and right hon. Gentlemen opposite would be wise to treat it as such and not, on occasions, as an exercise in scoring party points. Last night the Chancellor of the Duchy quoted my right hon. Friend the Leader of the Opposition five times directly and three times indirectly. I think that that pointed to a certain paucity of material on his own part. I think he would have been better advised to have argued his case in his own words.
There are deeply held differences of opinion on this issue on both sides of the House and cutting right across the House. My right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) said last night that several senior members of the Government are very recent converts to this cause. I think that we shall get on much better if we all respect one another's sincerity, and that we shall impress the country and impress Europe and the world more if we talk more about the issues and less about one another.
My position on this issue is, I believe, moderately well known. I have endeavoured to make the general case to the House for entry on a substantial number of occasions over the past ten years. I do not propose to go over all that ground again today. My convictions are as strong as ever, and my views about the desirability of entry are not abated by the terms. The terms are not ideal, but, to me, they appear acceptable. There are, however, a number of points 1694 about them which are far from adequately dealt with in the White Paper, and with some of these, as well as with some others, I propose to deal.
I will begin, if I may, with the balance of payments and the general management of the economy. The essence of the economic case for going in is the belief that it will increase our rate of growth and, therefore, the amount of resources available to us as a nation and that this will substantially out-balance any additional payments either way that we have to make. This result, however, as I think we shall all recognise, could—I stress, could—be vitiated if while additional resources became available to us at home the balance of payments worsened and the Government reacted to this in such a way as to cut back, choke off, growth we were getting and left us no better—or even, conceivably, worse—off than we were before. I believe that this would be a very pessimistic assumption, and, provided the Government handle the management of the economy sensibly—this Government and their successors—during the transitional period and beyond, the dynamic argument—the dynamic argument about how we shall grow faster if we go in—is, in my view, not nearly as crude as is sometimes assumed by those who reject it.
It is not just the view that if we go in we shall get growth by a process either of accident or of infection. It should be growth because of certain logical consequences of entry. If we look at the experiences of the E.E.C. countries following the setting up of the Community we find a certain pattern. We find first of all a very large increase in intra-Community trade following the dismantling of tariff barriers and the setting up of the Community. It has been estimated on a sophisticated basis that the trade between the Six countries may well have grown in the early years of the Community by 50 per cent. more than it would have otherwise—by a very substantial amount indeed.
Other things follow from this. First, it is quite clear from the experience of all the Six countries that after going in, partly as a result of this great growth of trade, they had a very sharp and rapid increase in their levels of investment. But I believe, perhaps still more significantly, a second result followed, or at any rate 1695 came about subsequent to this increase in the volume of trade and is likely to have followed from it, "followed" in (he causal sense, and that is that there was a fall in each of the Six countries in the ratio of their export costs and prices to home prices.
This is a factor of great and marked significance. I compare prices over a whole range of home-producing industries and exporting industries in the Six. I compare the year 1960–61 with 1969, which is the latest year for which figures are available. In Germany the ratio of export costs and prices to home prices fell from 102.9 to 93.5 ; in Belgium it fell from 100.4 to 94.4 ; in the Netherlands it fell from 105 to 86.5 ; in Italy it fell from 108.4 to 89.6 ; in France it fell from 105.6 to 97.9. The degree of fall varied, but the fall in each case was substantial and significant. In this country, on the contrary, it went up between 1960–61 and 1969 from 101.8 to 106, a substantial and important difference from the point of view of the structure of the economy. In order that one may see the picture in a world context, I should add that in Canada and the United States it moved rather similarly to ours and in a contrary direction to that of the Community.
This is clearly, in my view at any rate, of crucial importance, because it means that each of the countries forming the Community secured a marked improvement in its competitive export position as a result of going in. It means that the prospect of growth led by investment and exports, which has eluded us for so long, would and could be opened up to us.
It means an approach to, a possibility of, curing, or moving towards curing—one must never exaggerate—the structural fault which has bedevilled our economy for so long—the tendency relatively to consume too much, not absolutely, because our levels are getting rather lower than those of others—but relatively as a proportion of our national income, to import too much, to export too little and to invest to little. Therefore, it offers the prospect of an approach to curing this structural fault in the economy.
§ Mr. J. Enoch Powell (Wolverhampton, South-West)
The right hon. Gentleman has referred to the United States and 1696 Canada as well as this country. Would he say whether the phenomenon which he has pointed out in the case of countries which have joined the Community is not also shared by European countries, other than ourselves, which did not?
§ Mr. Jenkins
I think not so strikingly by any means. I think this follows from the setting up of the Community and the great growth of intra-Community trade.
§ Mr. Neil Marten (Banbury) rose—
§ Mr. Jenkins
I have not yet finished dealing with the question asked by the right hon. Gentleman. If the hon Gentleman will keep quiet for a moment, I will do so.
I agree that other European countries, too, have shown a rapid increase, in some cases an even more rapid increase than the Six in their rate of growth, but I am not arguing—and I am sure that the right hon. Gentleman was following me—about a crude comparison of rates of growth. That is a crude argument by which I would not expect people to be more than superficially convinced. I am discussing a much more detailed argument, which is the effect of entry into the Community and a larger market and a great increase in trade on the structure and balance of the economy.
§ Mr. Marten
I am grateful to the right hon. Gentleman for giving way, but this is all part of the argument. Surely this intra-E.E.C. trade which was generated and stimulated when the Six got together was so stimulated because the tariff barriers were very much higher and they were reduced to zero. But if we were to join the E.E.C. the tariffs are already very much lower, 7 to 10 per cent., and we shall not get the same degree of stimulating effect.
§ Mr. Jenkins
That is not entirely true. Our tariff barriers on average are higher than those of the Six. The effect may not be quite so dramatic, but it could be a good deal less dramatic and still very dramatic to the future performance of our economy, because in this connection fairly limited amounts are of crucial importance.
I have put these points to the House at some length, but they are of crucial importance, because, unless our experience is totally disimilar to that of each of the Six, we should expect to attain a steady 1697 improvement in the competitive position of our exporting industries, not merely their performance vis-à-vis the Six themselves, not merely their exports to the Six, but to the rest of the world as well. In my view, therefore, there should be substantial favourable factors affecting the balance of payments to set against the unfavourable and somewhat more quantifiable factors about which we hear so much.
Beyond that, it means the prospect for an export-led growth and for curing the structural faults in the economy. I am not therefore pessimistic about the economic opportunities which entry would give us. Indeed, in my view the economic case has become somewhat stronger rather than weaker in the past few years. I used to take the view that the case was rather balanced economically and that it was a political case, but I now believe—and I can speak only for myself—that the economic case has become somewhat stronger.
I do not even share the widespread view that we must necessarily go through a very difficult period in order to reap later benefits. I think the immediate effect upon the vital and for us very weak sector of industrial investment can be very beneficial, and I think that the balance of payments costs within the first couple of years, before we can hope to get any dynamic benefits, are likely to be small, indeed, well within any normal measure of forecasting error—and that, of course, can be fairly large!
However, I have considerable doubts about how the Government will act within this potentially very favourable situation. In the course of the debate yesterday and in the White Paper they have not given any clear analysis of how they see the economic situation developing as and after we go in. I should like to know later in the debate whether the Government to some extent accept my analysis. I am not sure whether I should press the Foreign Secretary too hard on this point, though I have no doubt that he has considered it carefully in his studies of the position. But at a later stage I should like to know the extent to which they accept that analysis.
Still more important, I want to hear a clear answer to the comment made by my hon. Friend the Member for Cheetham 1698 last night. The economic object of this exercise is additional growth. It will be nullified unless they pursue policies totally different from those which we have seen in the past year. With today's disastrous unemployment figures—[AN HON. MEMBER : "AS a result of your policies."] No, I do not agree, although I admit that successive Governments and Chancellors of the Exchequer have not had a very inspiring growth performance. That is the basis on which we start. However, I did not sit on a balance of payments surplus of £600 million without doing anything with it—[AN HON. MEMBER : "With borrowing."] We dealt with that matter fully on Tuesday and the hon. Member ought to make more serious contributions to our debates than that.
There is no question at all that today's unemployment figures and particularly their effect on the weaker regions—to which I shall come in a moment—are a sobering thought indeed. They show us the nature of the difficulties we face, though they in no way weaken the case for entry. They show how we must change our economic performance to secure the benefit of the opportunities of entry. But what we must and should be given in this debate is a clear understanding from the Government that growth is to be given a new and decisive priority, because if this is not done the economic exercise of entry may be self-defeating.
We must also, in my view, have an understanding that those who are a little less well-off will be protected from bearing the burden of the impact costs, and this will not merely be a question of some Government help for very limited numbers of people manifestly below or right on the poverty line. There are many millions of other people who may be just above that line but whose standard of living is none the less in no condition to bear any additional burdens. I assure the right hon. Gentleman the Prime Minister and the Government that if they allow this burden to fall unfairly they will be opposed with the greatest possible determination from this side of the House.
I turn to questions of regional policy. These are matters of the greatest concern to many hon. Members and great numbers of people outside the House. I 1699 find it almost inconceivable that the Government in the White Paper should have dismissed this issue in three jejeune paragraphs. I fear it is symbolic of a Conservative insensitivity to the problems of the regions. It is doubly unfortunate in view of the fact that, as I see it, there is a great deal of very powerful argument to be brought forward about both freedom within the Six for individual countries to pursue what regional policies they think right and a very considerable record of relative success as well. I must ask the right hon. Gentleman the Secretary of State for Trade and Industry—I am sure this is the wish of the House generally—to devote considerable attention to this matter in his winding-up speech this evening and to expand on these three barren little paragraphs in the White Paper.
As I understand the matter—and we ought to have the Government's confirmation of this—every instrument of regional policy used in the United Kingdom is in use somewhere in the E.E.C. Industrial development certificates? They are in use in the Paris and Lyons regions of France. Investment grants? They are in use in both Germany and Italy. Direction of nationalised industry? Italy has long had a provision by which 60 per cent of new plant and 40 per cent. of total investment by public enterprise had to be in the South. Now these figures are, I understand, 100 per cent. of new plant and 60 per cent. of total investment. Differential transport subsidisation? This certainly applies in the areas of West Germany closest to the Eastern zone and, I believe, in Italy, too. Regional employment premium? This generally was thought not to be allowed, but I am informed that in the South of Italy the State pays the employers' insurance contributions for firms above a certain very small size—I think firms with either 32 or 35 employees. This seems to me to be an intensified form of R.E.P. under a different name.
The one thing which appears to be out is investment allowances as opposed to investment grants, but this is more for the other side of the House to worry about than this side. In any event, it is not at all clear that these are forbidden. It is merely that no country in the Six has 1700 been so foolish as to prefer allowances to grants.
But the real test of regional policy is not whether one has a beautiful set of tools but what results they produce. By this test the indications—which are not overwhelmingly clear, and we must try to look at these matters objectively—axe that nearly all the Community countries have done a little better than we have. During the 'sixties most of the poorer regions came a little closer to the average of national gross domestic product in France, Germany and Italy. Most of the regions in those three countries, though not quite all, moved up so that the average income per head in the poorer regions came nearer to the average of the nation as a whole than hitherto was the case. Here, over this period from about 1960 to 1968—for which we both share some responsibility—except for the Southwest, and, surprisingly and very marginally, Northern Ireland, they moved further away. This has been the case with Scotland, the Northern Region, Wales and the North-West. The explanation is not that our tools are less good—on the whole our tools have been more formidable and better than those of anybody else and we shall still be able to use them, and anybody else will be able to use them who likes to—but that the best tools in the world are not wholly effective unless used against a background of a buoyant and expanding economy. If one is not doing that, then inevitably the exercise is to some extent running on the spot. I hope the Secretary of State will this evening give much fuller details of the Government's thinking on this matter than anything we have heard from them so far.
I turn to the question of sterling. The paragraphs in the White Paper dealing with the future of sterling are somewhat more extensive than those dealing with regional development, but they are no more originally informative for they concern almost exclusively quotations from speeches already made and published by the Prime Minister and the Chancellor of the Duchy of Lancaster. I wish to make it clear that I welcome without reservation the run-down and eventual final end of sterling's special position as a reserve currency. This has long been a nonsense, both for ourselves and 1701 for the world as a whole. Attempts to support the second reserve currency of the world upon the narrow base of the United Kingdom economy has been like trying to stand a pyramid on its point and has been the source of considerable international monetary imbalance, as well as a considerable restriction upon our own freedom of economic development. What is remarkable is that this is being accepted by a Conservative Government. Ten years ago, or even less, the Conservative Party was still regarding sterling as one of the brightest jewels in our crown. Now the pull of Europe is changing all this, in my view to our great national advantage. I hope that none of my hon. Friends will be foolish enough to regret this change.
What we ought to hear from the Chancellor of the Exchequer on Monday is far more explanation than he or the Prime Minister have so far given of their intentions for the replacement of sterling. Of course, without question the position of sterling holders must be safeguarded. That is common ground between all of us who have had, or have, or are likely to have responsibility in this matter. But, equally, there must be no question of our undertaking a stiff, fixed repayment programme. This would be an unacceptable constriction upon ourselves, and it would be undesirable for the rest of the world, as it would mean either a further reserve burden upon the dollar, with everything being put upon the dollar, which it is manifestly unable to carry at present, or a reduction in world liquidity, which is equally clearly undesirable for other reasons.
What we obviously need is a new international reserve asset. We ought to have some indication—not a final indication—from the Chancellor whether the Government are thinking primarily in European terms or in wider terms, possibly the setting up of a world reserve bank and moving away from the special reserve rôle not merely of sterling but of the dollar as well, because the dollar is beginning to get into exactly the sort of position—rather more than beginning ; it has got into it—as has so bedevilled sterling in this country for nearly two decades. I am rather inclined to the latter, international solution although either solution is better than where we are now. 1702 But we should certainly have some indication of the Government's thinking.
Sterling leads me to give the House some views about what may appear at first sight to be an unconnected issue : the sovereignty issue. Some people in this House and outside fear the E.E.C. because they think it means giving up irrevocably a large measure of control over our destiny. I do not see it this way at all. The facts of the modern world have removed already a large part of that control. If we delude ourselves by thinking that we can cling to the shadow of sovereignty, as a result we shall have less and not more influence on what really happens to us.
I illustrate this by describing to the House one aspect of my experience as Chancellor when I attended the two special crisis meetings of the Group of Ten, the principal monetary powers of the world. One meeting was in Stockholm ; the other was in Bonn. They both took place at times of potential crisis and considerable difficulty for us, and our concern with the outcome of those meetings was very great indeed, because their outcome could have been crucial to the whole future standard of living in this country. These meetings dealt with different aspects of the same underlying issue, the world's monetary difficulties. But, in form, they each followed roughly the same pattern. We assembled in plenary session. All the 10 participating Finance Ministers made opening statements of position. But, before decisions could begin to be taken, the Ministers of the Six, or, to be more exact, the Five, because Luxembourg is represented by Belgium, then said that they wished to meet together and see whether they could report a joint view to us.
These adjournments for the Six to meet together often took a very long time. They had considerable differences to argue out, as we shall have with them if we go in, between ourselves. I remember that one adjournment lasted for no less than 10 hours. What does a British Chancellor of the Exchequer do during these long adjournments? I will tell the House, because there is a certain symbolism to this. What he tends to do is to talk a great deal, and have lunch or dinner, or whatever is covered by the adjournment, with the United States Secretary of the Treasury. This is very 1703 comforting, up to a point, for those two who are not at the meeting. But there is a big difference between the United States Secretary of the Treasury in these circumstances and the British Chancellor of the Exchequer. Both are a little impatient at the holding up of the meeting of the Six, but the United States Secretary of the Treasury tends to be much calmer because he knows that he can live with whatever the Six decide, whereas this is not necessarily the case with the United Kingdom or the British Chancellor of the Exchequer. To a British Chancellor of the Exchequer the decisions are far more crucial, but at present he is equally excluded. I do not wish to see a continuation of the position in which the Six decide, and decide to a vital extent, matters which are crucial to this country, when all that we can do is to have a little chat with the Americans.
I have related this matter at some length because I believe that it is symbolic of a much wider field than monetary problems. It illustrates clearly the problem of our position in the world at the present time. It shows some of the difficulties of the future we should have to face if we remain outside.
§ Sir Derek Walker-Smith (Hertfordshire, East) rose—
§ Sir D. Walker-Smith
But if the right hon. Gentleman is moving off the question of sovereignty—I have followed with fascinated interest his reminiscences of his café and cognac sessions—does he appreciate that we all realise that a debtor nation or anyone who wants to borrow money is in a less advantageous position from the point of view of decisions than a creditor nation? What we are concerned with is the specific derogations from our domestic sovereignty on all the matters covered by the Treaty of Rome. Would the right hon. Gentleman pay regard to that, please?
§ Mr. Jenkins
No, the right hon. and learned Gentleman, as I have often found to be the case, is wrong both on his premises and on his conclusions. The United States position is not different from ours because it is not a debtor 1704 nation. In fact, it is the biggest debit nation in the world at present as far as balance of payments is concerned. This is because of the nature of its continental sovereignty and its independence of Europe. The other matters raised by the right hon. and learned Gentleman are matters which he has argued about for nearly 10 years and are detailed constitutional points. I have not agreed with him in the past and I do not agree with him now. I do not consider that these are major invasions of our sovereignty. But, in any case, the question we all have to ask ourselves is whether we really believe that we can live in the world of today and, still more, of the future on our own, or whether we believe that we can greatly increase our influence and power over decisions which inevitably affect us directly by helping to make those decisions. This is a perfectly clear-cut difference of principle. I know the position of the right hon. and learned Gentleman. But my view is different, and I state it clearly.
I end by considering this whole complex and difficult issue against the background of the world developments that we wish to see. I suppose that the views of none of us will be exactly the same in this respect. But I sum up my own as follows. I want to see the maintenance of Atlantic ties, but upon the basis of a far more equal partnership between America and her European allies. I want to see Germany ever more firmly anchored into the democratic community. I want to see a relaxation of tension between East and West and a balanced reduction of arms in the centre of Europe. I want Europe, as a rich and relatively fortunate continent, to be responsive to the needs of the poorer world. As China takes her full place as the third of the super-Powers, I want to avoid a world in which the super-Powers and no one else decide everything for themselves. I want the age-old rivalry between France and Germany which has so bedevilled Europe for a generation or more to remain firmly buried, but not replaced by an alliance of hostility to ourselves.
We also want the ability to exercise an influence in the world, for good as we hope, perhaps more in keeping with our history than our size. We must all make our judgments, but every one of these 1705 aims will be assisted, in my view, by the enlargement of the Community, just as every one of them is in danger of being impeded if we remain outside.
§ 4.43 p.m.
§ The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home)
We have lived for so long in this House with the question of Britain's entry into the European Economic Community that the form of most of us generally is exposed. The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) has been known for a long time to be a strong protagonist of British entry into the Common Market if acceptable terms could be agreed, and very sensible of the gains to be had in terms of European unity by an enlarged Common Market which included Britain.
Today, the right hon. Gentleman has studied the balance of profit and loss to Britain. As I understand it, he does not maintain that everything in the proposed agreement is perfect. But he has stated in an interesting and thoughtful speech and in the most positive and direct language that the bargain which has been struck is in terms which he could recommend for British entry into the Community.
I want to follow the right hon. Gentleman's example and to say as simply and as shortly as I can why I, too, have concluded through the years that membership of the Community would be advantageous to Britain. I almost add "necessary for Britain", because I am acutely conscious that there are two questions which have to be asked : not only whether we should go in, but what is the prospect for Britain if we stay out. Those two questions have to be asked because, whether we are in or out, the Community goes on.
The right hon. Gentleman dealt comprehensively with the economic terms for entry, and one of the anxieties of those who have been most thoughtful in this House and outside it has been that we might be faced with a subscription for entry so high in the early years as to inhibit our own economic growth. That cost is quantified now at roughly £250 million, £200 million for the direct subscription at the end of five years, plus £50 million for the additional cost of food. I shall not call in aid the half per cent. 1706 growth in the national income which would bring us in £1,100 million, although that is a useful measure.
Here I find myself in fairly close agreement with the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) who said, when winding up the debate last night, that if as a country we are not able by our policies at the end of the transitional period and the corrective period to sustain a rate of growth which will carry a balance of payments charge of that order, we have to resign ourselves to relegation to a different league altogether from the other countries of Europe. I reject such defeatism. I agree with my hon. Friend the Member for Cambridge (Mr. Lane) that in this matter we need to show more self-confidence and less apprehension.
I hasten to assure the right hon. Member for Stechford that my right hon. Friend the Chancellor of the Exchequer will deal with his main questions on Monday. My methods may be a little more slow than those of the right hon. Gentleman. Judging by what has happened in the last six years, if I had been in his position, the results would have been very much better.
In making any assessment of whether we should enter the Community, the first question that we must ask is, what sort of association are we joining? Naturally enough, after we had been rejected for membership at the time of General de Gaulle, a number of people outside this House seemed to feel that the Community existed to apply penalties to its members. In view of that, I think that it is worth quoting from the Preamble to the Treaty, the solemn declaration made by the signatories to the Treaty of Rome which governs their daily practice.
The association exists…to ensure by common action the economic and social progress of their countries by eliminating the barriers which divide Europe … to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favoured regions …".We have at once the desire and intention of the members of the Community to help each other, to be a co-operative society, and the desire also to strengthen the weaker parts of those countries which form the membership of the Community.
1707 I was glad to hear the right hon. Gentleman draw attention to the importance of regional development. I was even more glad to hear the hon. Member for Berwick and East Lothian (Mr. Mackintosh) yesterday giving his colleagues a very well-timed and informative lecture on the value of marginal farming and how it cannot be helped unless one is prepared to pay higher prices to producers or to subsidise it from taxation.
The purposes of the Community which I have just quoted could not be faulted even by the sternest critics of the Common Market. It is a partnership devoted, by treaty, to common endeavour and common interests. How far the aims can be translated into practice and into common benefit depends on the confidence which is bred from the habit of working together. But, even if the aims are impeccable, I think that a prudent person will look at the verdict of the paid-up members after 10 years' experience—a matter touched on by the right hon. Gentleman.
Some hon. Members may have heard the Prime Minister of Italy make a speech at the Mansion House only a short time ago in which he said that at the start the Italians had all the apprehensions which have been expressed by so many of us. But he went on to say :Since making its European choice, my country has been spurred on to a vigorous acceleration of its development.He said that in 12 years their gross national product, at current prices, had increased four times ; that in the 1950s Italy's foreign trade was 10 per cent. of its gross national product and it was now more than 21 per cent., and so on. That, I think, goes some way to answer the question posed by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). It is worth stressing that all the partners in the Community testify to the dynamic effect of membership in stimulating expansion, added wealth, and, what is more, foreign trade.
§ Mr. Donald Stewart (Western Isles) rose—
§ Sir Alec Douglas-Home
The right hon. Member for Stechford called attention to the increase in investment by the Community countries. I would give only 1708 one more statistic which I think is too often ignored. We so often measure the cost and so seldom look at the increased standard of living on the Continent. In 12 years the standard of living on the Continent rose by 76 per cent. Our comparable figure was 39 per cent.
§ Mr. Stewart
How does the right hon. Gentleman take confidence from the details he has been giving, since similar assurances were given to Scotland in 1707 in a treaty to which I think one of his ancestors was a signatory? At that time the population of Scotland was a fifth of the United Kingdom. Now it is a tenth. Is that the future which he wants for the United Kingdom in Europe?
§ Sir Alec Douglas-Home
I hope that the hon. Gentleman will not try to tell a Scottish Borderer, who was fairly well off when he used to steal cattle from England, that he is not better off since the Act of Union. All the existing members of the Community think that they are better off now. In this matter I am bound to say that I prefer an ounce of experience to a ton of theory.
My hon. Friend the Member for Banbury (Mr. Marten) yesterday expressed apprehension about the surrender of sovereignty, a view which is shared by a good many hon. Members in this House. The right hon. Member for Stechford referred to that apprehension just now. I think that the apprehension of the ordinary person is that, against our better judgment, represented by and sometimes emerging from this Parliament, we would be overruled.
First, let me reply to that proposition in terms of Community practice. In 12 years the Communities have shown themselves, both in the Commission and in the Council of Ministers, to be extremely sensitive about the national interests of the partners. That practice has been reinforced by the communiqué issued after the meeting in Paris between my right hon. Friend the Prime Minister and President Pompidou. So long as the Council of Ministers controls the policies of the Communities, no vital interest of any one country can be overruled. Being a member, we shall have complete control over that situation.
§ Mr. Marten rose—1709
§ Sir Alec Douglas-Home
I will give way to my hon. Friend when I have finished on the question of sovereignty. I think that there are many misconceptions about the nature of sovereignty. I contend that there is no absolute doctrine of sovereignty. Sovereignty is concerned with the reality of power and influence.
I will give an example. When we gave independence to the colonies, that was an act of sovereignty and it was irrevocable. I recall that there were some at the time who argued that this was a bad thing to do. There were others who equally held that to create independent countries by an act of sovereignty would add to our international stature in the modern world. It is much too simple to talk about surrender of sovereignty. It is true that an act of sovereignty is certainly not inconsistent with entering a partnership. If it is possible to argue that our national character fitted us to rule, it is equally possible to hold that our national character is even more fitted for a partnership in a community of equals.
At this time and for the future in terms of the reality of power and influence—that is what concerns me about sovereignty—I have no doubt which would be the more effective : it is a Britain with an influential voice in formulating policy, both economic and political, in the world's largest economic entity. It is thus, rather than going it alone, that I believe we gain the ability and strength to safeguard our vital interests by an act of sovereignty.
§ Mr. Marten
I am grateful to my right hon. Friend for giving way. I merely wanted to intervene because he has got me slightly wrong about the views which I expressed yesterday. I was saying that I was looking forward, and the example which my right hon. Friend was quoting was looking backwards and at the present situation. I was basing my case on Chancellor Brandt, who said that Europe must have a European Government, President Pompidou, who said that Europe must have European Ministers, and my right hon. Friend the Prime Minister who said that the British would be the first to press for parliamentary and democratic control. It would not be a question of the Council of Ministers having the veto. But when we get that set-up, the Council of Ministers' veto will not be there any more ; it will be parliamentary and democratic 1710 control of Europe. That is where we shall surrender our sovereignty.
§ Sir Alec Douglas-Home
I do not think that that follows. I have never been able to follow that argument. There is every kind of forecast as to what the political future of Europe may look like. That is true. Chancellor Brandt thinks that it will be federal, and President Pompidou thinks that it will be confederal.
§ Sir Alec Douglas-Home
My hon. Friend asks what I think? I am about to tell him. I think that these labels are and will be meaningless for a very long time. I think, for example, that there is a very strong case for controlling officials by Parliament.
§ Sir Alec Douglas-Home
That Parliament, within a certain area, is competent to deal with certain things ; but national Parliments will control a great deal of the whole for a very long time.
I have never felt that there was a threat in European institutions. Institutions are not set up for fun, even in a Common Market. People set up institutions because there is something to be done which is of common advantage to all. Institutions are usually set up for a particular purpose and to do a particular thing. I do not find that a surrender of sovereignty or a frightening prospect.
I am conscious more than ever, returning to the office which I now hold after 10 years, that it is an almost intolerable handicap to this country that economically we should have to run our foreign policy as we do because we are working on an economic shoestring. When we are considering Britain's economic and trading interests, it is not without significance that the European Economic Community negotiated the Kennedy Round of tariff reductions. It took an economic unit of that strength to win that prize.
My conclusion regarding sovereignty, although I approach it rather differently, is very much the same as that of the right hon. Member for Stechford. I do not believe that we need talk in terms of surrender. If anything, we should talk in terms of sovereignty shared for common purposes.
1711 There has been much talk in recent years of possible alternative groupings. There were once those who canvassed that we should seek economic unity with the United States rather than with Europe. It became clear very soon that there we would indeed lose our national identity and be over-borne by size.
The Americans were not slow to make it plain that they preferred to see us contribute to the unity of Europe rather than seek economic unity with themselves. There remained the Commonwealth, in which we played, and do play, a leading part. The Commonwealth never has been, and never can be, an economic bloc. It never has been, and never can be, a military alliance ; the interests of the modern Commonwealth are too diverse.
There was a time when the whole Commonwealth was an expanded home market on which we based a successful export trade with the aid of preferences which are still of some value. I remember in the late 1950s making a speech as Commonwealth Secretary in another place regarding the degree of erosion of preferences by Commonwealth countries. Then they wished to hasten their own processes of manufacture. I did not then and do not now regret that action. It is an asset to all of us that those Commonwealth countries should equip themselves with an economic base so that they could claim independence in their own right.
But the impact on Britain could not be ignored by British opinion. During the 1960s the Commonwealth market for manufacturers more than doubled but our exports of manufactures to the Commonwealth showed the barest of increases. In 1960 we supplied 29 per cent. of its imports of manufactured goods ; in 1969 that percentage had fallen below 15 per cent. That was its choice. It wanted to find new trading partners from whom to buy, and on the whole it has been a good thing that it should diversify its trade.
Some of the newer Commonwealth countries are already finding it in their interests to give to the Community countries preference over Britain. We shall do everything we can to safeguard our Commonwealth interest but we are entitled to ask the Commonwealth to understand 1712 that we cannot, and it should not ask us to, neglect our own interests. So this decline has taken place and the main argument—I put this frequently on an extended tour of Australia and it was broadly accepted—for Britain's membership of the Community, and it can scarcely be expressed in the rather arid terms of a White Paper, is that a Britain which is weak and in decline is useless to the Commonwealth as an investor, as a purchaser of goods and as an ally in its security.
One of my hon. Friends said that we are not weak and in decline, but we have lost steadily our percentage of Commonwealth trade. We have come down the ladder of world trade. When we are, as I expect we shall be, strong in the Common Market, we shall be able to do many things for the Commonwealth, whereas at the moment we can do only a decreasing amount. That is a position which I do not like and one which will be rectified if we have membership of the Community.
My right hon. and learned Friend the Chancellor of the Duchy of Lancaster dealt with the question of sugar from the West Indies and with New Zealand dairy products. I would put it broadly in this way : we have kept the door open for the West Indian producer and the New Zealand producer of milk products into a market which is likely to prove the richest market in the world. The agreement concerning New Zealand was made possible after my right hon. Friend met President Pompidou, who felt that the agreement for Britain to enter the Community could not be allowed to break down through a dispute over New Zealand.
Yesterday—I will not be political, I promise the right hon. Gentleman—we had a somewhat belated revelation from the right hon. hon. Gentleman the Leader of the Opposition about proposals he put forward for a 20-year or a generation transition period for New Zealand. We had not heard of that until then. The kindest thing I can say about it is that the House took note and passed on—for these very good reasons, that Lord George-Brown and Lord Chalfont and the right hon. Gentlemen most closely connected with the negotiations by the 1713 last Government have all said that they would have recommended the agreement negotiated by my right hon. and learned Friend as one which they could have accepted and would have recommended to their own Cabinet. That I might say is four out of the five right hon. Gentlemen concerned.
§ Mr. Douglas Jay (Battersea, North)
Could the right hon. Gentleman answer one question of fact about New Zealand? Is it the case that at the end of the transitional period, if trading facilities with New Zealand were to continue, the United Kingdom would have to propose this positively and it would be subject to veto by any member of the Community?
§ Sir Alec Douglas-Home
There is no end to the transitional period. That is what my right hon. Friend tried to make clear yesterday. It is a transitional period with a review, with the clearest instructions that provision has to be made for the continuing production of New Zealand milk products, particularly butter. Incidentally, when talking in the Commonwealth context, some hon. Members yesterday talked about the developing nations and the necessity to increase our aid contribution. As to official aid, that of the Community countries has risen by 50 per cent., a much greater percentage than we have been able to achieve.
My conclusion in relation to the Commonwealth is that our heart and our purpose are large enough to embrace Commonwealth interests and membership of the Community and that they are complementary to each other. I would not be here advocating this cause with enthusiasm if I thought that the Market would be exclusive. It cannot be said to be so. The external tariffs are on average lower than ours. It was the Community that negotiated the Kennedy Round for trade liberalisation. When it is expanded, 50 countries of the world, many of them important countries, will have economic associations. The Soviet Union and Eastern Europe are already increasing their trade with the Community, and it is the aim of the Community to carry that process further. The trade of the countries of the Community with the world outside—there was some apprehension that we might be handi- 1714 capped in that respect—has increased at a much faster rate than our own.
There is one more consideration—
§ Mr. Denis Healey (Leeds, East)
Would the right hon. Gentleman allow me? There is one major issue on which he has not yet touched, and that is the well-known and deep concern of the American Government at the discriminatory effect of the Common Market agricultural policy and of the association agreements. The right hon. Gentleman will be aware that the American Secretary of the Treasury in Munich a couple of months ago threatened to reduce America's defence contributions unless in this respect her allies liberalised their trade policies. Could he say whether the Government will work for changes in these aspects of Common Market policy to minimise the risks of a trade war between the blocs?
§ Sir Alec Douglas-Home
We shall, of course, do what we can to see that there is no clash of interest between the Community and the United States. The American Administration have made it quite clear in the last few weeks that, although they have some apprehension, they nevertheless wish success to us becoming members of the Community. It will be a matter after that of setting up machinery to iron out any differences there may be.
There is only one other consideration I wish to advance to the House, and it was opened up yesterday by the right hon. Member for Middlesbrough, East (Mr. Bottomley) in the thoughtful speech which he made. The original impetus to unity in Europe sprang from an instinctive desire to banish war between Europeans. The last two wars were called "world wars", but their origins were in European rivalries.
France and Germany were the first to recognise the signs, and I have said before in the House, and I repeat, that the rapprochement between Germany and France was the most significant event in post-war international politics. On that basis, four more European countries were quick to see the prizes of unity in terms of peace. What else could the Netherlands or Belgium have done? They meet in the Community councils to reconcile differences, to seek the greatest degree of insurance they can and to try to contrive 1715 as best they can for harmonious living. I believe with complete conviction that the presence of Britain in their councils would make that insurance doubly sure
A completely new problem from anything we have known before has arisen. A new class of super-Powers has arrived, and it has arrived to stay. This development has left the middle-Powers of Europe with a choice—either to carry on, each of us, in our traditional ways, or to seek the maximum co-operation so that, acting together, we can seek to influence and steer world events.
Today and in the future our Continent faces difficult and complex decisions. The power of the Soviet Union continues to increase. In prudence, we must expect that the United States, with her many preoccupations, will maintain her nuclear umbrella but make some reduction in the deployment of her ground forces in Europe.
Within the framework of N.A.T.O., therefore, Europe will have to assume greater responsibility for her own security. That is how I see it. It is difficult to foresee exactly what form these councils will take in the N.A.T.O. framework, but when this happens, as it is bound to happen, it is essential that Britain is in, rather than outside, those councils.
This is why, at the end of what I have to say today, I would add a word to its being necessary for Britain to enter the Community. I am now sorely tempted to add the word "essential" in this context. I can develop this theme on other occasions in more detail in the House, but I do not believe that Britain can afford to stay out.
This is a partnership of equals in which Britain can make her mark. The Community will proceed whether or not we like it, and we should be in it to make sure that the voice of Britain is heard by the super-Powers. There is a very important rôle to be played in the future organisation of Europe in respect of the security of this Continent in relation to the activities of the super-Powers. For these reasons I am certain that we should enter the Community. To borrow a phrase from our pioneering days, I believe that pre-eminently this is something about which one can say "Nothing ventured, nothing gained".
§ 5.15 p.m.
§ Mr. Harold Wilson (Huyton)
I ask the leave of the House to make a brief intervention in the debate.
In the heat of the exchanges in the concluding passages of the speech of the right hon. and learned Gentleman the Chancellor of the Duchy of Lancaster last night, I interrupted with words which, after a brief explanation which I owe to him and the House, I would like to withdraw.
The words I used were based on my understanding, incorrect as I now realise, of a message received in my office yesterday from Lord Campbell of Eskan. The noble Lord had, in fact, felt it right to inform me that he had given his permission to the right hon. and learned Gentleman to quote a passage from a letter which he had written.
As the House knows, the noble Lord, in his capacity as Chairman of the Commonwealth Sugar Exporters, makes available information to both the Government and the Opposition on a non-party basis, which helps the whole House. He felt that I should know of what he had authorised the right hon. and learned Gentleman to quote.
The message as it reached me gave a very different impression, and it was accurately summarised in my intervention. I have checked with the noble Lord, and in the light of what he has told me, while those concerned with reporting the message to me acted in good faith—and I take full responsibility for all that occurred—I ask leave to withdraw the words I used to the right hon. and learned Gentleman last night.
§ 5.17 p.m.
§ The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)
May I express to the right hon. Gentleman the Leader of the Opposition my appreciation for what he has said? He did make a serious allegation last night, which I instantly repudiated. However, I am grateful for what I take as a handsome apology from him this afternoon.
§ 5.18 p.m.
§ Mr. R. T. Paget (Northampton)
Towards the end of his speech the Secretary of State for Foreign and Commonwealth Affairs said that if the arrangements of N.A.T.O. have to be reconsidered, we should be there. As I understand it, we are there. France is the one 1717 who is not there. In the Economic Community, France is there and we are not. In the defence community, we are there and France is not. I will return to this subject, which is by the way, later.
As usual, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) made a good speech. However, he feels towards Europe rather in the way the hon. Member for Chelmsford (Mr. St. John-Stevas) feels towards Rome ; it is to him a sort of inspiration and faith rather than something which can be dealt with reasonably.
§ Mr. Norman St. John-Stevas (Chelmsford) rose—
§ Mr. Paget
I am sorry. The hon. Gentleman need not intervene. We have been asked to be brief.
It is for these reasons that I find my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) by far the most convincing of the pro-Market advocates, largely because he puts his case so quietly and reasonably. I was particularly impressed with what he said last night about growth being available to us whether or not we go into Europe. It just depends on having a Government which are prepared to let us grow and do not panic the moment either wages go up or balance of payments begin to turn ; and a Government which, if the balance of payments requires adjustment, are prepared to use currency adjustment at the right time when it is necessary and not consider that this is a prestige matter to which the growth of the country must be sacrificed.
This is particularly important when we face up to the initial stages. In the initial stages we gain over a period an average 8 per cent. tariff advantage in the European market while the Six gain a 12 per cent. advantage in our market. Even if there were not increased expense involved by the added price of food and all the other factors, it certainly looks as though the wins of Europe in our market will be larger than the wins we make in Europe's market. Again, with the movement of capital, even apart from the movement of capital involved in paying for sterling balances, the likelihood is that in the opening stage the movement of capital from us to Europe will be much more than the movement of capital from Europe to us.
1718 Then there is the movement of labour, and I must say that the spectacle of our unemployed migrating for work to Germany is not one of the aspects of the Government's policy of which I think they have most reason to be proud. With all these factors working against us, I have little doubt that Nicky Kaldor and many other economists who approve of our going into Europe are quite right in saying that another devaluation will certainly be necessary. I do not disapprove of that. It is not something that I would find particularly alarming. What I would find alarming would be if the Government proceeded to funk that devaluation and to sacrifice employment and growth here, as has happened on previous occasions. We would then enter Europe as a cripple.
I turn to the political aspect, about which I feel much more strongly ; the economics are more evenly balanced. I do not know that people have realised how big the political change is. It means that for the first time we shall be a country with a written Constitution. Previously, we have had an unwritten Constitution, adjustable to events as they occur and in which we can change every law as and when we think fit.
Now we shall have a series of constitutional laws above us, which we cannot change. As we make laws here we shall have to bear in mind all the time that those laws are subject to review by a court at Brussels which may declare them unconstitutional vis-à-vis the European Constitution, and order us to revoke them. This at least is a very formidable change in the way our society has been organised through generations.
My right hon. Friend, referring to executive actions, spoke of the occasions when the Finance Ministers of the Five went off to consult amongst themselves while he had dinner with the American Secretary of State. If we get into the Community, he will be able to consult those Finance Ministers, but he will be a minority voice inside that consultation just as outside, and he will not have the American Secretary of State to dine with, nor will he be able to find an alternative in America or the rest of the world. This is a very serious limitation.
Let us look at this new written Constitution which we are accepting. It is designed to provide primarily two things. 1719 The first is the free exchange of goods within the Community. The second is protection, particularly for agriculture, of the less efficient aspects of the Community against competition from abroad. This is a pretty rigid Constitution, and its reform requires unanimity.
There must be no distortion in the free exchange of goods. That means that all subsidies are out, including concealed subsidies. Coal or steel produced at a loss price would be regarded by the Community as a concealed subsidy to our exports. Again, penalties are out, if not strictly by the law none the less by its results. If we impose on our manufacturers taxes which are not imposed on the Continent, that will put them in an unfair trading position, and, in practice, we shall be not able to do so.
In practice, redistributional taxation is out. [HON. MEMBERS : "Rubbish."] If we impose redistributional taxation on one group of employers who are free to move where they will in the rest of the area, where such taxes are not imposed, I think that we are a little naïve to expect them to stay here. In practice it will not happen.
The third exclusion is quotas and controls. I take this to mean that Socialism is out. A lot of hon. Members opposite and people outside the House may think that an excellent thing, but I think it was Herbert Morrison who said that priorities were the language of Socialism. [HON. MEMBERS : It was Aneurin Bevan."] In any case, they are out. We are no longer in a position to say that we prefer wheat to champagne. We have to take without discrimination whatever we are offered. Even if hon. Members opposite feel that it is a very good thing that Socialism should be out—
§ Mr. Robert Sheldon (Ashton-under-Lyne)
My hon. and learned Friend's argument would be the strongest adduced in the whole debate if it were true that the ability to redistribute tax and get a greater measure of equality is denied by the prospect of going into the Common Market countries. This is wholly without foundation. Personal taxation can certainly be levied at any rate required, and redistributed at any rate required.
§ Mr. Paget
This is so within the terms of the Constitution : for the reasons I have given, it is not so in practice within the competitive society which it sets up. I do not want to be diverted, but all the literature shows that we have to move on to a common taxation system, and the reasons I have given make that fairly clear—
§ Mr. Harold Lever (Manchester, Cheetham)
My hon. and learned Friend must not say that the treaty says they must move to a common taxation system—
§ Mr. Paget indicated dissent.
§ Mr. Paget
This is perfectly true. I did not say that the treaty said it. I said that all those who were talking and writing about this were saying over and over again that the Community had to move on to a common taxation system. I can find any amount of quotations for that, but I will not do it now.
This seems to involve that within this written Constitution there is room for very little difference between the parties. It means two parties broadly committed to the same fiscal and economic policies. The choice, as indeed has happened in Europe, becomes very limited indeed. At both ends radical opposition becomes unconstitutional, undemocratic. This is a very grave danger.
I do not think that this type of written constitution arrangement, which minimises the differences available and decidable by democratic means and minimises the kind of clash that can occur between parties, is good for us, good for our way of living, good for the kind of life we have here.
My main theme is the question of defence, about which I am most anxious. At Lisbon in 1952—I remember ; I was there—there was a meeting of the N.A.T.O. Chiefs of Staff to decide what was necessary for the defence of Europe. The answer came up : 50 divisions at immediate readiness, covered by a force of at least 4,000 aeroplanes and another 100, or perhaps 130, divisions available at various days ; these forces to be posted 1721 behind the Rhine with advance forces to identify the axis of an advancing force and then to strike from behind the Rhine at that advancing force.
These were the proposals which were put to Europe. They were rejected for two reasons. Europe was not prepared to provide the divisions and Germany was not prepared to provide the battlefields. So a different decision was taken. What is, in effect, a token force was placed on the frontier. It is a force capable of dealing with mere frontier incidents, but primarily a force including American divisions that gives credibility to the American nuclear deterrent.
It has been supremely successful. Never has the frontier of Europe been more secure. It has been secure because the Russians are totally determined not to get into a war with the United States and the United States are fairly determined to ensure that nobody gets into a war with Russia or attacks a satellite on that side.
While there is that confrontation guaranteed by the American deterrent behind it, there is security, but let us not be blinded to how utterly impotent those troops are as a military defence. I worked out with the late Sir Basil Liddell Hart how a campaign would go. If the Russians started with a mere three divisions at last light on a frosty winter's night across the North German plain, they could be in our deployment positions, where our army deploys to defend that frontier, from 12 to 20 hours before our army could get to its deployment positions. They could be on the Rhine by first light. They could fill in with their airborne capacity. By the third day, turning up the Rhine, they could be on the Swiss frontier. All that the N.A.T.O. forces could possibly do would be to try to make their escape into Austria. That is the military situation we are up against. There is no defence at all.
Let us consider that military situation with the Americans subtracted. That is what the French wish. The French have made it very clear that they want to get rid of the Americans. There are many Americans who want to be got rid of. The Americans have been pretty staunch in Vietnam. Heaven knows that they want to get out, but they are sufficiently loyal to their policy and their allies to 1722 try and at least leave a credible successor force.
Let us suppose that the French vainglory about Europe—this 260 million of great size but as helpless as a dinosaur—proceeds to provide the Americans with the excuse for leaving. Remember that there is a new isolationism of the Left in America. In the old days isolationism was the Republican Right. Now it is the Left-wing of the Democrats who are more and more isolationist-minded. There is the risk of the Americans pulling out.
If we go into the Common Market, if we reject the Atlantic and choose Europe, we find ourselves in a Europe which most emphatically on no terms at all can defend itself. Then let us consider what the position is. There are Russians or, rather, the Communists—the Warsaw Pact, facing West Germany. Behind West Germany there are French and Italian allies.
I know that it is sometimes shocking to observe that "the Emperor has no clothes". Think of Italy and France as allies! I cannot think of a war in which Italy has started and ended on the same side. This is not because Italians are not brave men. Many of our escaped prisoners can testify to the enormous courage of Italians. So could almost anybody in Italy on the run ; because all Italy is on the side of anybody on the run and against the Government. The reason why Italy is ineffective as an ally is that Italians hate Italy. It is their temperament. It means that militarily they are totally useless.
The French record is no better. I can remember when we lost I million men on the Somme because the French had mutinied in face of the enemy. I can remember what happened to Czechoslovakia when it relied on a French alliance. We must remember the Czechoslovakia had a French alliance and not a British alliance. I thought that our performance was pretty lamentable, but I do remember the French performance.
In 1940 the great masses of the French were behind Petain. La résistance came when the Germans began to lose. "Our Fleet will not be available to you in war", say the French ; and they walked out of N.A.T.O. What kind of an ally is this? It is suggested that the guarantee of Germany will be something very close to the Prime Minister's heart—a 1723 nuclear agreement between us and the French. I do not think there is any Russian leader of a sufficiently nervous disposition to imagine that the French would consent to use a nuclear bomb and risk the consequences to protect the Germans. It just is not on. This alleged deterrent is totally and utterly incredible.
What ought we to do? I urge the Government, because to me this is far and away the most important thing, to say firmly to the Americans, "We are interested in Atlantic defence. We are not interested in European defence. If you leave Europe, so do we. If you withdraw troops from Europe, we withdraw in similar proportions." If we said that to the Americans, I do not think they would leave. People can be judged only by their records. Their Viet Nam record is such that they will not leave a situation behind them unless it looks viable, or unless at least they can pretend that it look viable. If the British were to say, "We regard it as totally unviable and we are not going to be in it without you but we will be in it with you ", I do not think they would go. But if they did go, how much better to be here with an army here, with an available insular and maritime defence, rather than have one's army in pawn in Europe with allies of that sort and in that position!
We have had to stand a siege in England before. Its preliminary generally has been to lose an army in Europe. If we have to stand a siege again I would rather miss out the preliminary. I believe that if the Americans go, this defence is hopeless, that this idea of a Europe existing as a third independent force is an unreality, and that we ought to do all in our power to kill that unreality and say that we shall stand and work out our ideas as an Atlantic force. This is what we must do.
It is true that we have been losing trade in this area. So long as we were flirting with Europe, of course they were making other arrangements, but we can build up. Australia and other countries, when we are trying to leave them out, are looking for trade elsewhere. I believe that we can trade with Europe and with the rest of the world. We can look after our own, and from the defence point of view we are incomparably safer, and Europe is incomparably safer, if we stand in our position as an Atlantic Power.
§ 5.42 p.m.
§ Mr. John Boyd-Carpenter (Kingston-upon-Thames)
The hon. and learned Member for Northampton (Mr. Paget), whatever one may think of his views, never lacks originality. As a contribution to strategic thinking, his doctrine of the defensibility of this island in face of a Europe whose coasts were wholly enemy occupied carries on that tradition of originality. He would not, however, find many people to go along with him. His further concept that the Americans do not mean what they say and that they are more likely to remain in Europe if we get out has all the virtues of paradox.
I thought that the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) made an extremely fine and, in the circumstances, courageous speech, and I say that with the more objectivity because I myself do not go anything like as far as he does in the European direction. I am one of those, to whom the right hon. Gentleman the Leader of the Liberal Party referred yesterday, who share collective responsibility for the attempt to get into Europe in the early 1960s when, as the House will remember, my right hon. Friend the present Prime Minister, after negotiations conducted with matchless skill, had achieved agreement, the effects of which were nullified as a result of a curious exhibition of the love-hate relationship to this country in which the late General de Gaulle used to indulge. I am utterly unrepentant of my modest share in that responsibility, for I am convinced that had General de Gaulle not so intervened and had we entered the Community then we would be a great deal better off, more prosperous and with a higher standard of life than we have today.
It is impossible to look at what has happened in the Six since that date and not be forced, whether one likes it or not, to that conclusion. If any of my hon. Friends do see instead an obvious explanation of our relative lack of progress, I would point out that some of the Six had Socialist Governments, too. Nevertheless I do not regard that as conclusive to this argument.
Time, and the Community, has gone on. Some of the developments, like the common agricultural policy, have undoubtedly been in wrong directions, as I think even the most fervent Europeans 1725 will agree. I believe it is part of the tragedy that had we been in, and allowed our influence to be exercised, we could have prevented some of these excesses. The problem now—and it is difficult—is on of weighing strong pro and con considerations. I think that the view I express is held by many outside this House. One has to balance very strong counterbalancing considerations in order to come to a reasonable and fair decision. The trouble is that most of these considerations are imponderables. The other trouble is that we all know from experience that none of these things ever turns out as one expects them to do, and indeed, as the old proverb says, nothing is ever quite so good or quite so bad as it appeared at first sight.
I think this is a difficult situation in which to come to a final decision. The hon. and learned Gentleman has made his decision, and as he spoke I could not help reflecting on some words of, I think, Mr. A. J. Balfour who said "I wish I could be as certain of anything as the hon. and learned Gentleman is of everything."
The right hon. Member for Stechford—and here again I follow him—said that this was not a debate for party political points. As my right hon. Friend said, it is an exploratory and expository one. I want to follow that line by asking a number of specific questions which I hope my right hon. Friend the Secretary of State who is to wind up may be able to answer tonight, and if he is unable, I hope that some other of my right hon. Friends may be able to deal with them.
We begin with a point made by the right hon. Member for Stechford. The White Paper is clear and emphatic about the Government's pledge to retirement pensioners and social security beneficiaries who may be adversely affected by price changes as a result of British entry. With respect, that pledge is satisfactory so far as it goes but it does not cover anything like all the people who could be vulnerable to this situation. We all meet in our constituencies a number of reasonable, moderate-minded people who say "Entry probably is a good thing for industry and for the city. It is good perhaps for the active, the energetic and the working. But what will it mean to me?"— "me" being a retired man living on his savings. I hope that the Government, 1726 before the debate ends, will be able to help many of us by expanding a certain amount what is said in paragraph 90 of the White Paper.
In addition to the retirement pensioners and social security beneficiaries, there are the public service pensioners, a very large number of them, many on quite small pensions, and they are immensely vulnerable to price changes. Allied to them are the railway superannuitants—a considerable and admirable section of our society. Then—and I appreciate that this is much more difficult to deal with, and it is up to the Government to have some ideas on how to deal with it—there are those people who subsist largely on private pensions and savings. There are millions in this country who will accept that it may be in the interests of this country to join but are genuinely and sincerely apprehensive about the immediate impact on themselves of our joining. We are told that we are likely to get a great expansion in wealth and prosperity as a result of joining this market. Very well. If we do that, are we not under a moral obligation to use a substantial proportion of that additional wealth to help those who, for perfectly good reasons, cannot directly profit?
I do not know what the increase in prices may be. It may well be that recent changes will have very much reduced the impact—again, I do not know—but it is accepted that there will be some such impact. There is a real fear among many people about this, and I press the Government to give us, before the debate ends, some assurance going beyond the categories covered in paragraph 90 and covering all those different sections of the community who will not be able to take advantage of the chances which entry may well give others to increase their earnings and so more than offset the rise in prices.
Another area of concern to those who, like myself, are honestly trying to balance one consideration against another, is the effect upon our relations with the old Commonwealth. I say "the old Commonwealth" deliberately. My right hon. and learned Friend has worked very effectively, in my view, to assist the interests of the new Commonwealth as a whole, and I believe that many of those countries stand to gain eventually. I am thinking now of Canada, Australia and 1727 New Zealand. They are our old friends, friends who fought with us in two wars. My right hon. and learned Friend is fond of quoting couplets. Were he present at this moment, I should quote this one to him, but, in his absence, I give it to the House nevertheless :The friends thou hast, and their adoption tried,Grapple them to thy soul with hoops of steel.We all know that, for good reasons, our share of mutual trade has diminished, and they have themselves moved into the orbit of the United States or Japan. On the other hand, if we are to take a step which may well in some measure accelerate that process, it is again up to the Government to try to act in other ways to show how much we value the links with them.
I make two specific suggestions to that end. Under the rules of the European Economic Community, we are to have free movement of capital within the Community. I hope that the Government will at that time, if not before, abolish the so-called voluntary restriction on investment in the developed countries of the sterling area. It is a self-imposed restriction which, I believe, has denied us much opportunity to share in the growing wealth of Australia—we do ourselves harm in that way—but to have a situation in which there was free movement of capital inside the Community, with ourselves as members of it, would make it much more difficult vis-à-vis the old Commonwealth countries to maintain that restriction. I hope that it will go.
I come next to the much more important and more difficult question of the free movement of persons. The Community rule is to permit, subject to certain qualifications, the free movement of labour. There is at this moment going through another place an Immigration Bill—not, perhaps, particularly fortunate in its origins—which will have the effect, if passed into law, of making an Australian, unless he has a parent born in this country, a person subject to having to apply for a labour permit if he wishes to work here and having to register with the police like an alien if he comes.
I am sure that a great deal of opinion in this country would be most unhappy if, for example, Germans, whom we fought not so long ago, could come here freely 1728 and discrimination were exercised against Australians who, after all, fought on our side, and fought on our side while others of our future partners in the Six were either fighting against us or were not, perhaps, being very helpful in other directions.
There is a way out if the Home Secretary could be persuaded to take it. The countries of the old Commonwealth about which I am talking treat our emigrants to them with particular generosity. Indeed, some of them subsidise British emigrants. They admit them freely. If the Home Secretary would accept the idea of taking powers to make reciprocal agreements with such countries to permit the free movement of their migrants here in time to coincide with the free movement of labour from Europe, we should get away from what many of us would regard as an awkward and embarrassing dilemma.
This is one of the points which I hope the Government will consider when we go in. I say "when we go in" because I believe that, whatever views one may take, we shall go in ; but when we go in we should not put ourselves in the unhappy position of treating the Australian, the New Zealander and the Canadian as an alien while the German, the Italian and the Frenchman comes here as of right.
I come now to the question of New Zealand. The right hon. Gentleman the Leader of the Opposition spent a good deal of time on this yesterday afternoon, as did my right hon. and learned Friend yesterday evening. I confess that I am still—no doubt, it is my fault—far from clear on one point, and it is a point which, I am sure, my right hon. Friend the Secretary of State for Trade and Industry will be able to clear up for me. We know the position over the five-year transitional period. We are assured that in the third year a review would take place to secure continuance of the imports of New Zealand butter. So much is clear.
What is not clear is the fall-back position in the event of agreement not being reached. If we on behalf of New Zealand and the Six on behalf of their farmers do not come to an agreement, what happens? I put that simple question to my right hon. Friend. I suppose that there are two or three conceivable 1729 outcomes. One outcome, which would be perfectly satisfactory, might be that we should carry on with the 1977 figures until agreement was reached. Another might be that we should have no guaranteed entry until agreement was reached. It might be the other way. One does not know.
I am not anticipating disagreement. I feel that my right hon. and learned Friend's argument on this point, to the effect that there is a genuine wish in Europe to come to agreement, is probably valid. But no one will know better than my right hon. Friend the Secretary of State how a background understanding of what happens in default of agreement affects the course of negotiation. If one knows that if there is failure to reach agreement one gets nothing, one is inclined to make a great many more concessions than one would if one had the knowledge that in default of agreement one got a lot. No one knows that better than a former director-general of the C.B.I. Therefore, I ask my right hon. Friend—obviously, this must have been thought out before in these complex negotiations—to tell us what happens in default of agreement as a result of the third-year review.
This question of New Zealand is crucial for some of us. My right hon. and learned Friend knows that I have taken the point of New Zealand's position on, I think, almost every statement which he has made after each round of negotiations. As one who believes that, on balance, it is no doubt in our economic interest to go into Europe, I can only say that it would be a matter of the greatest embarrassment if we were to do it on a basis which ruined our New Zealand partner. I do not believe that that is the Government's intention. I believe that my right hon. and learned Friend has taken great care and trouble on the matter. I know that the New Zealand Government, if not the New Zealand Opposition, are satisfied with the position. I add in parenthesis : what Opposition within a few weeks of an election would ever approve any agreement made by a Government?
§ Mr. Boyd-Carpenter
That will remain to be seen. I hope that the hon. Gentle- 1730 man will not divert me from the point which I am putting, because it is of great importance, I believe for all of us. What is the negotiating position in default of agreement?
Now, one or two other brief questions. Paragraph 157 of the White Paper tells us that it is provided that our coal and steel industries may continue as at present, provided that there is no subsidisation. This is within my right hon. Friend's particular sphere of responsibility, and I want him to tell us whether that ban on subsidisation prevents these industries in future from raising their capital with Government guarantee at Government rates. Is that subsidisation under the terms of the agreement?
Finally, will my right hon. Friend be good enough to elucidate a little more the provisions in respect of the Community budget? We know the figures with admirable precision up to 1977 or 1978. Cannot my right hon. Friend give us an indication of what the figures are likely to be beyond that? After all, we are trying to weigh and balance arguments for and arguments aginst. The sheer cost of our contribution is a very material factor. Cannot we be told a little more about it? Can we also be told whether, once we have joined, we shall have some authority in restraining the growth of expenditure of the Community? It is the concern of many of us in the House to restrain the growth of expenditure by the British Government. Will our representatives in Brussels have an effective voice in restraining the growth of expenditure there, much of which is not expenditure we would approve of and much of which does not come anywhere near this country?
§ Mr. Rippon
We would certainly have a full say in the budget. That is one of the reasons why it is difficult to forecast beyond 1977, when the size and shape of the budget will change very materially. We shall have quite a say in how that budget is built up and what its size is.
§ Mr. Boyd-Carpenter
That is reassuring up to a point. [Interruption.] I was not meaning to be ironical ; I think that it is reassuring up to a point. But I hope that before the debate is over we can be given an idea, even in the broadest 1731 terms, of how the £300 million gross, £200 million net, the highest figure in the White Paper, is likely to rise, at any rate in the years immediately following that.
I have one further point. Whether we agree with entry into the Community or not, whether we think that the terms are good enough or not, we have still at the end of the day—and the end of the day for this purpose means October—to come to a decision respecting our relationship with Europe, whether on this basis or any other. There it is. We cannot, like Orientals, wish it into non-being. It adjoins us closely. What is more, history and geography have inextricably entangled us in it and its affairs.
When I was born, Europe, under three emperors and a dozen kings, was the heart and centre—indeed, the master—of the world. Then, by sheer folly, it blundered into ruin and confusion, and the blood of the best of a generation, the generation of Raymond Asquith and Rupert Brooke, soddened the mud of Flanders. My own youth and that of many of us was overshadowed by the ever-darkening storm clouds of Teutonic aggression. Before they could be dispersed the better part of another generation had to die. The ghosts of the past and the hopes of the future impose a duty on us to secure that that shall not happen again.
§ 6.4 p.m.
§ Mr. Patrick Gordon Walker (Leyton)
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) made a speech which held the attention of the House. He very frankly put before us the balance of considerations in his mind. I had a feeling at some points that he wished that he were like the Oriental who could wish Europe into non-being. But we must face the question. He also put some trenchant and important questions to the Government, the answers to which we all await. I do not agree with all the ways in which he put his questions, but a number of them were very important questions.
I was one of those who were involved in the critical discussions and the decisions of the Cabinet leading to the 1967 application for membership of the Community. 1732 I have taken the opportunity to refresh my memory by consulting again the relevant Cabinet papers. The talks held by my right hon. Friend the Leader of the Opposition and my noble Friend, Lord George-Brown, in the capitals of the Six were not negotiations but exploratory, probing talks, to assess what chances there were of entry on reasonable conditions. Many preliminary points were put forward by both sides—the common agricultural policy, capital movement and especially New Zealand. But there was no question at that stage of the acceptance or rejection of any proposition put forward by us or anyone else in those talks.
The talks proved extremely valuable in helping the Cabinet to make up its mind to apply for membership, perhaps particularly the conclusion that so long as we insisted on it we could hope that a reasonable settlement for New Zealand would emerge. In my view, that played an important part in shaping the mind of the Cabinet.
Each of us who was involved must make his own judgment as best he may on that Cabinet decision. I feel bound by the decision to which I was a party to apply for membership on the basis of acceptance of the Treaty of Rome and a broad acceptance of the common agricultural policy. In light of all the discussions we had then and the decisions we came to, I feel that the present terms are acceptable.
I understand and respect the views and feelings of those who are opposed to entry. I agree with the right hon. Member for Kingston-upon-Thames that it is a very challenging, very difficult decision on which opinions have changed over 10 years, including my own. But it has been a difficult decision for any country. It was a very difficult decision for each of the Six at the moment of entry. Socialists and others voiced all the same doubts expressed here, and some expressed by the right hon. Gentleman. Today all those doubts in the Six have disappeared. No political party in Europe would now vote against membership, not even the Communist parties, who were originally bitterly opposed to the entry of their own countries into the Common Market.
The attitude and experience of two member nations in particular has a special 1733 significance for us. One is Italy. If any country is peripheral to Europe it is Italy. If any country seemed exposed to the danger of becoming the Northern Ireland of Europe, owing to economic development in the centre of the Common Market, it was Italy. For those very reasons, many of the doubts we hear today were expressed in Italy, but since membership Italy has experienced an economic miracle and has had a growth rate faster than ours.
The second country is Belgium, in many ways the one most like Britain. For 10 years before entering the Common Market Belgium had a low growth rate, about the same as ours, over much too long a period, and had a fairly high rate of unemployment. Since membership, the rate of economic growth in Belgium has risen from 29 per cent. to 4.7 per cent. and Belgium has full employment.
The adverse cost of British entry—there would be one—would be wiped out and turned into net advantage if there were an increase in the economic growth in Britain less than there has been in Italy and in Belgium. I have not so low an opinion of my country as to think that we cannot bear ourselves at least as well as Italy and Belgium.
The economic and financial issues are extremely important, but the decision of many people who have a view for or against entry, or who are in doubt, basically turns on political considerations. One of the great turning points for me was the withdrawal from east of Suez. My attitude to the Common Market was changed by that, among a number of other considerations. I became convinced that Britain thereafter needed a new national rôle, one of importance in itself, one that would tax our capacity, one in which we could take pride. I came to the conclusion that such a rôle could arise only if we were part of the Community.
Britain is wanted by the Community, especially by the Social Democrats, who know that our help—the help of a country with a great Labour Party like ours—would make social democracy into a major force in Europe. In the Common Market, Britain would play a key rôle. It would help to a considerable extent—and this is the answer to some of the 1734 questions raised by the hon. Member for Kingston-upon-Thames—to shape the future development of the Common Market, political, economical, budgetary and so on. It would help to keep a much better balance between the nations within the Common Market. I believe that we in Europe would once again be able to play, and only through this means, a part in the world that is in keeping with our history. Whatever may be said at the moment, I have no doubt that English will become the prime language of Europe.
I wish that it had been a Labour Government who had negotiated our way into the Community. I agree with the right hon. Gentleman about the problems of the people who are going to be hit by the impact effect of entry upon their standard of living. I have no doubt that, with a Labour Government, we would be much better assured of proper safeguards for all those sections of our society who might suffer from the initial impact. At the same time, I rejoice to think that it will be a Labour Government who will be conducting Britain's affairs in the Common Market long before the end of the transitional period.
§ 6.12 p.m.
§ Mr. Norman St. John-Stevas (Chelmsford)
This has been a most interesting debate and I think that the high standard of yesterday has been more than maintained today, at any rate up to this point. It is always a privilege to follow the right hon. Gentleman the Member for Leyton (Mr. Gordon Walker), who has cast further light upon the negotiations and who has thrown his own very considerable weight on to the side of the argument for accepting the terms. I would only differ from him on one point. I do not think that Italy is quite as peripheral as he makes out. It may be that not all roads lead to Rome, but some roads do and some of us look upon Rome—pre-Christian Rome, I should point out—Athens, and Jerusalem as the matrices of our civilisation.
I want also to say a word about the speech of the right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins), and I am sorry that he is not here to hear it. But perhaps it is just as well, because I am going to compliment him and that is unlikely to do him 1735 any good in this world, and I cannot guarantee that it will help him much in the next. But I must say this—that in his speech today he has shown that his honour and integrity in this matter of our application to join the Community has been matched only by his intellectual grasp of the extraordinarily complicated problems involved.
I want also to say a word about the opening remark of the hon. and learned Member for Northampton (Mr. Paget), who compared the attitude of my right hon. Friend the Foreign Secretary towards the Community and my attitude towards Rome as sources of faith and inspiration. I remind him of what St. Thomas Aquinas said in his "Summa Theologica", not every volume of which the hon. and learned Gentleman probably takes with him on his sorties into the hunting field. St. Thomas points out that true faith is built upon reason, and the faith of my right hon. Friend and of myself in the Community while it may be inspirational in the way we express it is wholly rational in its base. Before I leave the hon. and learned Gentleman, as he has left us, I must congratulate him on his ingenuity, because it really does take ingenuity to take the example of Munich to prove our moral superiority to the French. I think that the hon. Gentleman would be a useful man to have near one in a tight corner.
Some of the speeches in the debate opposing entry have, I think, been rather depressing. Even the natural buoyancy of the hon. Lady the Member for Wolverhampton, North-East (Mrs. René Short) seemed to have left her. She sounded a note of defensiveness and defeatism. I wish that we could have heard more, not of the necessity for safeguards, but of the opportunities which lie now within our grasp.
§ Mr. John Mendelson (Penistone)
The hon. Gentleman realises, knowing my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) very well, as I know he does, that he is only getting away with this statement about her being on the defensive because she is not present in the Chamber.
§ Mr. St. John-Stevas
I agree—I am maximising my opportunities.
1736 I think that all the speeches we have heard against the application have had a certain note of unreality about them, because they were dealing not with the Community as it is but as its critics think it to be. I think that my right hon. Friend the Prime Minister put his finger on this difficulty when he said that it was a difference of standpoint, that we are on the outside, as it were, looking in, and that we would see it differently were we on the inside looking out. What one needs in this respect is some kind of what one might call effective illumination. One can rationally grasp a factual situation, but the truth, as it were, the idea, only becomes alive and seizes hold of one when one has experienced it for oneself. That is our position in regard to the Community. Until we are inside the Community, we shall not be able to see it clearly for what it is—an association of people coming together in friendship to help each other and not a gaggle of enemies trying to do each other down.
I want to say a word about the speech of the right hon. Gentleman the Leader of the Opposition yesterday. I do not want to say too much about it because I agree with the right hon. Member for Stechford that it would be wrong to inject any element of party rancour into this debate. But one cannot pass over in complete silence that speech, which was made as a major contribution to the clarification of the nation's mind on the issue. I must express disappointment, rather than anger, because I felt his speech to fall far below the level which events require. Those of us who supported the Labour Government in the day of their application, both with our voices and with our votes in the Lobby, are, I think, entitled to express a feeling of disappointment that that has not been reciprocated on this occasion.
Of course I accept that the right hon. Gentleman is sincere, and if he says that these are terms which he would not have accepted, one must accept his statement. But sincerity is not enough in these matters. We must look beyond the subjective to the objective, and must look at the facts. He laid great stress upon the situation of New Zealand and he quoted and told us how the negotiations went forward with regard to New Zealand. I thought that there was, perhaps, a slightly excessive interest in his own speeches and actions, and no doubt there will be other 1737 interpretations. We have had the authorised version ; doubtless Lord George-Brown will give us the revised standard version in due time, and the apocrypha will follow, as my hon. Friend the Member for Woking (Mr. Onslow) says. There was a note of obsessive self-justification in the Leader of the Opposition's contribution which made it impossible for him to assess the situation objectively.
One is tempted to ask, "So what?". Even if every detail, as recounted by the Leader of the Opposition, can be borne out by the record, the effective fact is that the New Zealand Government have accepted these terms as satisfactory. That is the operating factor—not who said what to whom on which occasion.
My third point in relation to the Leader of the Opposition's attitude concerns his speech in the Central Hall on Saturday, when reference was made to a European nuclear deterrent, with a mention of Germany and an implication about Germany's finger being on the nuclear trigger. That was the cue which was taken up by Mr. Jack Jones, the Secretary of the Transport and General Workers' Union—
§ Mr. St. John-Stevas
I do not think it is of paramount importance who sang first in this duet. I speak subject to correction on the exact time sequence which, as I say, is peripheral to the issue. There is a point of real substance here that was underlined by those two speeches. One of the most unpleasant facts of post-war British life was a pervasive anti-German feeling, which not even the visit of the Queen to Germany could entirely exorcise in this country. It was got rid of by the coming to power in Germany of Herr Willy Brandt. It is ironical to reflect that the man who has destroyed that legacy of Anglo-German hostility is a Social Democrat who today is sundered so far on foreign policy from the Leader of the Opposition here. Whatever else may be said during this debate, no one should try to capitalise on anti-German sentiment, because by doing so they will do harm to the nation, harm to the European cause and a major disservice to the maintenance of world peace.
I want to say a word about my own position on the Common Market. I cannot 1738 pretend to be totally unbiased in this respect. I have, after all, for a quarter of a century worked for the European movement. I know I may not look as old as that, but I am well preserved. One of the formative experiences of my youth was as a schoolboy just after the war going to Strasbourg to see the beginnings taking shape of a European union.
Of course I wanted these negotiations to succeed—and I am delighted that they have succeeded—but not at any price, nor on any terms. I, too, had my sticking places as other hon. Members have had ; not on the balance of payments, because no one understands the balance of payments, least of all the Treasury. It is the great Whitehall mystery to which no solution has ever been found. Nor was my sticking place sterling, because I think a silver calf is in no way preferable to a golden calf. But the Commonwealth did concern me, and my sticking points were on New Zealand and on the Commonwealth sugar countries. They were sticking points because what was involved was much more than quantity ; there was the question of honour on our part, and on the other the test question of the attitude, liberality and good faith of the Community to the under-developed countries of the world.
Those questions have both been satisfactorily resolved. I say that for two reasons ; first, because the agreements in both cases are to be continuing and we shall be there to ensure that good faith is kept, and, secondly, because these countries, who after all are the countries most immediately concerned, have themselves accepted the arrangements as satisfactory.
Had that not been so, we should have been placed in an absurd position where the interests of a nation of 50 million would have had to be subordinated to the interests of a nation of 3 million at the other side of the world and a handful of poverty-stricken sugar producing countries. There would have been no escape from that dilemma, and I am thankful that the negotiations were so conducted that we did not have to make that exceedingly painful choice.
There are some who are opposed to the Community as being a rich man's inward-looking club, but what are the facts? They are the aid programme of the Community which is so much larger 1739 than our own ; the liberal trade policy of the Community which has been adopted ; the generalised preference system for manufactured goods from the third world which has been afforded ; and the 50 countries mentioned by the Foreign Secretary who will be associated with the enlarged Community if all goes well. With those facts, what sense does it make to talk about an isolated inward-looking group? It is not only absurd, it is almost impertinent of us to say we are joining the Community to make it outward-looking. It is at least as likely that it will have that effect upon us.
I come, finally, to the basic reason why I am pro-European. I suppose that we all have different fundamental reasons for our attitudes. I have searched my mind to find what it is ultimately that makes me pro-European, and it is because I am pro-British. In one sense my Europeanism is based on the paradox of my being an unredeemed, old-fashioned, English nationalist. It is only within a wider European union that British interests, both economic and political, can be safeguarded in today's world. No economic strength, no foreign policy : no integration, no successful defence policy : no pooling of resources, no influence in the world. It is influence in the world we want and are right to want, although not in the sense of a lust for power.
I believe it was Sir Winston Churchill who said that to desire power to lord it over others is rightly regarded as base. The power to serve others out of the accumulated experience of our history and our achievements is quite another matter. To seek power and influence, to use it for good, to strengthen the peace and stability of the world, is an objective which is far from being ignoble. I agree so much with the Foreign Secretary when, in a speech outside the Chamber on our foreign policy, he said that the purpose of British foreign policy was to raise our power, prestige and influence to the highest possible level. In this situation, nothing would do more to lower it than to refuse this opportunity which we are being offered. The one thing we cannot do is to go back again to the beginning as though nothing had happened. The negotiations, as they have proceeded, have created an order of reality of their own which we 1740 must take into account. If we were now, through a failure of nerve, to fumble and falter at the gates of Europe, it would be the end of Britain's influence as a leading Power in the world.
So it is Britain of which we must think first, as is right and proper in this Parliament of the British people. But patriotism is a poor thing if it degenerates into a merely self-centred nationalism. We must see the interests of the British people in the wider setting of the interests of the European peoples as a whole and we must always remember, when deciding what to do at the end of this debate, that European civilisation, with all its faults and shortcomings, is the finest civilisation that the world has so far seen.
We are, after all, bound together by a shared culture. We are joined by a shared religion. We are linked together by the shared follies and mistakes and the self-destructiveness of the past. I see this time, as we enter the last quarter of the 20th century, as a period of coming together, just as the first part of the century was a period of falling and tearing apart, a moving reference to which was made by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). We come together to preserve what we have, namely, the traditions of European civility and civilisation—not to brood over them as though they were a miser's hoard, but to preserve and to use them for the good of the whole of mankind.
§ 6.32 p.m.
§ Mr. Douglas Jay (Battersea, North)
I did not intend to say anything about the decisions taken by the Cabinet in 1967, but what my right hon. Friend the Member for Leyton (Mr. Gordon Walker) said forces me to say this. At no time when I was a member of that Cabinet, up to the end of August 1967, did it take any decision to accept the entire common agricultural policy.
I want to take a rather closer look at the terms in the White Paper than did the hon. Member for Chelmsford (Mr. St. John-Stevas). The Government have now accepted the whole Rome Treaty and, after a transition which matters little, the whole common agricultural policy, the whole structure of high food prices in the E.E.C. and the so-called financial 1741 regulations which support it. In the White Paper the Government made a rather nebulous political case ; but they also purport to make an economic case, and on this purported economic case rests most of the political argument. For instance, in paragraph 56 the Government say that they areconfident that membership of the enlarged Community will lead to much improved efficiency and productivity in British industry, with a higher rate of investment and a faster growth of real wages".But there is not a shred of evidence for believing that in the facts, in the White Paper, or in the Prime Minister's speech yesterday. But if this is untrue virtually the whole of the rest of the argument falls to the ground.
Nobody can seriously deny that the long term effects on the British balance of payments are crucial to this choice. What has clearly weakened this country since the war and held down its economic growth has been its chronic balance of payments deficits. What has given great political influence in the post-war world, first to the United States and later to Germany and Japan, has been their strong surpluses. In face of this undeniable fact, I think that the most regrettable thing about the White Paper is the Government's statement that they do notbelieve that the overall response of British industry to membership can be quantified in terms of its effect upon the balance of trade".But how, with any shred of conviction, can they go on in the next sentence to say that they areconfident that this effect will be positive and substantial"?It is extraordinary that a Government White Paper should rest on such a frivolous argument.
Let the House, if not the Government, look at the real facts. First, the effect on this country of joining the E.E.C. is bound to be totally different from the effect on the Six, for the following reasons. Before joining, the Six were already following dear food policies and did not have to force up their living costs and their industrial costs as a result. Secondly, they had not already created a free or semi-free trade area, as we had already done in the case of E.F.T.A. and the Commonwealth, which they would have to sacrifice. Thirdly, they were already doing a major 1742 part of their trade with one another, whereas we are doing twice as much trade with E.F.T.A. and the Commonwealth preference area together as we are with the E.E.C. Fourthly, the Kennedy Round had not then, in 1958, reduced the tariffs round the Six to the present low level of 7½ or 8 per cent.
Let us also be clear about this. It is not true that real G.N. P. is higher in any of the Six today, except Western Germany, than it is in the United Kingdom. No reputable international comparisons of real standards of living have been made since 1964, and these can only be approximately brought up to date as far as 1968. They show that the United Kingdom's real income per head in that year was certainly lower than that of Germany, about the same as that of France and higher than that of Holland, Belgium and Italy. A comparison of real wages on the latest figures available shows the same thing, even if we assume the cost of living to be, on average, only 10 per cent. higher in the Six than it is here. Real wages per hour are higher in Western Germany than they are here, rather lower in Holland and Belgium, and much lower in France and Italy.
There is no evidence that growth in the Six has been increased by signing the Rome Treaty. Last November the National Institute Review found that it had not been, and the fact remains that annual growth in the Six has been lower since the Rome Treaty was signed. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) did not mention this fact today, and he did not mention that while trade within the Six has naturally greatly increased since the Rome Treaty was signed, their share of exports to the rest of the world has to some extent declined. It is misleading to mention one fact and not the other.
There is one additional outstanding fact which emerges from the White Paper ; namely, the Government's admission that the main effect of our joining the E.E.C. on these terms would be to lower real wages in this country. Paragraph 88 of the White Paper says that retail food prices would rise by 16 per cent. over the six years transition on top of the rise engineered by levies in advance of that—nearly 20 per cent. overall. The 1743 Government say in paragraph 43 of the White Paper—some hon. Members may not have noticed it—thatThe influence on wage movements of the increase in the cost of living is not expected to have any significant effect on the costs of industry …That means, in plainer English, that the Government and the C.B.I, are assuming a major rise in living costs and no rise in money wages as a result of entry. That means a lasting fall in the living standards of most of the British people. It cannot mean anything else. That is true even if we assume a rise of only 20 per cent. in retail food prices.
But if we look at the real facts, namely, the temporary nature of the present rise in world food prices due to exceptional crop failures in the United States and New Zealand, and the immense possibilities of the so-called Green Revolution in grain production in Asia, then I believe, with Sir John Winnifrith, the former Permanent Secretary to the Ministry of Agriculture, Fisheries and Food, whose competence Ministers will not question, that the rise in food prices in future, the rise forced upon us by joining the E.E.C., is more likely to be 50 per cent., and that the gap between E.E.C. and world prices is more likely to widen than to narrow. The F.A.O.'s official forecast confirms that view. If that is true, the advantage to the United Kingdom of staying out will be far greater in the future even than it is now.
But even assuming the Government's suspect estimate of future food prices to be correct, let us look at the crux of the whole matter—the long-term effects on the balance of payments of the United Kingdom. The Government dare not give the facts in the White Paper, but Sir Con O'Neill was rather more candid. Speaking in Brussels on 12th January he said :Britain not only has to consider its budgetary contribution, but also the increased cost of agricultural imports from the Six, the loss of certain preferences for its industrial goods, and the effect of the increased cost of living on the general level of industrial costs.Look first at the higher cost of agricultural imports from the Six. The White Paper's estimate of an extra £50 million a year by the end of the transitional period is not taken seriously by any competent 1744 expert. Sir John Winnifrith describes it as "utterly ludicrous". As total British imports of food and feeding-stuffs in 1970 were £1,850 million, and as a major proportion of them is to be switched to dearer food sources, and as the main commodities—grain, meat, sugar and dairy produce—would rise in price by 50 per cent. or more—in some cases 100 per cent.—it seems that the total increase cannot reasonably be put at less than £200 million a year, and even that assumes that the British public will eat a good deal less food. Perhaps the Minister will tell us whether he denies that the White Paper's calculations are based on the assumption that the British public will eat less and, to some extent, worse food.
I come next to the budgetary contribution. The White Paper makes this come out at only a net £200 million a year. It does that by closing the accounts artificially in 1977, by assuming a highly improbable return payment of £100 million, and pretending that the total spending from the E.E.C. budget will rise far slower in the future than it has in the past. I am all for an ounce of experience rather than a ton of theory, as the Foreign Secretary said.
The figure of £200 million is flagrantly misleading, because after 1979 the special limits on our contribution are removed and we could be paying—and this is according to the Government's own July 1970 estimate—between 25 per cent. and 30 per cent. of a budget of £2,000 million or more. I believe that a reasonable middle estimate by 1980 would be a gross figure of £500 million and a net of perhaps £400 million. That means total agricultural costs, at a start, to the balance of payments of £600 million.
Next, Sir Con O'Neill mentioned the effect of losing certain preferences for industrial goods. We should, of course, lose free-entry or preference in the whole of E.F.T.A., and both in the whole Commonwealth preference area, to which we now export twice as much—or perhaps more—than we do to the E.E.C, or nearly £3,000 million-worth a year. To suppose that a loss of free-entry and preference over the whole of the area to which we sent £3,000 million worth of goods could mean a loss of less than £300 million would be totally unrealistic. It could be a great deal more.
1745 On top of that Sir Con O'Neill spoke of the effect of the higher living costs on industrial costs. Here the White Paper abandons all pretence of objectivity and ignores this altogether. Yet the Chancellor admitted only this week, in another context, that higher prices mean higher wage rates, as we know they do. No serious observer believes that a rise of 5 per cent. to 6 per cent. in labour costs on our total exports of £8,000 million could mean a further loss of less than about £300 million a year.
I know that hon. Gentlemen opposite disregard and distrust all figures ; but if anyone disagrees with these estimates he must show where the calculation is wrong. It is no good indulging in general abuse of any economic calculations ; because if they cannot be made there is no economic case for entry. If they can be made, then on any realistic basis the cost on current account is bound to be nearer £1,000 million a year than £500 million by the time we reach the end of the transitional period, and it could be a great deal more if the food price gap widens.
In addition, we are to free capital exports after a short period. To say that that would not impose a net burden on the exchanges seems to me completely irresponsible. If it were true, we should not have required exchange control throughout the last 25 years. And on top of that the Prime Minister has blithely agreed to some vague plan for running down the sterling balances, which must increase the balance of payments burden still further.
I ask the House to face the real facts, which are totally different from the verbiage in the White Paper. A payments deficit of anything like the order that I have mentioned is bound to mean squeeze policies and even lower growth than we have known in recent years. And the burden would be permanent. There is no reason whatever for regarding it as temporary. Some say that we could get out of this problem by devaluation, which might permit growth though it would not avoid the fall in living standards.
But even if that were legally and politically possible in the E.E.C., which is doubtful, devaluation inevitably means, since E.E.C. food prices are fixed in American dollars, a further steep rise in 1746 United Kingdom food prices and a widening of the gap. So either we cannot devalue and growth moves towards zero. Or, if we can in these circumstances, food prices go up further and the real drop in living standards is even worse.
It also follows from those conclusions that, so far from enjoying a wider market, as also was Lord Aylestone, the Common-market would inexorably be narrowed for British industry as a whole. For the rise in imports, and the loss of exports in the outside world would exceed the gain in the E.E.C, on any reasonable calculation that has been made. Those including the White Paper, who talk about a "wider market" have not even realised that we cannot say whether the market would be wider or narrower until we have made a balance of payments calculation, which they themselves pronounce to be impossible. I note that at least the so-called dynamic benefits have now vanished from the White Paper.
But the White Paper seems to me to reach its low point of absurdity in saying that if our rate of growth were a ½ per cent. higher as a result of membership, by the end of five years our national income would be £1,100 million higher. So also, if growth were a ½ per cent. lower, our national income would be £1,100 million lower—and since the deficit would make it almost certain that it would be lower, the latter platitude is rather more relevant than the former.
The authors of the White Paper also seem not to know that since our exports are only about one-sixth of our g.n.p. we should have to increase our g.n.p. by six times the size of the deficit even to stay where we are. My hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) was only about 500 per cent. wrong in his calculations.
If the estimates that I have given of the burden are anywhere near accurate, entering the E.E.C. on these terms must be a recipe for economic decline, and that, in the modern world, in all probability also means political decline. If my estimates are not true, somebody must show where they are wrong. If the Government both reject these estimates and refuse to make any of their own, by all means let us have a Select Committee to ascertain the facts. The fact that the White Paper dare not face either the 1747 serious arguments or the figures shows how utterly weak is the Government's case. The truth is that these calculations were made in Whitehall and the Prime Minister dare not publish the results.
For the sake of what is the British public asked to undertake these lasting burdens, and also to alienate many of our best friends in the world? One of the worst deceptions practised on the public in recent months have been the pretence that joining the E.E.C. is in principle no different from joining N.A.T.O. or E.F.T.A. or one of the United Nations agencies. Putting it briefly and bluntly, joining the E.E.C. means handing over to an unelected body which is not responsible to the British electorate power to legislate in future over Britain's internal affairs.
That is not merely something that has not been done before in this century ; it has never been done before in any other century. It also offends against the basic principle of democracy that the law should not be used to coerce people who have no power to make or amend it—in other words, no taxation without representation.
At the very least, if there are people who advocate that, they should make it crystal clear to the public that that is what is being proposed. It is no good the Prime Minister's making private arrangements with M. Pompidou and saying that things are all right because our wishes will always prevail. The law of the E.E.C, enforceable by its Courts of Justice, is the law of the Rome Treaty, and agreements made by the Prime Minister with M. Pompidou have no force of law in the E.E.C.
It is also wrong to mislead the public by telling it in one and the same breath that we are going to join a European super-State, speaking with as loud a voice as the United States and the Soviet, and also that we shall not sacrifice our national independence. If we are to speak on an equal level with the nuclear super Powers we have to join a super-State. And if we join a super-State, we cannot retain our national independence. A halfway house between the two would in all probability be the worst of all worlds.
1748 There would be one other political consequence of a settlement of this kind which, if it went through, I for one would deeply regret—the breach in our relations with our oldest and most trusted friends, including Australia, with whom, incidentally, we now have a current balance of payments surplus of over £250 million a year. Unlike my right hon. Friend the Member for Birmingham, Stechford I regard close and cordial relations with the great and growing nation of Australia as essential for Britain's future.
When visiting Australia as a member of the British Government in September, 1966 I was authorised by the Cabinet—as also did Lord Aylestone, the Commonwealth Secretary and other colleagues—to say, and I did say, publicly, that in any E.E.C. settlement Australia's essential trading interests would be safeguarded. I never contemplated for a moment terms that would provide no permanent safeguards for Anglo-Australian trade at all. I regard the present terms as a breach of the pledge that we then gave Australia.
Yet another unhappy deception is the Government's blanketing of the whole question of our future relations with the other E.F.T.A. countries. Is it true, or is it not, that they are to be offered industrial free trade area status, as reported? If so, why on earth should we not have it also? It would be an incredible conclusion of these wasted years that the British public alone should pay extortionately for benefits which are apparently now offered to the rest of the club for nothing.
In this debate we must all say what we believe. In my view, after quite a bit of study over the last few years, to join the E.E.C. on these terms would be to imperil, on the basis of naive hopes and crude miscalculations, both the essential liberties and the future greatness of this country, for the sake of which we have fought two great wars in my lifetime. That being so it would be utterly intolerable that the electorate should not be consulted before this choice is made.
Nobody contended, in this House or outside it—least of all the Tories—in the 1831–2 or 1910–11 crises, that the powers even of the Lords alone could be altered without an appeal to the electorate. What is now proposed is a far greater revolution in our constitution than anyone contemplated then. Nobody can 1749 pretend that this Parliament has a mandate for it. Whatever views we hold on entry, therefore, it seems to me indisputable, in the light of our constitutional history, that this above all is an issue which the people themselves must decide.
§ 6.57 p.m.
§ Mr. Stephen Hastings (Mid-Bedfordshire)
I am sure that we all respect the sincerity and diligence with which the right hon. Member for Battersea, North (Mr. Jay) has spoken on this subject for many years. He speaks as an expert economist—a formidable economist. But as the debate has continued over the years it has struck me as remarkable how economics are called in aid with equal and absolute conviction by both protagonists. One or the other must be right, or righter, but it does not necessarily increase the confidence of a layman like myself in the judgment of economic experts or in the science of economics itself.
As the right hon. Gentleman's speech developed it seemed to me that he was complaining—although he couched what he said with many calculations, figures and economic arguments—that the White Paper lacked objectivity, or, in other words, that it did not help his case. That aspect of the case put by those who oppose entry into Europe I cannot accept or understand. The Government have said that they regard it as, if not essential, very nearly essential that this country should enter the E.E.C. Why, therefore, should they be expected to produce a White Paper which puts forward a case which could legitimately persuade people to come down on what the Government regard as the disastrous side of the fence? It is not reasonable to expect that that could ever have taken place.
I want to take up one more point with the right hon. Gentleman, and I hope that I shall not do so unfairly. It seems to me that he, and others who think with equal sincerity, that it is wrong for us to enter Europe, must produce an alternative. I could not detect any sign of his doing that in his speech.
If this decision were being taken in a static situation, he would have a point in simply indicating the difficulties and dangers. But the decision is being taken in a dynamic and changing world—a world which is changing very much to our detriment and producing greater 1750 dangers for this country than we have faced hitherto, since the war. So it is up to those who oppose this proposition to produce, first of all, an analysis of those dangers and, second, an answer as to how they would cope with the resources of this country outside Europe. This the right hon. Gentleman has failed to do.
I apologise to the House for not having heard the debate yesterday, through no fault of mine. I have read the HANSARD very carefully and I would agree with my hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), whose eloquent and amusing speech I know we all immensely enjoyed, that, in the main, the debate has been of a high order. I am a convinced European, as I have said in this House in previous debates more than once. Indeed, it was one of my motive forces in taking an interest in active politics. I could not understand, as a British official in Europe, living and working among Europeans, why we were not at Messina in the first place. Had we been, we could have played a large part in writing the rules. But the Government saw it otherwise at the time.
I went through some disillusion-judging from the speeches in the last debate, I am not alone in this—not only because of the failure of the negotiations, but because of the failure of the Six themselves to make more progress towards their great objectives. I recall the words of The Guardian a year ago, just before our last debate. The Guardian, which is nothing if not pro-European, referred to the Six in these words :It is not Europe : it is six nation states behaving like nineteenth century monarchies.That summed up the mood when last we debated these matters.
But, again like others, I have been immensely heartened by the course of the present negotiations and the new spirit which I firmly believe the Prime Minister and the President of France have succeeded in bringing forward. Our accession to Europe could and should prove a catalyst. Energies of E.E.C. can be revitalised, and the whole outlook of Europe could well be transformed if we succeed in getting in.
I am content with the risks which we run, which I believe I appreciate. I am impressed, as ever, with the dangers of 1751 isolation. I should like to congratulate the Prime Minister and the Chancellor of the Duchy on the spendid progress that they have made. They deserve the support of the House of Commons.
That said, and if I now sound a note of warning, it is simply because I believe that it is the duty of all of us not only to look critically at the proposition itself and the terms of the negotiations but to consider the evolution of Europe after our accession, and to perceive so far as we can, where the dangers lie and what our rôle in Europe should be, if there be a particular one.
In his statement two weeks ago which he quoted yesterday, the Prime Minister said in his first sentence :The Government are convinced that our country will be more secure, our ability to maintain peace …stronger if we join…."—[OFFICIAL REPORT, 7th July, 1971 ; Vol. 820, c. 1338–9.]The first sentence of the White Paper is in the same sense :The prime objective of any British Government must be to safeguard the security of the United Kingdom….Two paragraphs later, it says :Our security has been bound up with that of our European neighbours for several thousand years.I am content to leave the deployment of the case about economic strength today to others. I am convinced that it is formidable, and I only wish that the case to be made for increased security could be as well articulated. Inevitably at this present moment, it is vague. It played no part in the negotiations, although special emphasis has been laid upon it in the Government speeches and in the White Paper. Indeed, if it had, I suspect that agreement would never have been reached at all. There is much talk of economic strength as a main objective, but security is as important and, in the final analysis, you do not defend Europe or indeed this country with balance sheets but with men and arms.
What is the background against which we are taking this decision in the context of security? Since the inception of the E.E.C., there has been a vast expansion of Soviet power all over the world. More than that, there has been the development and the refinement of her techniques for subversion and the destruction 1752 of free society from within. We have seen examples of this in Europe. We have felt it even nearer home than that.
During the same period, Europe bas developed, the E.E.C. in particular, with great success, and we have continued more or less to prosper in this country. Why? Because of the great umbrella of American power. But now it seems to me there may be the signs of an ugly sea change here. I hope that I do not exaggerate—I am no expert on the United States—but I think that any unbiassed observer would say that our great ally appears to be at odds with herself, perhaps from the frustration of, if not a defeat at least the absence of victory, despite her great power, in Vietnam. Perhaps because of the turmoil in her streets ; and the endless process of self-analysis conducted in the brutal glare of publicity, about which we read nearly every day in our newspapers.
This seems to me to indicate a great nation which, temporarily surely, has to some extent lost her way, if not her nerve. Whether or not this is so, we would do well to count on a continuation of the mood of retraction to which the hon. and learned Member for Northampton (Mr. Paget) referred. The Mansfield Amendment will be back again next year, and the pressures on the American Government to withdraw will grow. And with this will grow a mood of increasing dissatisfaction with Europe—so I believe and so I fear.
So, for all the brave words in the Treaty of Rome about security, and the brave words that we are now uttering, security remains a question mark. The disparity between the American contribution towards our security and the European contribution is something which we would do well to consider. United States defence expenditure in 1969–70 was about four times the entire defence expenditure of the Ten—not the Six—(excluding Ireland for which I have no figures). Per capita, the United States spent 393 dollars. The next contributor was France, with 123 ; the figure is 100 for this country and less for the others. It tells a dangerous story.
If this picture is a true one, security within the E.E.C.—whether we accede or not—is still only a potentiality and no more. Unless something is done it could, in the years to come, cease to exist. My 1753 speech echoes, I think, some of the things that the hon. and learned Member for Northampton (Mr. Paget) said, although his conclusion and mine are utterly different. This then must be our rôle if we accede. It is for us to lay stress on these dangers and to encourage the communities to help bear the burden which is now so disproportionately carried by the United States.
But we must do more than just talk. France is outside N.A.T.O., and this has been referred to—by the right hon. Gentleman the Member for Battersea on television the other day, for example—as a gaping hole in European defence. If France had no adequate defence forces, this would be so, but she has. She has spent more than we pro rata on her defence in recent years.
But it is my contention that there will be no Europe and no European defence unless it is on a basis of Franco-British understanding in terms of defence. I would ask the House whether, in present circumstances, the French position is quite so incomprehensible as some hon. Members are inclined to make out. Although the details are not known to me or to anyone else who has not served in Government, I know that we have exclusive arrangements with the United States over the nuclear exchange and probably the exchange of other vital information and intelligence as well. I do not blame us for it. But it is, as far as I know, a fact, and the French know it is as well.
It is my prediction that while we maintain this exclusive arrangement with America, France will not return to N.A.T.O. Nor will European security ever really be built. This is an agonising dilemma for the Government, but it must be faced in the context of this debate and of the decision which we are contemplating.
Accession to the Treaty is one thing. But if information vital to the defence of Europe is denied to Europeans within the Communities, this could eventually damage the very partnership to which my right hon. Friend the Foreign and Commonwealth Secretary referred. Yet to transfer our allegiance in this sphere fully to Europe carries risks, not the least of which is the tension which could arise between ourselves or likewise Europe and our most powerful ally.
1754 Indeed, I believe, alas—though this need not in any sense be disastrous—that tension will arise not only in defence matters but probably in monetary matters with the United States. It is probably inevitable that this will happen and it is right that we should face it ahead of time.
A Franco-British understanding on this basis is essential. It is a strange experience for one who, like myself, has worked in France and with Frenchmen in both peace and war, to accept that the disagreements and misunderstandings should be as wide as they undoubtedly are. However, one must make this allowance for the fact that on either side, we have, to quote their phrase, "défauts de nos qualités ". And when we do eventually arrive at an understanding, we make a formidable combination.
If the mood of France seems from time to time petulant to us—and it certainly does occasionally, and perhaps fairly so—then it is well for us to realise that, seen from their point of view, we often appear to be past masters at conveniently overlooking what we conceal from others.
I spoke of the background to this great decision. If I am right, one thing is clear ; that we do not take it in a static but in a dynamic period of change. It is a time of change which is not working in favour of the West or this country, but against us. There is great danger ahead. Economic prosperity through accession to the Common Market we will, I believe, achieve, but upon it we must build security, and I do not believe that this will come automatically.
Indeed institutions for a common defence of the Communities do not even exist. But our experience and history, it is in this area as much as in any other that we have a vital contribution to make to the consolidation of Europe and the survival of the Western world. I hope that before the end of this debate one of my right hon. Friends will find time to address himself to this particular aspect of the great matter before us.
§ 7.14 p.m.
§ Mr. Robert Sheldon (Ashton-under-Lyne)
I intend to handle my contribution to the debate in a way markedly different from that adopted by the hon. Member for Mid-Bedfordshire (Mr. Hastings), and I trust that he will forgive 1755 me if I do not dwell on the aspects to which he referred.
My interest is concerned with the comments made by my hon. and learned Friend the Member for Northampton (Mr. Paget) when he talked about wealth for distribution. His remarks in this connection hit me on a sore spot because my main stand in advocating entry into the Communities is based on the fact that it will provide wealth for these purposes.
Like many of my hon. Friends, I sat through the last six years of Labour Government at a time when we were expecting to see a much greater distribution of income than we were able to achieve. What particularly impressed me during those years was the need to acquire greater increases in national wealth so that a greater proportion could be redistributed.
Because of the economic problems of the time, we found it extremely difficult, virtually impossible, to redistribute the almost static sources of wealth, primarily because the average members of our community were so taxed that they could not be expected to be willing to have more of their money given to others in greater need.
Long before this state of affairs arose I found myself firmly in favour of making economic growth our first priority, so establishing sources of wealth, for only on that basis could there be greater economic equality. I favoured that then, and I favour it now. The limitations on our actions at that time, mainly because of our commitment to put the £ on a higher level of priority than economic growth, led to the difficulties which the Labour Government had to tackle and, finally, to the election of hon. Gentlemen opposite.
If we look at our record we see that our problems over the economy go back a long way. There was a time when we were the most prosperous nation. Figures based on 1899 show that our gross domestic product at about the turn of the century was greater than that of the United States, three or four times that of France, about three times that of Germany and two or three times that of Switzerland and Sweden. We were indeed a nation of immense wealth.
1756 The trouble was that we did not know how to distribute the wealth we had. If my Socialist predecessors had had the opportunity to distribute in the way we have come to understand what wealth distribution means—in a way which they actually largely understood—enormous benefits would have accrued for Britain and the world. Unfortunately, however, that was not to be, and by the time that we had achieved Governments which were anxious for greater economic equality, our wealth was no longer there.
In the inter-war years and later we saw a declining position in our economy. I attribute one factor, if not the main factor, of our decline to diminishing Commonwealth trade. During our period of prosperity Commonwealth trade had been the main anchor of that prosperity. That prosperity from Commonwealth trade, although not as great, continued after the war and into the early fifties. At that time about 45 per cent. of our exports went to the Commonwealth. By last year the figure had fallen to 21 per cent.
In all honesty, none of us can be certain when predicting matters of this kind. It is unwise to predict with a greater degree of certainty than the facts justify. However, it seems unlikely that the present trend will be reversed. Those who look forward to a British rôle outside the Common Market must show where the markets will exist in which our industry can sell its goods. It is on this basis that I have concluded that the Common Market offers the main prospects of success.
An interesting point about our Commonwealth trade is that as the benefits from having a Commonwealth declined, so, incredibly, the cost of maintaining that Commonwealth rose. Whereas the benefits declined in the way I have outlined, the costs of maintaining the defence of the Commonwealth, which were £3 million a year throughout the inter-war years, rose to £460 million a year in overseas Government expenditure in recent years, a large proportion of it representing military expenditure, particularly in the defence of sea routes. This is one reason why many of us were anxious to end our east-of-Suez rôle, the benefits from the maintenance of which were hard to discover.
The reasons for the decline in our Commonwealth trade we know. Many of these countries were virtually colonies. 1757 Even when they became independent the people who had previously run them were placed in positions of responsibility. They made the decisions about where goods should be purchased, they made the planning decisions and, to a great degree, they fixed the tariffs and terms of trade in respect of those countries. That benefit remains with us even such a long time afterwards because of the habits of thought engendered over that period which tend to persist long after the realities which gave them birth have ceased to exist. Even today we still have some residual advantages in the fact that there are people who perhaps know some of the manufacturers here slightly better than they know those of Japan, Germany and other industrial nations. There is, therefore, still a little further decline possible because of that factor alone.
We have to replace these markets with others, and if those who argue against the Common Market are to convince me, they must show that we can find those other markets. My mind is by no means closed, but nothing that I have heard in these two days of debate, or in the years of debate that have gone on in the country, has shown me where these alternative markets for the products of our factories will come from.
Regionalism is a very great interest to the House, and of great importance to myself. I strongly believe that we cannot remain one nation as long as one part of the country is accepting a markedly inferior level of treatment and of employment, and a standard of living different from that prevailing elsewhere. But I have never believed that our regional problems were all that difficult. Mention has frequently been made of Southern Italy ; but our enormous advantage is that our regions, and Scotland and Wales in particular, are areas where the level of education is immensely high.
I do not think we have ever looked at this problem in these terms. These are not regions of labourers but regions potentially of very high skill. Some of our regional incentives, such as investment grants and industrial development certificates, were superb instruments given a high degree of prosperity in the community as a whole. The difficulty was that we operated these instruments at a time of economic stagnation, when the incentives by themselves were not enough, and we tried to obtain a degree 1758 of decentralisation which was not possible in the circumstances.
So, although the improvement in Italy may not be as great as many Italians would wish, we have to compare what has been achieved there with what would have been achieved had they not had the industrial North expanding at the rate at which it has been and so been able to generate a demand for goods which can result in factories being diverted to the South of Italy. But their problems are much greater than ours.
Our chief problem is that we have not realised the potentialities of high skill. What should have been done was to ensure that training and retraining facilities were available to convert these regions of highly educated manpower into areas of high skill to which factories would be drawn. This we have not realised. I accept that this can best be realised not only by setting up training centres, these new forms of technological education, these new forms of training skilled men and others required, but by achieving the high levels of prosperity which will increase employment opportunities in the regions.
We can learn from the figures. In 1964 unemployment in Scotland was 80,000. In 1965–66 the number had been reduced to 63,000. Despite these regional incentives the economic facts predominated, so that in 1970 unemployment in Scotland rose to 93,000, and at the present time it has gone up far higher. The figures for Wales and the Northern Region bear out the same point.
My argument is that when a Labour Government came in they reduced levels of unemployment in these regions but the economic consequences of low economic activity were much greater than the industrial incentives for jobs. So we saw that the wisest industrial incentives were insufficient to overcome the disadvantages of an under-used economy. This is the problem we have today. However good the measures we have for the regions, much more important is the level of prosperity, through which these regions can gain their fair share of jobs. So I look forward to a greater degree of prosperity being utilised—and, frankly, I do not believe that this Government will utilise it—to create wealth in the regions.
But the wealth-creating potential is utterly neutral. Economic growth has no 1759 politics. We can use economic growth in maintaining a wealthy capitalist society, or we can use it for a massive redistribution to help the ordinary people. I am in favour of Europe because I am in favour of the latter choice. Opinions will differ in that respect, but this creation of wealth is something that I hope may possibly unite us.
The peculiarities of our country and the companies in it favour entry into the Communities. Because of an accident of history, of having a Commonwealth and needing to cater for it, Britain has very large companies. Let us look at some of the figures. Out of the first 10 companies in Western Europe and Britain, four are British ; of the first 50, 21 are British ; of the first 200, 103 are British. Those figures are taken from The Times index of 500 companies published a year or two ago.
It will therefore be seen that we have very large-scale industry, and the reason for that is simple to understand. We have had very large markets in the Commonwealth. These companies were created to handle those very large markets. Those markets are in decline, and they need to be replaced.
Let me read paragraph 72(e) of the White Paper "Britain and the European Communities : and Economic Assessment "published in February 1970. Talking about high technology industry, it states :… national markets in Europe—even the Community as it is at present—are too small to generate the financial and other resources needed for the adequate growth of such industries "—The high technology industries :particularly in competition with the United States. Even the enlarged Community's gross national product would fall short of that of the United States.I believe that statement to be profoundly true. We have these very large companies, and they require the very large markets that we do not possess.
In the same year as we have been discussing the demise of Rolls-Royce we have come to appreciate the problems of these companies which we consider at present to be at a disadvantage but which should be the country's jewels in their ability to compete at the highest possible level. We see a company like Rolls- 1760 Royce forced to export, forced to find these very large markets but unable to utilise them because the only market in which it could sell and which was large enough for it was a market outside this country—America—where it had to accept ruinous prices in order to keep in the forefront the product it was manufacturing. This situation—peculiar to large companies, originally created to handle large markets, with those large markets having been largely lost—is peculiar to our industry. That which should have been an enormous advantage over the past 10 or 20 years has, because of our declining markets, for the first time become a disadvantage.
So we are saying what a pity it is that we have firms which are so big and so dependent on these markets, and how much better it would be if we had smaller firms selling to many markets. This is where we have turned what should be an advantage into a disadvantage, by not having the large market these companies so require.
They are in favour of entry. They may be wrong. Even economists have been wrong. However, if industrialists believe it to be right, this at any rate should be a starting point from which people should counter the arguments very strongly indeed before they are rejected out of hand.
Whatever we may say on all these matters, there is no doubt that we need to explore the question of entry into Europe with less emotion than has sometimes been given to it by those who look to the rosy future which they see assured. I argue it on the basis of our industry, which may be a less glorious subject than that which many other hon. Members may wish to choose. My view is that the glories of the future, whatever we may say, are very likely indeed to be rather less than those that we enjoyed in the past. It may well be that at this stage in our history we ought to accept a rather more modest rôle in which to become accustomed to our rightful place in the world.
§ 7.31 p.m.
§ Mr. Edward du Cann (Taunton)
How right the hon. Member for Ashton-under-Lyne (Mr. Sheldon) was in many of the practical things he said in his sincere speech. I especially agree with him that 1761 the prosperity of the regions is dependent first and foremost upon national prosperity. That is very true.
For me the hon. Gentleman's well-argued speech—well argued, as any of us who have had the pleasure of listening to him on other occasions would expect from him—was remarkable in another respect. If the debate has an aspect which is impressive, it is, perhaps, the conviction with which the advocates of our accession to the Communities express themselves. The hon. Gentleman's was not the only speech. The right hon. Member for Leyton (Mr. Gordon Walker) and my hon. Friends the Members for Mid-Bedfordshire (Mr. Hastings) and for Chelmsford (Mr. St. John-Stevas), apart from the Front Bench—
§ Mr. Arthur Lewis (West Ham, North)
On a point of order, Mr. Deputy Speaker. I raised this point yesterday and I raise it again now. Yesterday eight speakers were called who favoured entry and only four speakers who were against. Today there have been eight back-bench speakers, six for entry and two against. That means 14 against six so far.
Surely there ought to be some fairness, and that should be obvious. The Chair usually calls one speaker in favour of the Motion and one against. I know that you, Mr. Deputy Speaker, are in some difficulty. I ask that Mr. Speaker be confronted with the facts. The facts are in HANSARD. I waited to hear the right hon. Member for Taunton (Mr. du Cann) speak, because I have seen a number on the benches opposite who are against going into the Common Market. It is grossly unfair to find that 13 speakers—[Interruption.]
§ Mr. Deputy Speaker (Miss Harvie Anderson)
Order. I am sure that the hon. Gentleman is aware of the Chair's concern to have a debate which is evenly balanced. However, the hon. Gentleman will also appreciate the difficulties of the Chair in recognising just what people will say. The Chair will do its best.
§ Mr. Lewis
I appreciate the difficulties, Mr. Deputy Speaker. I know that Mr. Speaker knows and that there has been a 2 to 1 majority in favour of those going in. I also know that the right hon. Gentleman is one of them. I ask that 1762 before the debate concludes we try to balance matters and make things a little more even.
§ Mr. du Cann
The hon. Gentleman is a little premature. Before I was interrupted by that point of order I was about to say, in referring to those speeches and the passionate advocacy of entry into Europe, how much I envied those speakers this faith, as I have envied—I speak in the context of my hon. Friend the Member for Chelmsford—the priest his.
For all his deep personal commitment to this question, my right hon. Friend the Prime Minister, whose constancy in this matter, like others, particularly the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), is much to be admired, was surely right to speak with understanding yesterday of the deep anxieties that some of us have on this subject and to which my right hon. Friend for Kingston-upon-Thames (Mr. Boyd-Carpenter) referred.
There are not only three opinions in the House, as the Leader of the Opposition said yesterday. I believe there is a fourth made up of a number, perhaps only a few, who think that the terms are probably as good as they can be for a late entrant to this special club. This is what the right hon. Member for Stechford said.
Those of us who know my right hon. and learned Friend who has been responsible for the negotiations would expect no less success from him. After all, he was educated in my constituency ; and we have high hopes of him still.
These same people hold and always will—they are not alone in this—that in a matter of this sort, however deep may be our individual ties of personal or party loyalty, however longstanding, one must search first for what one honestly believes to be the country's chief interest and place it above all other in making one's own decision, the decision one must make for oneself when October comes. This is where I stand.
The House is the richer for certain examples already set on both sides of this argument. Even if it seems at present 1763 that Parliament moves forward inexorably to a favourable decision in October, as my right hon. Friend the Member for Kingston-upon-Thames suggested, it is surely important, if our discussions in this place and in the country—discussions which my right hon. Friend the Prime Minister has urged on us—are to have reality and to be credible and a decision in due time is to be honourably made, that answers be given or attempted to the many questions which the White Paper raises ; for I believe that it raises more questions than it answers.
This debate is, as my right hon. Friend the Prime Minister said, exploratory and explanatory. I ask some of the questions now, not as an enemy of the White Paper, nor in any cynical sense. I ask for information for myself and for my constituents and because I feel myself to be in need of guidance.
The White Paper is a strong, positive document. One of its chief purposes, presumably, is—quite properly—to engender enthusiasm. In this process, as one learns—if one has not the wit to see it for oneself—from constituency comments at meetings and in other ways, its authors have presented perhaps too much one side of the balance sheet and perhaps too little of the other, with the resultant danger that to those with genuinely questioning and genuinely open minds it carries less conviction that it might.
For example, the assertion in paragraph 29 that we shall surrender no part of our essential sovereignty is surely a gross exaggeration to put it no worse. Professor Dicey, whose works I—no doubt like my right hon. Friend—was obliged to read perhaps ad nauseam at university, would have had a harsher word for it. I am glad that my right hon. Friend the Foreign Secretary, like the right hon. Member for Stechford, said some wise and helpful words on this subject.
Further, the statement in paragraph 31—The English and Scottish legal systems will remain intact—if "intact" means "untouched" or "entire", surely cannot be accurate.
I do not say that these things are wrong. I do not say that it is entirely wrong that we should surrender sovereignty. I do not say that it is 1764 wrong that we should allow our own laws to be overruled by international law. What I say is that the White Paper might argue the reasons better, more clearly and more cogently.
So much has been said about the costs on the balance of payments, not least by the right hon. Member for Battersea, North (Mr. Jay) in his closely argued speech, which requires an answer. The section on costs of entry is sadly incomplete. There is no full assessment of the cost on resources on entry nor any indication—I hope that my right hon. Friend the Secretary of State for Trade and Industry will comment on this—of the changing patterns of international trade which may well follow if we go into the E.E.C.
There is much about the prizes to be gained, a good point which it is perfectly proper to make, but if we enter we must indeed develop the will and the imagination to win them. There is little, on the other hand, about the stresses meantime.
I instance the problems facing many smaller firms. I hope that no one will mind if I say that the C.B.I. is often thought to represent the larger rather than the smaller firms. Little is said about the competition that will accrue in this country and the upheavals in trading patterns inside this country which also will follow. I would not understate or ignore these matters because, knowing the demerits, assessing them coolly will enhance and not hamper proper judgment if we are to make it.
As to some of the arguments about which I have been asked in my constituency, why did we dismiss in a single sentence, as the Government do in paragraph 18, any idea of an economic association only with the E.E.C.? This was, after all, British policy for a long time. It is the policy today of a large number of other nations. There are association agreements, about which my right hon. Friend the Foreign and Commonwealth Secretary said something, or preferential trade agreements with Turkey, Tunisia, Israel—I thought that my hon. Friend the Member for Chelmsford was moving a little closer to Rome than either geography or the facts of the E.E.C. warranted—Spain, Malta and Morocco, about which we heard so much yesterday. One hundred million people—this is no light 1765 matter. There are discussions with Austria, Portugal, Iceland, Sweden, Switzerland and Finland. We must be told plainly in this debate why association is wholly ruled out for us.
Others have questioned the arguments in paragraph 36 for rejecting almost out of hand, it seems to me, the concept of the Atlantic Free Trade Area. My right hon. Friend the Foreign Secretary was good enough to speak about this today, but very shortly. The House will remember the argument in the White Paper. If the United Kingdom has not dominated E.F.T.A., why should it be supposed that the United States would dominate the Atlantic Free Trade Area? I wonder whether the United States would today take the same view that my right hon. Friend the Foreign Secretary suggested it took a little while ago when this matter was first suggested. I doubt it, because the attitude of the United States now towards E.E.C. and its competitive force is different from what it was then.
In any event, some people say—I think rightly—that it is hard to understand why the United Kingdom's industry should suddenly thrive on a new domestic market increased to 250 million or 300 million when it has, apparently and repeatedly, failed to do so on the basis of 100 million in E.F.T.A. plus the advantages, such as they are, of Commonwealth preference. I truly believe that the future prosperity of our country depends less on favourable trade arrangements negotiated by Governments than upon the commercial competence of our people, their inventiveness and their will to work.
Now, a different group of questions. In my experience, people relate politics chiefly, and in some cases exclusively, to its effect upon their daily lives. That is not selfish ; it is human. Hence, it is inevitable that talk in the country about the Communities is mainly on the economic side. Yet progress again, as I think my right hon. Friend the Foreign Secretary indicated today, towards economic unity is certain progress towards political unity. This may be right, it may be wrong, but it is a progress which is deliberate and accelerating.
We are familiar with what has already been achieved. We should appreciate that there will be common economic institutions and shortly, as recommended by 1766 Werner, a common currency and a common foreign policy, of which my right hon. Friend the Prime Minister spoke. Political unity is the declared goal of the Six. If we join, we may influence the speed or the tactics, but certainly not the direction. This is irreversible. It is essential, therefore, for the urgency of the proposed political union with nine of the many countries of Europe to be better defined in this debate and better understood in the country.
Certainly, there is a need for the United Kingdom to be consulted about and to influence the Community's domestic and economic decisions. Company law is one point which, I think, the hon. Member for Ashton-under-Lyne had in mind and my right hon. Friend the Prime Minister referred to it at Question Time today. I agree with what they both said. Certainly, we must pay attention to and influence the Community's domestic decisions. That is unquestioned.
Nor is it possible for this country to be careless of the world's problems in any circumstances or at any time. To do so would be against our tradition and it would be against the constant resolve of this House. But is accession to the Communities the only wav to do this? Of course it is not. The question really in this debate is whether it is the best way. That is what the debate is all about.
Here, we badly need more information than the White Paper gives us. If it is to be political union for the future, we come at once to practical questions. How is this to be managed? The term "community" has two meanings. There is, first, the spiritual meaning, the belief in a common purpose, the sense of family and the like. There is the second, the implication of positive, practical and effective institutions.
There is a statement in the White Paper of what the institutions are today and how numerically they will be organised if we join. Is it not generally agreed, however, that their present organisation and shape needs reform? Is not that agreed on all sides? If that is so, would it not be helpful to have a fuller view from the Government than we have currently had about how we would wish to see those institutions develop? I do not ask for details ; that would be too 1767 much, impractical and absurd. I do ask for more information about their future style, terms of reference and the like.
I give examples. We read of the "slow and awkward working of the Council". Those are not my words but those of Jean Rey, the former President of the Commission. We hear that the majority voting system will be used more often. Again, this may be proper. But what is the scope of the matters in respect of which we or any other nation may be outvoted in the future? What sort of matters would we regard as being of the highest importance? What sort of matters would we regard as being of the lowest importance? Who is to be the arbiter of our essential national interest, to which again my right hon. Friend the Foreign Secretary referred? These matters are capable of definition and I hope that they will be defined, if possible in this debate.
Next, the relationship between the Council and the Commission. What is the attitude of our Government to the view, which I understand is currently held in Europe, that as the Community is enlarged, so must the Commission's powers be. It may well be an appropriate thing to happen but I would like to know what it would mean. How far will this process go and in what sort of directions do we think it should go?
Then there is the Parliament, which currently is consultative only. Do the Government agree, as again is suggested in Europe, that the time is ripe for election by universal suffrage? Do they agree that equally it must be given legislative power within the Community? I hope that the House thinks these are significant questions and that it is appropriate they should be asked. I hope, too, that we may find—I repeat the word I used earlier—guidance in respect of them. All the time the Community evolves, there is this inevitability about it. We cannot, and we must not, ignore it. If we are members, certainly we can influence it. We need, however, an indication of the Government's view in one other direction.
Finally, therefore, if it is to be political union, how far is the process to go? To date, France and the French may be no less French and the Germans no less German than when Tacitus wrote about them. Alas, I wish we could say the 1768 same about the English. We are being too badly influenced in language and other ways by the Americans. More is the pity, I think. The next 10 years of the Community's life will be very different from the first 10 years. As this process gathers speed, is it to be a Europe des patries? Is it to be a Federal Europe, a confederation or what? I do not know for sure. But I wish to know. I think one should know, because I do not believe that it is the business of this House to sign any political blank cheque at any time.
If this question, like many others honestly asked here and in the constituencies, can be well answered, I am sure the debate will have been most useful. Certainly one must take risks to progress. There is not one of us in this House who has not done this in our commercial or political lives, and it is appropriate that we should carefully calculate those risks.
§ 7.51 p.m.
§ Mr. Neville Sandelson (Hayes and Harlington)
Few hon. Members address the House for the first time without a measure of diffidence, and I am no exception in that respect. In addition, one cannot take the place of Arthur Skeffington as Member for Hayes and Harlington without some humility. I am conscious that he was held in great esteem by the whole House, which recognised his many qualities, not least his personal integrity, and his unselfish contribution over a wide field. In the constituency which he represented for nearly 18 years he was a much loved Member of Parliament who set a standard of service which any successor would find difficult to attain.
I came to Hayes and Harlington only recently after a few preliminary skirmishes in less advanced areas. With Heathrow on the southern rim, I suppose I can claim that more famous as well as infamous people set foot, albeit briefly, in my constituency than in any other part of Britain. Although only 15 miles from Westminster, and now part of the Greater London conurbation, Hayes and Harlington retains a most distinctive character. Indeed, as often happens, feelings of local identity and tradition have been strengthened rather than diminished by association in recent years with the wider community of London. 1769 Most of its people work in local industry, which ranges from advanced technology in the electronics field to the processing and packaging of a wide variety of foods, some of which are household names all over the world. I would also mention the local aircraft industry, and the airport with its freight business—cargo coming in and going out of the country by air—which play a vital rôle in the life and the economy of the constituency as they do of Britain as a whole.
Perhaps even in this important debate I may be allowed to refer to the by-election result itself because it spoke eloquently of the sense of outrage felt by the electorate at the mismanagement of our affairs during the last year. It was not simply anger at unemployment which has taken its toll of skilled workers in Hayes, nor anger at artificially induced stagnation, nor even simply anger at consumer prices soaring to unprecedented levels in direct and deceitful breach of the pledges which secured the Government their victory a year ago. It went much deeper. It was the Government's social attitudes as a whole which the people of Hayes and Harlington found so repellent. It is in such Measures as last week's Education (Milk) Bill—and what a dreadful misnomer that is—that Tory Governments demean themselves and ensure their own destruction. The people of Hayes and Harlington have a warm sense of social justice, and not for over 30 years has there been an electoral swing of such dimensions against any Conservative Administration.
In four parliamentary elections since 1966, including two by-elections, I have spoken in favour of Britain's entry into the European Community. I can do no less today. While I recognise the great complexity of the issue and the sincerity of those who oppose entry, the case for it seems to me a convincing one on both economic and political grounds. If one accepts this, as I do, the fact then in addition that this is a move towards European co-operation and unity, with all that that could, and, in my view, ultimately will, mean in terms of sheer Socialist aspiration makes this an overwhelmingly convincing case.
It was to my mind greatly to the credit of the last Labour Government that in 1967, at a time of considerable economic weakness, and again last year when our 1770 position had become a strong one, they showed courage and realism in reviving earlier abortive applications. I would, of course, like every other hon. Member on this side of the House, feel happier if Britain's entry was to be under the aegis of Labour leadership. That it is not cannot of itself destroy the validity of the case for going in. I hope and believe that the time is not far off when a Labour Government will be able to place a Socialist emphasis on our membership of the Community and develop positive programmes of action with like-minded Europeans and Social Democratic organisations.
In the course of the by-election I made it clear that I was in favour of British entry, subject to acceptable terms. I believe that apart from any other consideration it would in the long term be of economic benefit to my constituency. It would, in my view, mean more work and more industry coming into this area, which has been declining industrially for some years past. I have in mind also that it is particularly the type of industry and industrial services contained in the constituency which would benefit most from an expanded and buoyant market.
Other right hon. and hon. Members have addressed the House on the issues central to the decision that must be taken later in the year. If, Sir, you will bear with me for a few moments longer, I would refer briefly to an aspect of the Community which greatly impresses me and is sometimes overlooked. That is how internationally-minded and outward-looking the Community has become. From its very inception the Community created a network of relations with the wider world beyond Europe. It is just this network which can be complementary to our own network of relations, particularly with the Commonwealth.
I think it is extremely heartening that associate membership of the Community will be open to all the African members of the Commonwealth, and to the Caribbean countries, too, if Britain joins. The prospects here, it seems to me, are for a deepening of the Commonwealth relationship rather than for a slackening of our ties with these peoples. The East African Commonwealth and Nigeria, of course, already have their own connections with the Common Market. Moreover, the Community's special agreements rather 1771 nearer home in the Mediterranean basin can be of great value to this country. The right hon. Member for Taunton (Mr. du Cann) has just said something about this, and I listened with interest to him. I am thinking of the economic association—of course, there is no political association involved here—with countries such as Greece and Turkey, with North African nations such as Morocco, Tunisia and Algeria, with Israel and most probably with Egypt, and with Spain. These agreements will give British exporters preferential access to an additional market of 100 million people. This presents, does it not, a tremendous opportunity and, as it were, a bonus on entry into Europe?
The Community has other overseas relationships which are just as important in their own way. I have in mind its exchanges with Latin America, Japan and countries of the Soviet bloc.
I have not the time now to say anything about the Community's extensive programme of aid for overseas development. I am glad that others of my hon. Friends and hon. Members opposite have said something about this themselves. The point which I make in conclusion is not simply that the prospects for British trade will be enhanced. It is that the Community is outwood-looking in the best sense of that term. It has looked out beyond its own continental boundaries. It has demonstrated that it is not a narrow selfish grouping. It is to this generous outward-looking spirit that we in Britain, with all our experience, can make a leading contribution.
§ 8.1 p.m.
§ Mr. Emlyn Hooson (Montgomery)
It is my great pleasure to congratulate the hon. Member for Hayes and Harlington (Mr. Sandelson) on his maiden speech. The House greatly appreciate his references to his predecessor, who served in the House for a long time, and I am sure that the hon. Gentleman's constituents will equally appreciate his references to his constituency. I thought that the hon. Gentleman's speech was extremely well constructed, although I did not agree with part of it, and there was also a rather engaging provocative tone at times in what he said, which, in my view, does not come amiss in a maiden speech.
§ Mr. Speaker
Order. If I may for a moment interrupt the hon. and learned Gentleman—it was also suitably brief.
§ Mr. Hooson
I cannot say, Mr. Speaker, that you took the words out of my mouth.
I am most grateful to have caught your eye, Mr. Speaker, because I have to disagree with members of my party on the views which they take on the great issue before the House today. I disagree with great diffidence because I took pride in the fact that, in the early days, the Liberal Party was the only party in this country which saw the opportunity of joining the Common Market when it was first formulated, when we had a chance to join, at the start ; to give it a sense of direction, in formulating its rules, and to have a decisive influence on the way in which it would develop. I feel that my right hon. and hon. Friends could well reflect, with Shakespeare, thatThere is a tide in the affairs of men,Which, taken at the flood leads on to fortune ".That was the time of the flood tide! I differ from my colleagues in the sense that I feel that they are unable to distinguish between the flood tide and the ebb tide. It seems to me that to join a club in its earliest days and to take part in its formulation is very different from joining the club at a much later stage when its direction and its rules are clearly established.
I am particularly sorry to have to differ from my hon. Friend the Member for Inverness (Mr. Russell Johnston). This is, I believe, the first time that we have ever differed on a major issue before the House, and I greatly regret it on personal grounds. But we are here to say what we think and to express our feelings on this great question.
I cannot share the uncritical enthusiasm and euphoric idealism which colours the tone of what is said by some of my right hon. and hon. Friends when the question of Europe is raised. It seems to me that, if we join now, we join at a time when considerable disabilities will attend this country. In the debate which will range in the country during the coming weeks and months, I shall have a chance to enlarge on the points which I make, points which, as my hon. Friends know, I have been expressing for about 1773 three years. As I see the matter, there are four main objections to our joining the Common Market now.
First, the country is utterly deluding itself in thinking that its lack of economic success arises in the main from its exclusion from a large market in general, or the Common Market in particular. It is argued at length in the White Paper that we have a home market of 55 million, with a possible accretion of 45 million in E.F.T.A., but that if we were to join the Common Market we should have access to 290 million. The argument is developed so as to suggest that the only reason, or the main reason, for our lack of success is failure to get into the Common Market.
It is right, therefore, to look at the markets which are open to us now and to see what measure of success we have achieved in them. We have had access to the greatest expanding market the world has ever known, the market of the developing countries. No market has ever grown at the rate at which the developing countries have developed since the war. Yet, in terms of our share of that market, we have been excluded from it steadily and our position has been eroded by countries in competition with us at exactly the same level. Therefore, it cannot be exclusion from that market which has caused our relative failure.
Next, there is the E.F.T.A., with its market of 100 million people. The E.F.T.A. has not been a failure. Excluding Britain's growth rate from E.F.T.A., the rate of growth of the E.F.T.A. countries is equal to that of the Common Market countries. The standard of living of Sweden, of Switzerland and of Norway has risen at a rate at least the same as that of the Common Market countries. Why, therefore, has Britain not been able to gain from E.F.T.A. what it is said she can gain from the Common Market? That question must be answered.
If we cannot gain from accession to a market of 100 million, why should we think that we shall gain more from accession to a market of 290 million? It seems to me that this question is left unanswered in the White Paper.
In truth, the reasons why Britain has been unable to take advantage of the opportunities open to us have nothing to do with the existence of the Common Market, E.F.T.A. or the developing countries. 1774 They have to do with our old-fashioned industry, with our lack of capital investment, with our failure to create a proper infrastructure in this country, with our constant treatment of the reserve currency rôle of sterling as the sacred cow of the British economy, as it were, with the development of our own industry being constantly sacrificed to it.
On the first argument, therefore, I say that we delude ourselves if we think that that is the main reason why this country has not been able to develop and take advantage of the markets open to it.
I come now to my second objection. Because of the failure of successive Governments, Britain is not organised and has not been prepared by adequate steps to meet the intense competition of the Common Market. It seems to me that, if we are unable to take the fullest benefit from the markets already open to us, we must face the possibility that, although there are wide opportunities within the Common Market, the opportunity facing us, as the right hon. Member for Batter-sea, North (Mr. Jay) made clear, is one of going up or of going down.
British Governments have been negotiating now for nearly 10 years to enter the Common Market, yet none of them have taken the steps which I believe to be essential to put the country on a proper competitive basis. For example, there are at present 800,000 unemployed in Britain. There are 800,000 unoccupied jobs in Western Germany. This is not because of the Market, but because of different organisation. Partly, of course, it stems from the fact of history that West Germany created a modern industrial complex after the war because so much of its industry was destroyed during the war or taken in reparation. But I believe it to be true, nevertheless, that there has been completely inadequate preparation in this country for the entry which we now seek.
Those are general criticisms. As my third objection, I come to a criticism in particular, and here I refer to the remoter regions of Britain. I take my own country of Wales as an example. We are likely to suffer disproportionately because of this lack of preparedness and organisation. Let us take Mid-Wales as an example. Capital investment in my part of the country has virtually dried up 1775 during the past two years ; we had considerable capital investment at one time, but it has been steadily drying up. The regional policy of our country is described in the White Paper—I am simply summarising its sentiments—as not being incompatible with that of the Common Market. That sentiment does not surprise me, because regional policy in this country is becoming non-existent. Our national regional policy is grossly inadequate, and there is nothing in the special regional provisions of the Common Market which will compensate for that. As I understand the conception of regional development in this country, it is to pump capital into development areas such as Mid-Wales to make the most of their economic potential. That is a constructive view of the regions, whereas the Common Market provisions for regional policy seem to me to provide for amelioration, to provide charitable organisations for those badly endowed parts such as Southern Italy.
Fourth, the food and agricultural policy of the Common Market is fantastically protectionist. It will cost much more than is estimated in the White Paper, and it is unlikely to be modified in the foreseeable future. The argument is advanced in the White Paper that food prices in the world generally have come nearer to those obtaining in the Common Market over the past few years. There are special reasons. Everyone with any knowledge of world food prices realises, first, that they are cyclical, and secondly, that in the past two years in particular there has been the maize blight in the United States, which affected a great deal of the crop there and had an enormous effect on grain prices in the world. The third reason why I think that the White Paper expresses a naive hope which will not be realised is that not only has the maize blight largely disappeared but the green revolution is taking place in Asia and other parts of the world, which is likely to have an effect on food prices.
We import 51 per cent. of our food, and the Common Market has a surplus of temperate foodstuffs. When we join she will have access to our market. The whole tendency within the Common Market will be to hang on to that, to hang on to the protective agricultural policy because it will be of immense political significance 1776 within the Common Market. A hope expressed by right hon. and hon. Friends of mine that perhaps by 1980 there will be a great modification of the food policy seems to me entirely naïve. I have never taken the view that the Common Market's agricultural policy will adversely affect the larger farmers in the more favoured parts of Britain, because they will have the kind of protection which they have never had since the days of the Corn Laws, but it will have a very different effect on the small farmers in the less favoured parts of the country. The end result will be the creation within the industrial society of the Common Market of a resentment against a food policy which insists that people pay high prices as compared with world food prices outside. It could build up into the kind of resentment that was experienced here over the Corn Laws, which finally led to their repeal. Everyone knows what a devastating effect that eventually had on Britain's agriculture.
We have all been brainwashed about the advantages of scale, but the lack of health of giants like Lockheeds, Upper Clyde Shipbuilders and Rolls-Royce should have sounded at least a warning note about the results of that brainwashing. The great growth rate and fine living standards enjoyed by countries like Sweden, Switzerland and Norway should put us on our guard against accepting too easily the argument that we have not grown at the same rate as the Common Market countries simply because we have been excluded from the Common Market. The fantastic economic achievements of Japan, with no beneficial terms of entry to any group, is a pointer to the fact that some of the more facile arguments in the White Paper should not be accepted at their face value.
I am not against the Common Market in principle, although I am against some of its protectionist policies very much. We are living in an era which is seeing great changes. The whole of Europe, including countries not within the E.E.C. is tending to come more closely together. That is part of a continuing process, and I do not for a moment accept the argument that this is a now-or-never situation for Britain. It is obvious that France is dying to get us in, if only as a counterweight to Germany, because she realised where the real economic power in Europe lay at the time of the Mark crisis. 1777 It is obvious that further opportunities will occur for us. The economic benefits of the Common Market in the long term could be considerable, but I am not prepared to see people of the less favoured parts of the United Kingdom, the poorer people, pay the very high price in economic and human terms which accession now and on the present terms requires over a very extended medium term.
The benefits of going in are not obvious to me to such an extent that they can overshadow what I think will be the obvious disabilities to people who live in parts of the country like my own.
§ 8.16 p.m.
§ Mr. Kenneth Clarke (Rushcliffe)
I have the honour to be the first speaker on this side of the House to be able to congratulate the hon. Member for Hayes and Harlington (Mr. Sandelson) on his maiden speech. I have the greatest pleasure in congratulating him on his courageous and very powerful contribution. Normally my present position is held by a veteran Member welcoming a newly-arrived Member into this Chamber at the beginning of his political career. When I look at the battle record of the hon. Gentleman I feel a comparative novice in political terms in view of his long and honourable political apprenticeship before he came here. With all the more strength, therefore, do I appreciate the power and courage which his political experience has given to him. I look forward to being able to debate with him again many times in the future.
I was particularly glad to be able to welcome the hon. Gentleman after hearing him explain his views on Europe. Except when he went with such passion into his vision of a Socialist Europe, I found that I could so nearly agree.
I am delighted to have my belief confirmed that although the hon. Gentleman won a smashing victory, as other Labour candidates have in recent by-elections, my Government's present unpopularity, which is undoubted, clearly is not related to the Common Market issue to anything like the extent claimed and hoped for by the anti-Marketeers. Although I am sorry that the hon. Gentleman should secure such a victory over my party, I am delighted to hear that the electors of Hayes and Harling- 1778 ton voted on other matters and elected someone who clearly believes very strongly in the European cause.
When the hon. Gentleman dealt with Europe he dealt with the Community's future as I should like to deal with it. He spoke about how he saw it developing. Questions have been asked about this by my right hon. Friend the Member for Taunton (Mr. du Cann), and we have heard my hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) on the question. This is the critical matter, because the British public are worried about the terms to some extent and need to have their understanding assisted by our debates. They are interested in the comparisons made between us and the Community, but they are most interested to know where we and the Community of the Ten will go, to know about many of the long-term commitments we are entering into, the sort of institution we are going into, and what sort of future it holds for Britain.
We are entitled to look at the past of the Community in deciding that. Its past certainly demonstrates that the member countries took the right decision 12 years ago and we took the wrong one. They have benefited increasingly ever since. We are also entitled to look at the present and come to the conclusion that on the present evidence they are enjoying higher living standards than we are, and have a growing political influence in the world at a time when ours still seems to be declining.
That is the record of the past 12 years, but the main question is the future and the development of the Community. The point that I am sure we all appreciate, whether we are for or against Europe, is that the Community is evolving and steadily advancing. It is still changing very much in character and has a long way to go before it reaches fruition.
The process of change and evolution is likely to accelerate over the next few years, not decelerate, and it will accelerate whether we join or not. So far, the Six have only created a common external tariff, a tariff-free zone for industrial goods and the common agricultural policy. But much more is to come. Indeed, some of the better developments are still to come. I agree to some extent, although I profoundly disagreed with his conclusions, with what my right hon. 1779 Friend the Member for Taunton said about the need for answers to some of his questions about what sort of community we are going to have and where we are going. I regret that paragraph 28 and its associated paragraphs on the future development of the Community are somewhat thin. What I see happening over the next few years are important developments in many directions within the Community.
First, I believe that they will go beyond the present stage of the removal of internal tariffs and the creation of a tariff-free zone to an ever-more rapid progress in the removal of the non-tariff barriers to trade which, in modern trading circumstances, are at least as important as the sheer removal of tariffs in generating trade between countries and greater economic growth. Despite the claim that we cannot expect a growth in internal trade or an increased rate of growth to the same extent as Europeans had after 1958 because now we have lower external tariffs following the Kennedy Round, I believe that we shall find that a steady removal of the non-tariff barriers to trade and the steady development of the Common Market in a much wider way will compensate for this and be a stimulus to trade between countries and a stimulus to the rates of growth of those countries which decide to become members. I believe that this growth is likely to become at least as great in future and might be greater.
I see a Europe committed to going on to the development of economic and monetary union to a much greater extent than now. I do not believe that the Werner Plan will be the way that is pursued. I believe that our accession will ensure that the techniques of going forward on such a course will be fundamentally reappraised. But this will be in our interest, because it will be developing still further the potentials of a market of this size and of the resources of the group, in both steadily liberalising its economic policy and removing the barriers to trade.
To me, the most important are the political developments which are bound to take place. My right hon. Friend the Prime Minister referred to this, as he has always done in all his speeches on the 1780 Common Market, making no secret of the fact that an increasingly united Europe is one in which we see for ourselves a target for the future and a place where we can increase our influence and position in the world. I believe that once we become a member—as I believe we will—we should press on to develop what is now only the d'Avignon procedure for regular consultations between Foreign Ministers to a much stronger system of consultation towards the development of common foreign policies in those many areas of the world where we have interests in common with our neighbours.
The defence aspects are also important and there will be development of a European defence policy over the next few years. I do not accept what the hon. and learned Member for Northampton (Mr. Paget) said—that we must persuade the Americans to stay in Europe in some peculiar way by opting out of joining the Community. I believe that there is real danger that the Americans will withdraw from their old close involvement with Europe and the stationing of large numbers of troops over the next few years because of domestic American pressures. I believe that this will happen regardless of what we do.
This increase in inward-looking isolationism to some extent by Americans makes it imperative for us and other Europeans to look at ways of compensating by developing much more European contribution to N.A.T.O. and our own defence. We have to respond to the American demand for burden-sharing. We must not break off our relationship with America but ensure that it remains on a healthy footing by strengthening the European arm of N.A.T.O. to compensate for the possibility of some American withdrawal from their very expansive commitment to Europe. Anglo-French nuclear collaboration must be considered as a policy. We should also consider a European common procurement policy for aircraft and weapons built in Europe as a step forward which should be taken. But none of these steps in defence can be taken unless we have the necessary development of political unity and common political aims which involvement in the Common Market will bring.
I do not have time to cover other developments which are going to take 1781 place in the Community. My right hon. Friend the Foreign Secretary has dealt with a large number of other agreements with other countries to which we would become party automatically. Our old dependencies in Africa and the Caribbean will become associated under the Yaoundê and Arusha agreements for States. Clearly, also, other members of E.F.T.A. which have decided not to join will be negotiating their own links with the Common Market. We shall share access to these markets, not lose it.
This new Europe will have enormous international preferential trading arrangements of one sort and another. It will be a very great and important power grouping in the world. Economic and monetary union, political development, a common foreign policy, a defence policy, international contacts—all this lies in the future of the Community. This is not just visionary politics or a dream world. The Europeans have found for themselves that this is hard, practical politics, and these developments of the Community are going to happen within the Six if we decide not to join or within the Community of Ten if we do join.
From this I draw two conclusions. The first is that, with all these developments lying ahead of us, now is the time for this country to join and it is probably the last time we shall have a realistic opportunity of being able to join. To some extent they have waited for us. As a result of the French veto, our friends in Europe blocked some of these developments in the hope that they could still get enlargement of the Community before the real development of the Community took place. Now there is no French veto, and if we do not join it will be because we had a sudden panic and decided that we did not have the courage. If that happens, they will wait for us no longer. If Britain refuses to join Europe, then in the "spirit of the Hague" Europe will carry on making these developments without us.
It is no good people on either side of the argument thinking that we can cavil about the terms in the belief that two or three years later we might again pick up a negotiating hand and get slightly better terms and the clarification of details. In two or three years' time developments will have taken place towards economic and monetary union and 1782 towards the development of new institutions which will make our present problems of integrating with the Community seem as nothing compared with the problems of integrating with a Community that has made considerable progress.
Paragraph 30 of the White Paper contains a brief reference to Britain as a member playing a full and equal part in devising whatever additions to the institutional framework are required. I hope that implies a full-blooded commitment to playing our part in developing these institutions, and a full-blooded realisation that we are joining a Community that has a long way to go.
We should not look at these developments in the way that my right hon. Friend the Member for Taunton did, asking detailed questions about the precise shape of institutions 10 or 20 years ahead. We must look instead at the way the Community has proved to be flexible in response to national interests, at the developing regardless of our interests the how, with that flexibility, exciting future developments can be shaped with our playing a part inside. If we now make it a Community of Ten, instead of developing regardless of our interests, the Community will develop to accommodate British interests and will bear the British stamp. It would be an unusual British politician who did not believe that we shall take to Europe our political and diplomatic skills and political experience. In the evolution of political and economic institutions it is inevitable that the British influence will show up very strongly in the Community of Ten that develops.
I believe that all this is to come, and that the British public should be fully informed of its coming, so that they can make the decision with their eyes open in October when, as I think we shall, we decide to join the Community. A considerable and powerful institution will develop which will increase our political influence and the standard of living of our peoples. The best is to come, and I strongly believe that the country should grasp this last opportunity of partaking of that best.
§ 8.30 p.m.
§ Mr. Stanley Orme (Salford, West)
I am the first Member on this side of the House to speak who voted against the 1783 application made by the Labour Government in 1967. I remember that occasion very well ; we had a nine-line Whip. If any hon. Gentlemen opposite are feeling that it is warm in the kitchen at present, just let them wait until they are popped in the oven in October. I opposed that application out of conviction, as did many of my hon. Friends. My opposition is a root and branch opposition to the Treaty of Rome. One could argue about the terms and conditions that have been brought back by the Government negotiator and whether or not they are acceptable to hon. Members on either side of the House, but the important thing is whether Britain's place is within the concept of the Treaty of Rome, with all the political issues that involves.
The question is not whether or not we go into Europe. We are already in Europe. The question is not whether we are opposed to Europe. Those of us who voted against the application like to feel that we are internationalists, not little Englanders. Europe is bigger than the Six or an enlarged Community of eight, nine or ten ; it consists of 26 countries. What matters is the decisions which the Six had already taken in 1967 and have taken since, and whether or not Britain has the answers to the economic and political problems that face her. I believe that Britain can work towards those answers.
On this issue I am neither defensive nor pessimistic. Given the right policy, Britain can obtain the growth that is needed, and the political rôle Britain can play in the second part of the 20th century is quite different from what has gone before. We shall never again be a first-class world military Power. I do not think that there was anything very marvellous about that when we were. We are now living in a much more realistic world in which people are demanding better conditions, a place in the sun and a higher standard of living, and we can work towards and achieve these better conditions.
The Community of Six is neither a political nor an economic paradise. This does not mean that I am opposed to the Six, I am just assessing the situation and making a judgment. If one says that Austria has a higher rate of growth than many of the Six, one is not claiming 1784 that Austria is a political paradise in which one wants to live. It just means that there are other ways of achieving what one wants.
I should like to take up the theme of the speech of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins). His was the most persuasive, articulate, pro-Market speech. He put the case probably a lot better than the Prime Minister did yesterday. His argument needs a political answer if one is opposed to it. His belief that we can obtain growth in an enlarged Community, by the removal of tariff barriers, and that growth will give us the economic freedom to achieve our objectives is at the basis of the economic case that he put. I do not think I am misrepresenting him.
Let us consider the mystical growth which many countries of the Six have had and which has been denied to Britain. After the war and up to 1958, growth in the Six was, on average, 5.1 per cent. Since then, it has been about 5.3 per cent. In other words, the Community has not necessarily had a greater growth potential ; they have maintained their growth. However, I recognise that they have had something which, because of our unique position both militarily and financially, we unfortunately have not been able to achieve. But I believe that it is achievable in Britain.
I do not accept the pessimistic argument that a country of 55 million people, with their skill, ability, educational background and technological achievements, cannot release forces which can give them this growth. In the E.E.C. there are countries like Germany and Italy which were devastated during the war, whose old industries were completely destroyed and rebuilt mainly with American Marshall Aid. Relieved of arms expenditure and overseas dependencies, they have managed to achieve economic growth, although in Western Germany it has levelled out to a great extent and over a couple of years dropped considerably. The Six are in a unique political and economic situation.
Up to 1945, Britain was still the second major Power in the world, with bases and forces overseas and sterling as the world's second major reserve currency. At the same time, we were a banker 1785 which made us vulnerable to investment and the removal of investment from this country—the problem which created all the difficulties for the Labour Government during their six years of office. Many of us on this side of the House advocated withdrawal from east of Suez and the reduction of our military expenditure much sooner than the Labour Government attempted to do it. My right hon. Friend the Member for Birkenhead (Mr. Dell) may share some of my views on this matter. But we finally got round it.
I agree with my right hon. Friend the Member for Stechford ; I am not bound to the idea of maintaining sterling as a reserve currency. I want to see it phased out and a more sensible form of currency introduced which will be of benefit to the countries in the Six, to those outside it, and to Britain as well. To phase out sterling as a reserve currency, does not necessarily entail joining the E.E.C.
My right hon. Friend the Member for Stechford referred to the benefits to be obtained from growth. These things are difficult to quantify, as anybody who reads the White Paper will appreciate. Everybody laughed when the Labour Government's White Paper gave a variation of £100 million to £1,100 million. Everybody said that that was a ridiculous range and the Government should be able to make a more accurate estimate of the cost involved. But this Government have not even attempted such a calculation in their White Paper.
It was significant that this afternoon my right hon. Friend did not spend any time at all on the value-added tax. He did not deal with the issue of selectivity versus universality.
§ Mr. Orme
It is not, because V.A.T. means switching to a selective basis, in the same way as the Government are doing with regard to the social services and the means test concept, which I totally reject. V.A.T. will affect all sorts of commodities, and not least food.
Very little mention has been made of the common agricultural policy. The great difficulty when discussing this policy is that of finding somebody who supports this concept. We have had a long series of meetings in the Parliamentary Labour 1786 Party—and first-class debates they were—but I have not heard an advocate of entry into the E.E.C. defend the C.A.P. They all say that it is a bad policy, that it ought to be changed, and that we shall try to change it when we get into the Community. It is significant to note, however, that last year the French slammed the door on the possibility of that being done because, before agreeing to the terms for negotiation, the C.A.P. was finalised, and the French made it quite clear that they were in a position to impose the veto to prevent any alteration in the policy for a considerable time. The C.A.P. will subsidise inefficient agriculture in Europe, and it is that which will make it so difficult for many people here to carry the burden of going into the Community.
Nobody denies that in the short-term the burdens will be difficult to bear, that we shall have to pay a heavy price for entry. It is said that the advantages of entry will come later, but in the short-term there will be an increase in prices which will affect the standard of living of our people here. In my opinion many old-age pensioners will never see the benefits, if there are any, of entry into the E.E.C. In the main it will be the working people of this country who will have to carry the heavy burdens involved, and whatever action the Government take to relieve those burdens, by increasing benefits, or pensions, there is no doubt that millions of people will still feel them.
I am waiting for the day when wage earners get the extra £7 a week, the sum by which they are supposed to be lagging behind workers in the E.E.C. countries. Having discussed prices and incomes at great length, under two Governments, and having considered the problems of industrial expansion and also the problems which the oncosts of wages are supposed to create, I take it that when the extra costs of going into the E.E.C. are felt the Government will agree that workers must have an increase in wages to offset those extra costs. Will they say that? That question must be answered, because the issue poses real problems.
1 want to deal with the approach that we should make to finding an answer to Britain's problems. We have discussed these issues in the Labour movement ; we did so at the Labour Party conference 1787 on Saturday. There must be much more direct Government intervention in our economy. Many aspects of our mixed economy will have to be tackled if we are to plan it in a way that will make it viable.
Socialism is not a slogan ; it is a reality. I wonder whether, under Article 92 of the Treaty of Rome, it could be interpreted as distorting market forces if sections of the manufacturing industries were brought under public ownership. In the case of electricity and transport no question of distorting market forces arises.
My hon. Friends often remind me that we must look to our European Socialist friends and the European trade union movement—and that they want us in. I have a great deal of affection for many European Socialists. The Ostpolitik of Willy Brandt has been a great step forward, but when I say that I do not denigrate Norman Kirk of New Zealand. Internationalism and Socialism go far beyond Europe.
We are divided on the fundamental argument about the best way to resolve these questions. In the six years of the Labour Government we touched only on the periphery of these matters ; we never grasped the nettle. We will have to face the situation and decide whether or not, in a modern competitive world. Britain can survive, and whether it might not be possible for her to develop an economy on the lines of some of the smaller countries, such as Austria or Sweden, or Japan in the Far East.
I do not advocate the economic and political system of Japan, but if she can obtain that degree of growth in that type of country, we, with a democratic Socialist Government, could obtain the same. [Laughter.] I leave hon. Members opposite to laugh. I make no apologies for what I am saying, because these points of view should be expressed. They exist in the British trade union and Labour movements, and it is right that they should be expressed in this debate. I am speaking now as a Socialist who feels that there are democratic Socialist answers to our problems. If the Government introduce the measures that I am advocating I can be proved wrong if they fail ; but I can also be proved correct.
1788 There is a political argument he put forward on the question of going into Europe. There can be no reality about the argument unless we accept the fact that in the next 10 years there will be a move toward political unity, and that means only one thing. Those of my hon. Friends who disagree with me about entry to the E.E.C. will acknowledge that such a move must be towards a confederation of federal States. There would have to be a confederal Parliament, with directly elected representatives. How else will the bureaucracy be controlled? If it is bad with six, what will happen with eight, nine or ten countries? That is not the answer. It is a bit like the merger madness of recent years. Large units are not always successful. Fully expanded and competitive medium-sized firms have gone to the wall.
I am in favour of the United Nations, of lowering tariff barriers and of some economic co-operation, whether with the Six or with the E.F.T.A. countries. I want to see a European security pact to reduce the tension between N.A.T.O. and the Warsaw Pact. I do not want a nuclear force built up in this concept of Europe. Every nation, large or small, in Europe must be guaranteed its security. I do not want a Greek or Czechoslovak situation. I want the sort of society in which we can help one another, through economic competitiveness, wherever we live.
This is an important issue. I do not see how the British people can be consulted. The arm-twisting has already started. The pressure is on for Members of Parliament to express a point of view. I have not come across these problems on this side, but I do know that they exist—[Laughter.] I do not think that anyone will try to twist my arm.
The British people must be consulted. No doubt my right hon. Friend the Member for Bristol, South-East (Mr. Benn) will be giving us his views, which I respect, about a referendum. I do not think that that is practicable. It can only be done by a General Election when the two parties have opposite views. We were told in 1967 that the great debate should start. Every time it started, someone tried to shut it down. We must make our voices heard.
The British people can only express their view through their vote. In October, 1789 the Labour Party will have taken a formal decision against entry—
§ Mr. Orme
I am not twisting arms. I am just saying that they will have taken a decision. That is not arm-twisting but a democratic process. The issues will be much clearer. We must be as firm as possible. This does not depend on one vote on 28th October. There is a long hot road following that. This House can still achieve the result that I hope to see.
§ 8.55 p.m.
§ Mr. John Farr (Harborough)
It seems that about the only way in which we will achieve any unanimity in this House is in congratulating the hon. Member for Hayes and Harlington (Mr. Sandelson) on such a splendid speech. It is the only thing about which all hon. Members are unanimous. A short while ago I had the strange experience of hearing my colleagues cheering to the echo a Labour ex-Chancellor of the Exchequer. We have to cast our minds back four or five years to the days of the Bill to reform the House of Lords to find such inter-party feeling as exists today.
I mention the Lords Reform Bill because back benchers remember that Bill with great interest. We had the Front Benches on both sides united on a course which they thought was best suited to amend the constitutional position of the House of Lords and it was agreed as a fait accompli, without much consultation with back benchers. After many days of trying to push it through the House of Commons the combined Front Benches gave up and recognised that the wishes of the majority of the House, in this instance the back benches, ought to predominate. The attempt to reform the House of Lords was abandoned.
It may be significant that this instance should cross my mind at this moment, now that we are being coerced, certainly by my Front Bench and by a good many Members on the Front Bench opposite, to accept a headlong course into Europe.
How do we approach this problem? We have had some excellent speeches and many people have approached it in different ways. My right hon. Friend the Member for Kingston-upon-Thames 1790 (Mr. Boyd-Carpenter) took a broad spectrum and decided that there were two or three points about which he wanted information. The hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) took up more time than I will take, speaking for half an hour on matters of great detail. The hon. and learned Member for Northampton (Mr. Paget) went back to the Great War and beyond and provided his answer from the story of history. We all took a different approach.
The first point I want to make is that we have a different way of approaching this problem because we have lived with it for a long time. We have not been blind to the advances a united Europe has made for 10 years. We were not blind to the project when it was begun 20 or more years ago. We have lived with it for a long time and have our views. What is wrong is that any Government should try to encourage—by propaganda and by expending vast sums on publicity—the people of this country who have already made up their minds to change their minds. The British people have never been better-educated and never better-informed than in the last 15 or 20 years. I think that for any Government to promote a sort of Omo style of publicity stunt and expect in a couple of months by this expenditure of £600,000 to achieve a change of view is a disgraceful course of conduct.
I have been trying to understand why the British people have expressed the opinion which they have. They have not been helped to form a view contrary to joining the Market. All the national dailies except one are in favour of this country joining Europe. One cannot say that television and radio are biased against our entry. Indeed, they have made up their mind, having exercised their judgment in the matter.
Nevertheless, public opinion is emphatically against Britain joining the E.E.C. and I deplore the Government's campaign to change the minds of the British people in this matter. Outside the Community we are doing very well—[Interruption.]—as the British people realise, and we are likely to do well in future.
We are the centre of a group of 100 million people in E.F.T.A. and we have trading arrangements with a worldwide 1791 Commonwealth. We have a high and satisfactory annual balance of payments, the £ has never been stronger and even our exports to the E.E.C. countries are climbing steadily. What is the point, therefore, of seeking to join? I find it difficult to support any of the reasons put forward by the pro-Marketeers.
Hon. Members who advocate our joining must bear in mind the crippling financial cost which is likely to fall on us, if we enter the E.E.C, because of another devaluation of the £. They must take into account the duty that will be placed on Commonwealth goods coming here. They will be treated like foreign goods. Although we have temporary arrangements to safeguard New Zealand's produce and Commonwealth sugar, there is no guarantee that these arrangements will continue after 1974.
It is no use supporters of our entry saying that we will be able to influence Community decisions because nine other nations will be involved. Our vote will be no stronger than that of, say, Italy, and Italy and Luxembourg together will be able to outvote us in any matter, including the continuance of the New Zealand trading agreement and the Commonwealth Sugar Agreement.
I am fearful of what will happen to our invisible trade. At present we have a surplus on invisibles and the Labour Government found that although we could frequently have a deficit on visible trading, we could at the same time regularly have a surplus on invisible trade. At present this surplus is running at about £600 million, made up of a variety of factors, including banking, shipping and insurance receipts.
If we join the E.E.C. our receipts from invisibles will largely disappear. It stands to reason that if we will be importing larger quantities of goods from across the Channel rather than from the various countries of the Commonwealth, less shipping, banking and insurance will be involved, with the result that our invisible trade will show a steady decline.
I regret that the hon. Member for Berwick and East Lothian (Mr. Mackintosh) is not in his place, because I wanted to comment on some of his remarks last night about agriculture. He welcomed Britain's approach to the Community and thought that agriculture would do well 1792 out of it. I believe that British farmers, who are probably the most advanced in Europe, if not in the world, will have to mark time for a decade or more while, at our expense, their European counterparts catch up with their standard.
I make this statement because the average size of the European farm is about 20 acres while that of a farm here is about 100 acres. The average size of all our enterprises is relatively bigger. Under the second Mansholt Plan it is intended that the vast proportion of the receipts going into the common agricultural fund shall be used to buy up smaller European farms, amalgamate them and integrate them into larger units. That will take place while we mark time for a decade or two ; and largely at our expense.
My second reason for disliking this course for agriculture relates to our scope for agricultural production today. At the moment we grow about 50 per cent. of what we consume, but we grow only 70 per cent. of what we are able to grow. If we go into the Community of Ten, instead of growing only 70 per cent. of what we can grow, so leaving scope for a 30 per cent. expansion, we shall be members of a Community which will in many products be in surplus and will, overall, be self-sufficient to the extent of well over 90 per cent. It does not need a mathematical genius to appreciate the vast difference between our scope for expansion in such commodities as sugar, butter, beef and meat which is, at the moment, the difference between 70 per cent. and 100 per cent., and the scope for expansion in Europe represented by the difference between 92 per cent. and 100 per cent. The Community has already a surplus of half a million tons in butter, and sugar and other commodities.
We have had thrown at us from time to time, particularly from the Opposition Front Bench yesterday and today, how much better off they are in Europe. We are told that their wages are higher, that they work fewer hours, that their holidays are longer—that they get more money for doing less—and that it is unfortunate that we have not been members of the Community for years. So the story goes, but these figures can be twisted or bent.
I am sure that the House will realise that if an hon. Member were to say 1793 that the average wage in France was, say, £30 a week, it would not have much effect, because one must also take into account the comparative cost of living there and here. The proper and fair way of assessing the situation is to ask how long a man has to work to earn enough to buy a litre of milk, a kilogramme of cheese and a kilogramme of butter in the Six and in this country today. In Germany, he must work 180 minutes for those three staple commodities ; in Belguim and Holland, about 160 minutes ; in France—the lowest—102 minutes. In this country today for those three staple commodities a man must work 58 minutes. This comparison gives the lie to those who say that those in the Community are better off, and get more money for doing less work.
If we go into the E.E.C. I think that soon we shall end up by running the risk of becoming an offshore island of a European Continent including a group of 10 nations. The geographical and power centre of the group of 10 will be in Paris or Brussels ; and I fear that if we go into Europe on the terms at present envisaged, in a few years' time the United Kingdom will have as much importance to the 10 as the Isle of Wight has to Britain today.
§ 9.10 p.m.
§ Mr. John Roper (Farnworth)
I am in some difficulty, for the speeches of the last two hon. Members have provoked me to such an extent that I should exceed the limited number of minutes which I wish to take up if I were to reply to all the points they made. However, I am at least provoked sufficiently to reply to one or two of the points made by the hon. Member for Harborough (Mr. Farr) and my hon. Friend the Member for Salford, West (Mr. Orme), whose speech greatly impressed me.
I wondered whether the hon. Member for Harborough had seen the results which were passed to me as I entered the Chamber of the I.T.N, poll which has come out this evening and, I understand, shows a rather significant shift in public opinion to 43 per cent. now being against and 42 per cent. being in favour. We on this side know that opinion polls move rather fast. Over the last three or four weeks there seem to have been rather remarkable movements in opinion polls.
1794 The hon. Member for Harborough said too much when he said that public opinion had made up its mind on this issue. I believe that the purpose of this debate, as of that in the country, is to ensure that the process of formulating public opinion and making up its mind will continue for some time until we make our decision in October.
I was also interested in the hon. Gentleman's point about our invisible earnings, which he quoted as being £600 million and which he said would fall. I was interested to see in the financial Press recently a statement to the effect that the City Committee on Invisibles expects to see an increase in our invisible earnings once we are a member of the Common Market.
As to the hon. Gentleman's comparisons on how long it took workers in certain countries to earn certain items of food, I would refer him to an interesting publication of the Union Bank of Switzerland, which is completely impartial and which has compared earnings of primary school teachers, bus drivers, auto mechanics, bank employees, and secretaries in 17 cities in the Six and elsewhere and has carefully compared the costs of food and other things in those countries. This might be a rather more scientific way of approaching the matter than the statistics which the hon. Gentleman quoted.
More seriously, I thought that the remarks of my hon. Friend the Member for Salford, West were very important and significant. I do not think that anybody who advocates our entry into the Community is saying that we could not have faster growth outside the Community. It is possible for this economy to be run at a faster rate outside the Community. Nor are we saying that it is impossible for us to phase out our sterling responsibilities outside the Community.
On both of these vital issues the argument which is being deployed is that we would have a better chance of faster growth within the Community, because the access to larger and dynamic markets would have a stimulating effect in increasing investment—both the quality and the quantity of investment—and maintaining a higher level of investment.
My hon. Friend and many other hon. Members have spoken about the common 1795 agricultural policy. Some of these hon. Members have referred to the political speeches of the President of France. In considering French agriculture it might be more interesting to turn to the debates which recently took place in the French National Assembly on the French Sixth Plan and to read the document of the French Sixth Plan, which shows that over the period 1968–75 the French expect one-quarter of the agricultural labour force to leave agriculture, one-quarter having already left during the last plan period. The C.A.P. will see a rapid structural change in European agriculture, as my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) pointed out last night.
My hon. Friend the Member for Sal-ford, West spoke about the move towards political unity and political confederation. As one who advocates our entry, I am not ashamed to say that I also advocate development towards political unity because, as a Socialist, I can see little point in having a common economy without having common governmental institutions to control that economy in the interests of the people, not only to control the bureaucracy to which my hon. Friend referred, but also to control the multinational companies which operate in that economy.
I speak as one of those who believe firmly that Britain should become a member of European Community and who believe that on balance the terms of entry laid out in the White Paper provide a possible basis for our entry.
There are those who say that this is an issue above party politics. I disagree wholeheartedly. Just because there are members of both the major political parties who are in favour and others in both parties who are against, all for honourable reasons, it is assumed that those in favour in both parties have the same motivation and that those against have the same reasons. I do not see it like that. I am not in favour of entering into the E.E.C. for a set of abstract principles which transend party divisions. I am in favour because I believe that we shall be able to do those things which I came into the Labour Party to do better from within the European Community than we can from outside it.
1796 I am in the Labour Party because I want to see a better standard of living for the people of this country, and particularly the working people. I believe that we have a better chance of doing that inside the Community than outside it. I am in the Labour Party because I want to see greater social expenditure to redress the social balance, to provide more resources for the new housing, new schools and new hospitals which people in my constituency and others need so badly, to enable us to increase pensions so that old age can be lived in dignity and to tackle the remaining problems of poverty among large families in the community.
That social expenditure can come in two ways, either from higher rates of taxes or from faster economic growth. We all know that higher taxes are on the whole politically unpopular. If, therefore, I want to see this higher social expenditure, I must advocate faster economic growth. I believe that we are more likely to attain it within the Community than outside it.
I am in the Labour Party because I want to see a greater degree of social control of industry in our economy. I want to see a society in which industry serves the community rather than vice versa. In a world in which industry already operates on a multi-national basis, I believe that there are better chances of ensuring that industry is responsive to society and trade unions are able to operate against multi-national companies if we have membership of the Community.
But I am in the Labour Party because I am an internationalist, because my idea of the brotherhood of man, for which my party stands, is not limited by national frontiers. This does not mean either that it should be limited by the frontiers of the Community. We have a continuing responsibility for the two-thirds of the world's population in the developing countries. I have, therefore, been particularly concerned at the suggestion that our membership of the E.E.C. would have dire consequences for the third world.
The view has been put forward on occasions that the Six is an inward-looking rich man's club which will corrupt us into doing less for the developing world than we are doing now. I suspect that that conclusion is reached mistakenly 1797 and because people tend to compare the E.E.C.'s performance, both in trade and in aid, not with the United Kingdom's performance, but with some ideal. Clearly, the Community's performance, both in aid and in trade, is not ideal, but it can be argued that within the Community Britain is more likely to have a better policy towards the third world than she would have outside it.
Other hon. Members have mentioned that the Community countries provide more aid than is provided by Britain, well over the 1 per cent. target set by the United Nations, and that the Community's aid to poor countries has grown by 85 per cent. during the last 10 years whereas on the same basis ours has risen by only 6 per cent. More important perhaps, all the countries in the Community except Italy have done what this country has not done. They have accepted the second target set by the United Nations, that a target of 0.7 per cent. of their G.N.P. should go as official aid from their countries to the developing countries.
There have been references to the position of India. I share the concern of those hon. Members who spoke yesterday about the problem of India. It is worth remembering that West Germany, because of her greater resources, has been able to give more official aid to India and Pakistan over the last 10 years than we in Britain have been able to do. It is a myth that the Community aid goes only to former French colonies in Africa. It may be argued that if only we had had more growth and had not had economic difficulties we would have given as much aid as other people. If I am right that we would have faster growth within the E.E.C., this would seem to me yet a further argument for entry into the Community.
The question of aid is only one part of a strategy to deal with the problems of developing countries. It is equally, if not more, important that they should have trading opportunities with the developed countries. It is sometimes suggested that although the Community countries have given aid, they have not offered sufficient trading opportunities. The evidence of this, so far as the existing policies of the E.E.C. are concerned, is mixed. In the past the Community has been more restrictive on imports of manufactured 1798 products and particularly of textiles, as we in Lancashire know only too well. But as a market for the exports of developing countries it has become increasingly important. Whereas in 1959 the Community countries took only 24 per cent. of the developing countries' exports, they now take 27 per cent. We were able to take 15½ per cent. of the developing countries' exports in 1959 ; 10 years later we were taking only 11 per cent. While their market for the developing countries grew, ours shrank.
It has been suggested that this trade is only in raw materials. But the figures must be examined. In 1959 we and the Community were importing approximately equal quantities of manufactured goods from the developing countries. We imported 400 million dollars' worth while they imported 552 million dollars' worth. In 10 years their imports have grown to 2,234 million dollars while ours have reached only 943 million dollars.
Much is made of the adverse effects of the common agricultural policy on the developing countries' food exports to the Six. But again the figures must be examined. If we look at the food imports of the Six from the developing countries over the last 10 years we find that theirs grew by 70 per cent., while our food imports from developing countries fell by 0.2 per cent. over the same period.
The important thing is not necessarily the past. It is the future attitudes of the Community and of ourselves that are important. Here the Community has already introduced its generalised preference offer, while we are introducing a textile tariff in January. As a Lancashire Member, I am not arguing at this stage against that tariff, but its imposition does not help us to plead that we have a much more liberal position than the Community. There is nothing, unfortunately, in the White Paper on the basis on which the Community's generalised preference scheme will be harmonised with our own, and this presents a number of problems. In particular, the limitation in its scheme that no single country may export more than 50 per cent. of the quota needs to be examined, particularly in the case of India, if our scheme is harmonised with its. Nor is there anything in the White Paper about the common textile policy. I believe that we should have an answer from the Secretary of State for Trade and 1799 Industry as to what harmonisation of textile policy is to be introduced and when a statement is to be made about it.
No one would claim that the Community is perfect in its treatment of the developing countries, but my view is that this country with a stagnant economy is always more likely to be more protective and more defensive against imports from the developing countries than it would be with a growing economy. If, as I believe, we can achieve a faster rate of growth within the Community, this will enable us to carry out the structural changes in our own industry which will in turn permit a more liberal attitude towards trade with the developing countries, and this means that British entry will clearly be in the interests not only of Britain and the Community but of the third world as well.
§ 9.25 p.m.
§ Sir Fitzroy Maclean (Bute and North Ayrshire)
This debate is to some extent an occasion for personal statements of views, and we have listened to an interesting and, I am sure, sincere statement from the hon. Member for Farnworth (Mr. Roper). My own position has always been that we should go into the Common Market if the terms offered were good enough and if on the day the advantages could fairly be said to outweigh the disadvantages.
Holding that view, I was in the best of company, with the Prime Minister, the Leader and Deputy Leader of the Opposition, the Leader of the Liberal Party—I had it in mind to add the Deputy Leader, but I believe that the Liberal Party does not have one, perhaps a wise precaution—as well as, as the 1967 vote showed, the vast majority of right hon. and hon. Members. On the other side, those who would not go in whatever the terms, were the British Communist Party, the Scottish National Party the right hon. Member for Battersea, North (Mr. Jay), my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), and his heavenly twin, if I may so call her, the lion. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short), to mention only a few in a rather strangely assorted group.
For those of us who made our agreement dependent on the terms offered, as most of us did, the moment of truth has arrived. We know as far as we can 1800 reasonably expect to know what terms have been obtained and what the implications of entry are likely to be. The time has come for us to say whether we accept them or not, bearing in mind that another such opportunity is unlikely to occur.
Speaking for myself, it seems clear that the terms which our negotiators have succeeded in obtaining—with or without the benefit of coffee and cognac—are as good as, or better than, any that we could reasonably have hoped to obtain. I am reinforced in that view by the firm reaction of the right hon. Gentleman the Member for Dundee, East (Mr. George Thomson) and others of his right hon. Friends who should equally know what they are talking about.
What is more, it seems to me—I do not wish to detract from my right hon. and learned Friend's achievement in any way—that by agreeing to such terms the Six have shown that they want us in. I think that this augurs well for the success of the whole venture, for, like any other alliance in history, such a venture can succeed and endure only if all the partners to it are genuinely convinced that it corresponds to their best interests.
§ Mr. Michael Foot (Ebbw Vale)
The hon. Gentleman has said that he agrees with my right hon. Friend the Member for Dundee, East (Mr. George Thomson). Will he give his view about the speech, the most remarkable speech which the House has heard today, of my right hon. Friend the Member for Battersea, North (Mr. Jay)? Does he agree that those figures are correct, does he think that they should be referred to a Select Committee, or how does he judge them? If he thinks that they are incorrect, will he say in which particulars he believes them to be incorrect?
§ Sir F. Maclean
Both individually and collectively, we have been urged by Mr. Speaker not to take up more of the time of the House than we need. Therefore, although it is tempting to do so, I shall not take up the hon. Gentleman's challenge.
§ Mr. Foot rose—
§ Sir F. Maclean
I listened with even more interest than I did to the speech of the right hon. Member for Battersea, North to the speech of the right hon. 1801 Member for Birmingham, Stechford (Mr. Roy Jenkins), who I thought dealt perfectly well with all those questions. If the hon. Gentleman will not listen to the speeches from the Government Front Bench, he should at least listen to those from his own.
§ Mr. Foot
The House of Commons is still a debating Chamber. I was asking the hon. Gentleman, irrespective of the views of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) or anyone else, whether he would give his view on the figures presented to the House by my right hon. Friend the Member for Battersea, North. Will he be good enough to give us his view on that matter?
§ Sir F. Maclean
One hon. Member has already said that figures can be twisted and bent. It would be fruitless for me to enter into a long and detailed discussion on those lines. I should like to be able to develop my own arguments in my own way, as the right hon. Member for Battersea, North did at considerable length.
People say that it would have been better if we had gone into Europe sooner, at the outset. I think that logically it is quite possible to argue that. We should have got in on the ground floor and had a chance to mould European institutions to suit ourselves, as I hope we shall have in the future. But I am not convinced that at that time, 10 or 15 years ago, or indeed at any time during the intervening period, the moment was ripe, that we were really ready for Europe or Europe for us. These things are not so much a matter of logic as of climate. Right up until a couple of years ago there were political and economic and, above all, psychological obstacles that still had to be overcome before we could be ready for Europe or Europe ready for us.
In this country many of us needed to be satisfied that there was no preferable alternative. Equally, on the European side there were those who viewed the idea of our accession to the E.E.C. with misgivings, who doubted the seriousness of our intentions, or feared that we would simply act as a kind of Trojan horse for the Americans. But now it seems fairly evident that the Governments of the Six have overcome any doubts that they may have had. The terms they have agreed 1802 to and their general attitude towards us show that they want us in, and now it is our turn to consider the proposition being put to us.
§ Sir F. Maclean
If the hon. Gentleman will not even agree that we should consider the proposition, he needs his own head examined.
I said just now that many of us needed convincing that there was no preferable alternative to the Common Market. Like most people, I tried to take a good look at the other possibilities. The trouble is that on close examination they turn out not to be possibilities after all.
I have never been a Little Englander, or whatever is the Scottish equivalent. Indeed, I strongly support the present Government's policy east of Suez. Even so, I do not imagine that there are many hon. Members on either side who seriously believe that a return to Britain's imperial rôle is still really practicable.
Our bonds with many of the independent countries of the Commonwealth are still strong, but they are now largely bonds of sentiment. Economically and politically, those countries have grown away from us, and, clearly, a closer association with them does not offer an alternative solution to our problems. Thanks, however, to the terms which my right hon. and learned Friend has been able to secure, especially for New Zealand, I am convinced that the countries of the Commonwealth will not only not suffer but will actually benefit from our entry, as Europe in turn will benefit from a closer association with the Commonwealth.
Secondly, as a North Atlantic parliamentarian of long standing, I have always been a strong supporter of N.A.T.O. and of the Atlantic idea, and in many ways I would have liked to see us join a group which included both Canada and the United States. But again I have convinced myself that this is not practical politics. Inevitably, any direct association with a super-Power is not going to be an association of equals. It is going to be a relationship of overlord and satellite both politically and, even more so, economically, and one which, therefore, could be neither beneficial nor acceptable to us. What I do believe is 1803 that both N.A.T.O. and the North Atlantic Assembly can and will provide a most useful link between Europe and North America.
Finally, there remains the possibility of going it alone. While, naturally, not being quite as worried as Lord George-Brown by the idea that this might mean "one in the eye for Harold", I agree most strongly with him that it is not really on. Whatever one's party allegiance—
§ Mr. Donald Stewart rose—
§ Sir F. Maclean
I would rather not give way now. Whatever one's party allegiance—and I think the hon. Gentleman the Member for the Western Isles (Mr. Donald Stewart), who represents the Scottish National Party, will agree with me—it is impossible to look back over the last 10 or 15 years without getting the feeling that we are already being left behind, that all along, under successive Governments, something has been amiss, something has been missing, to account for the perennial sluggishness of the economy and its relative rate of growth. Of course we could survive alone, as the United Kingdom did in 1940 and as we in Scotland could survive if we wanted to without the rest of the United Kingdom. It would be possible, but it would be unpleasant and unsatisfactory. But, fortunately, at the moment we are not trying to go in for some kind of endurance test or seeing how miserable we can make ourselves. We are concerned with improving our standard of living and increasing our influence in the world. And there is no doubt that in the present state of world markets and technological advance, in a world dominated by superpowers, like Russia, China and America, a country of this size, to make the most of its economic and political potentialities, must join a larger group.
This is the conclusion which the Six, after much heart-searching, arrived at 14 years ago, and which in their experience has since proved to have been abundantly justified. This is also the conclusion that right hon. Gentlemen opposite arrived at when they made their application to join in 1967 and renewed it last year.
Those who believe that we should not go in on any terms whatever are naturally entitled to the views they hold with such obvious conviction. But something 1804 that always surprises me about them is how little confidence they have in this country and its people. They seem automatically to assume that when we join Europe we shall at once become everyone's whipping boy, that we shall be forcibly made to speak French, that we shall be deprived of our ancient Monarchy, that we shall be fed on frogs' legs and that we shall have imposed on us a Communist or Fascist regime, according to which one likes least.
Such an attitude, it seems to me, does not take sufficient account of our national characteristics. It is, perhaps, not very tactful to say so while the negotiations are still in progress, but I am convinced that our impact on Europe will be at least as great as Europe's impact on us, and probably much greater. Indeed, I suspect that it was fear of excessive British influence as much as anything that made the late General de Gaulle less enthusiastic than he might have been about British entry. In a very short time Britain will be playing a leading rôle in Europe, a part out of all proportion to our size. And that will be of great benefit both to us and to Europe.
It surely is pointless to try to pretend that we have not always been involved in Europe. If this were true when we were paddling our own coracles, how much truer is it today, when British European Airways can get us across the Channel in one-twentieth of the time it takes it to get us from Cromwell Road to London Airport. The trouble in the past has been that it took us too long to recognise just how involved in Europe we were. This was so before 1914 and again before 1939—twice in the lifetime of many of us here, as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) so eloquently reminded us. If either time we had been more closely linked with Europe, and the countries of Europe had been more closely linked with each other, the course of history would have been different and war might twice have been avoided.
It is for this reason that I believe that the political argument for going into Europe is preponderant. Britain's entry will enormously increase Europe's strength and stability and greatly diminish the risk of a future conflict. After all, that is one reason why the whole idea 1805 of the Community came into being. I would be the first to agree that Europe's strength and stability leave much to be desired, but that is all the more reason for wanting to go in and increase and enhance them by our accession.
There is another aspect of this problem of which I have had some experience. Important talks and contacts are in progress between East and West. I am convinced that a united Europe, strengthened by the accession of Great Britain, can play a vital part in any such negotiations, help to bring them to a successful conclusion and enable us to take the fullest advantage of the resulting political, social and economic opportunities whereas a disunited Europe, without Great Britain and with each country pursuing what it conceives to be its private interests, is bound to confuse the issue and in the long run make a successful outcome impossible. And here I strongly agreed with the right hon. Member for Stechford when he said that he wanted to see Germany firmly anchored in the democratic alliance.
One does not need to be an economist to be able to grasp the economic advantages to this country of a larger market and all the other benefits that would flow from our entry into Europe. It is only if one has completely lost confidence in the people of this country and believes they are no longer capable of rising to the challenge it presents, or grasping the opportunities offered, that can one possibly have any doubts on this score.
Some years ago Mr. Dean Acheson caused great irritation and indignation by saying that Great Britain had lost an empire and not yet found a rôle. What he said was perfectly true. We have spent the last 25 years searching for a new rôle to take the place of our imperial rôle. I believe that we have now found one, a rôle no less satisfying to our pride and self-respect, a rôle in which we can as a nation make as great a contribution and play as great a part as ever we did.
§ 9.45 p.m.
§ Mr. George Darling (Sheffield, Hillsborough)
In view of the time, I am sure that the hon. Member for Bute and North Ayshire (Sir F. Maclean) will forgive me if I do not refer to any of his observations.
1806 There has been quite a lot of criticism on both sides of the House about the inadequacies of the White Paper. Obviously we need a great deal more information than the White Paper gives on many of the issues we have to consider. I agree with the right hon. Member for Taunton (Mr. du Cann) that the White Paper poses more questions than it answers. I wish to follow the arguments he put forward about the control of the Communities' institutions and the manner in which the Commission works and its relations with the Council of Ministers by referring to the work of the European Parliament. I do not want to cover the whole field, but I wish particularly to refer to two aspects—first, the concept of democratic control over the Communities' institutions, and, secondly, something which has not been adequately touched on in the White Paper or in the debate, the Communities' relations with the Western European neutrals and other Western European countries which may be outside the Common Market or may become associate members.
The structure, powers and authority of the Communities' institutions receive very scant attention in the White Paper. We are told little more than the number of members of the Commission, the Council of Ministers and the European Parliament, and such references as there are in the White Paper to the duties and powers of these institutions are so inadequate as to be misleading. For instance, paragraph 72 merely says thatThe European Parliament's present rôle is largely consultative, though it has certain powers of control over the Commission.That, apparently, disposes of the European Parliament.
Some advocates of accession have said that the Communities are democratically controlled. I do not wish to raise any questions about national sovereignty because that issue has been dealt with, but I should like to know what "democratically controlled" means in the context of the European Communities. Does it mean that the Council of Ministers and the Commission are controlled by the European Parliament? Of course it does not. The European Parliament has no power of control as we would understand them. Does it mean that the Council and Commission are subject to the control of the national 1807 Parliaments? Of course it does not. We are not told precisely what they do or how they come to their decisions. So far as I know, no arrangements have been proposed whereby this national Parliament can properly discuss the decisions of the Commission in the sense of influencing those decisions.
The Prime Minister, in opening this debate, said that he was surprised at the lack of understanding in this country about how the Community works ; but he has done very little to enlighten either the public or us in his speeches or in the White Paper. Certainly the European Parliament is not a parliament as we understand it. It is not a legislature. It does not exercise any authority of a parliament over the ministers or the civil service of the Community. It is in fact an advisory council. It is quite wrong to call it a parliament, with its present limited powers. It is composed of parliamentarians who are appointed by the national Parliaments. This is not parliamentary democracy.
The European Parliament's weak position at present, at least in relation to the Commission and the Council of Ministers, is totally unsatisfactory, and therefore I should like to put some questions to the Government about what they will do, if the United Kingdom goes into the Communities, to get some measure of Parliamentary control over the activities of the Commission and the Council. I wish to be brief, and I shall therefore put my questions, but I do not necessarily expect them to be answered tonight by the Secretary of State for Trade and Industry. I shall let the right hon. Gentleman off that job.
I know that some rather ad hoc and haphazard proposals are going round Europe, within the Six and elsewhere, to strengthen the powers of the European Parliament, and it is on this matter that I want to question the Government. I understand that if we go in the United Kingdom will have no formal representation in the European Parliament until 1973, when the formal accession takes place. I should therefore like to know how hon. Members can be kept informed of what goes on in the European Parliament and, in so far as that Parliament discusses the affairs of the Commission and the Council, how those discussions can be 1808 projected to us. I want to know how they can be reported to us, and how we can discuss them here during the interim period.
During that year the Commission and the Council will be taking decisions which, if we have agreed to go in, will have a profound effect upon our economic circumstances, our economic developments, and so on, and although the White Paper says that the Government will have discussions with the Commission and the Council during this interim period, the fact is that these decisions are not likely to be reported to us in the sense that we can discuss and influence them, and we should be in a position to do so.
Is it the Government's intention that during the interim period we shall have representatives, possibly as observers, in the European Parliament? What is far more important, will we have observers in the twelve committees which consider the work of the Communities, because all these committees meet in secret? That is another aspect of parliamentary democracy which does not appeal to me—having secret committee meetings—but that is a matter to be raised later. I want to know whether we can be allowed to send observers, and whether those observers can take part in the debates, even though they cannot vote.
When we are in the Community—assuming that we go in—how will we appoint the United Kingdom's 36 representatives? I imagine that the breakdown in the present Parliament would be 18 Conservatives, 17 Socialists and one Liberal. I think that that would be a proper proportion. Will they be appointed by the patronage of the Whips, in the same way that delegations to the Council of Europe are appointed? Or will we somehow elect them from the House in those party proportions? Will peers be eligible—
§ Mr. Darling
—for membership of what is supposed to be a democratic assembly?
There is another matter to which we should pay attention before we go any further. How will we make arrangements for the Government and the Opposition to allow 36 hon. Members to spend between 100 and 150 days a year—
§ Mr. Darling
I know that my right hon. Friend and I are in dispute about this. I have done my calculations, and I think that the committees are meeting for between 100 and 150 days a year in Strasbourg, and perhaps in Brussels as well. We must consider this. We have to lift 36 Members from their constituencies and give them a job to do in Europe. Whether or not I am in favour of entry, I believe that before we go further we should consider how to deal with problems of that kind. It is essential for us to have some idea whether the Government wish to play a part in strengthening the powers and authority of the European Parliament, so that if we go in it can become a more representative and democratic body, with proper parliamentary control over the work of the Commission and the Council of Ministers.
My other point concerns the position of those Western European countries who will be outside the Communities, or may have only associate membership. It is not properly appreciated that those countires who will not be full members of the Communities will not be represented in the European Parliament. They will have no part in the policy-making institutions. They will be outside. If they want to be only associated members—and there is some doubt whether some countries, like Sweden, want to be associated—one of their main reasons is to preserve their neutrality. They do not wish to be involved in policy-making decisions.
But if we are to make a united, democratic Western Europe a reality we must provide a forum in which views and opinions can be exchanged between the countries that are only associated members and the members of the Communities. Such a forum must become a reality, so that matters can be discussed in it. It is essential to provide some means by which the Communities' policies and their economic, financial and fiscal consequences inside and outside the Communities can be objectively assessed and examined, and effectively discussed in a democratic atmosphere.
In spite of what has been said by those hon. Members on both sides of the House 1810 who favour accession to the Communities, I believe that there is still a danger that with the Communities' inevitable preoccupation with their own economic developments they will be too inward-looking, and may tend to ignore the interests of other nations who have a claim to share in Western prosperity.
I do not want to establish new institutions ; we have more than enough in Europe at the moment. The forum best suited for this regular examination of the Communities' policies—a forum in which the neutrals can play their full part without losing their neutrality—is the Council of Europe. But we shall have drastically to reorganise the Council of Europe. Its Assembly can become a forum for discussions of the kind that I have been talking about, but we must get some outside assistance. We shall require its members to be properly representative of their countries, who can regularly examine and discuss O.E.C.D. reports on European economic, financial and fiscal policies.
If the Assembly can be used in that way it will bring in the neutrals, Australia, Canada, the United States, Japan and, I hope, New Zealand. I think that that is a practical proposition. Its members will be able to look regularly at what the Communities are doing in the wider context, and will be able to have proper democratic discussions on reasonable reports presented to the Council of Europe for that purpose. Another important factor is that this assembly could provide a bridge for proper discussion of relations between Western Europe and the Eastern countries. I sincerely hope that the Government can give attention to the questions which have been raised both by the—
§ It being Ten o'clock, the debate stood adjourned.