§ 7.4 p.m.
§ Mr. Peter Shore (Stepney)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Import Duties (General) (No. 8) Order 1973 (S.I., 1973, No. 1845), dated 5th November 1973, a copy of which was laid before this House on 22nd November, be annulled.This afternoon we have had a Budget that failed signally to match the gravity of the hour. Now, just three hours later, we are presented with what is in effect a mini-budget; a budget, moreover, that has more impact on our two major economic problems, the balance of payments and the cost of living, than the Budget which the Chancellor took 45 minutes to present earlier today. However, unlike the earlier Budget, which was largely irrelevant to the problems that we face, this one, as I hope shortly to demonstrate, is actually perverse in its effects. It will impose taxes on our food and it will worsen further the balance of trade.
Certainly we need an import order today, but an order entirely different from that which we are discussing. What we need now is an import control or import quota order to arrest the flood tide of imports which now threatens our ability to earn our living and defend our currency.
The size of our trade deficit, which is the background to the order, is indeed calamitous. So far this year we have chalked up a trade deficit of nearly £2,000 million. With every passing quarter the gap has widened. It was minus £360 million in the first quarter, minus £410 million in the second and minus £550 million in the third, and it has reached an almost unbelievable minus £625 million in the last two months.
If there had been no Middle East war and no overtime ban in the pits—and neither of those events is reflected in these appalling trade figures—we should be faced with the need for urgent and severe action to begin what is bound to be a long and arduous effort to earn once again our keep and to pay our way in the world. But we have not got an import quota or import control order. Instead, we have an order, a vast volume, which unbelievably seeks further to relax trade barriers between Britain and the 1030 European Economic Community and, with the conspicuous exceptions of Commonwealth trade and trade in food, to lower tariffs generally, although moderately in relation to the rest of the world.
The folly of a further cut now in our tariffs with the EEC in particular will be evident to all those who have followed the course of our trade with the Continent since the Treaty of Accession was signed just under two years ago. Our trade deficit with the Six in 1971 stood at £180 million. In 1972, partly anticipating entry and the effort by both Continental and British exporters, the deficit grew to £499 million. That is trade with the Six alone. In the first 11 months of this year, following the first 20 per cent. tariff cut in April 1973, our trade deficit has reached £1,036 million. Comparing 1973 with 1971, our trade with the EEC Six will have deteriorated by the end of this year by a full £1,000 million.
What does the Minister for Trade and Consumer Affairs expect in 1974? It is no good for him to emulate the Chancellor of the Duchy and tell us about the growth of Britain's exports to the EEC and at the same time fail to tell us about what is happening to our imports from the EEC as a whole. Indeed, the Minister fell into that error in a speech which accompanied the release of the order. In that speech he pointed rather proudly to the fact that Britain's exports to the Six in the first 10 months of this year totalled £3,235 million, an increase of 35 per cent. over the same period last year. That was the theme to which his right hon. Friend spoke in the debate we had not long ago about the astonishing successes that have followed Britain's membership of the EEC. Against that 35 per cent. increase in Britain's exports, I must now inform the House that the increase in imports is not 35 per cent. but 50 per cent. during the same period. That is why the gap, great and grievous as it was in 1972, has grown and continues to grow so calamitously in 1973.
From the succession of heavier quarterly deficits that we are revealing, all the signs are that, unless something new and additional, far beyond the measures announced by the Chancellor today, is introduced, 1974 will be even worse than 1973. It is no good Ministers comforting themselves with the thought that we have 1031 a competitive power. Yes, indeed, we have—and that has brought some grave problems of a different kind as well.
But the policy of floating the pound started in the summer of 1972. We have now had 18 months' experience of floating the pound. I am afraid that it has not produced, nor begun to produce, any sign of improvement in our overall trading position—that is, in the balance between our exports and imports. That being so—and it is undoubtedly so—what the House will want to know from the right hon. and learned Gentleman is why Ministers have come forward at this particular time with an order which seeks to relax further the trade barriers between Britain and the rest of the world.
I know partly the answer to the question. This measure has been introduced not because it relates to any need or development within the British economy but because it is part of a pre-set timetable, a timetable worked out in the Treaty of Accession nearly two years ago, a timetable which Ministers feel they must slavishly follow even though circumstances have changed so radically in the intervening period.
But even if one allows for the constraints of the Treaty of Accession and for the diffidence of Ministers in seeking to alter it at so early a stage, I am surprised that no reference has been made in any ministerial announcement about the possibilities that exist for changing the timetable. Let me refer the right hon. and learned Gentleman in particular to Article 26 of the Rome Treaty, the underlying document to which all our commitments relate. If the right hon. and learned Gentleman looks at it he will find thatThe Commission may authorise any Member State encountering special difficulties to postpone the lowering or raising of duties …on commodities in relation to third countries and to the common external tariff. "Postponement" is written into Article 26. That would help to postpone or avoid the great bulk of changes written into the Import Duties (General) (No. 8) Order 1973. It would not deal with the effects of lowering tariffs between Britain herself and the EEC.
1032 There are other procedures under the Treaty of Rome which the Minister could seek to employ. Article 108 says:Where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments …".Does the right hon. and learned Gentleman accept that he is in difficulties, or is likely to be in difficulties, in the balance of payments? If he does and that is so, the Commission is supposed to investigate the position and make recommendations. There is the possibility of the provision of mutual assistance, again within Article 108, which says:During the transitional period, mutual assistance may also take the form of special reductions in customs duties …to the other members of the Community. In other words, they could lower their customs duties in relation to Britain on a more favourable timetable as against the scheduled reductions that this country has to make against the EEC.
Lastly, Article 109 of the Rome Treaty says:Where a sudden crisis in the balance of payments occurs …"—perhaps the right hon. and learned Gentleman might accept that if it is not "sudden" it is at least a crisis—… the Member States concerned may, as a precaution, take the necessary protective measures.Even the Treaty of Rome envisages that there are certain circumstances and situations in which import quotas—that is precisely what these special measures refer to—can be introduced. What I want to know is whether the Government have considered these procedures and whether, in the otherwise somewhat fruitless dialogue that went on in Copenhagen earlier last week, or in the continuing series of meetings in Brussels, all these matters have been touched on, or whether any of them have been raised? I say it with some emphasis because I am aware, and I do not think any right hon. and hon. Members on either side of the House can fail to be aware, that the order of magnitude of the figures we have been discussing, grave as they are, is likely to be enormously increased in the year ahead.
Even if there was no serious interruption in oil supplies, the price of oil is now going to rise to a really formidable 1033 degree. Even in the last month the price of oil has doubled, to take the October and November price increases unilaterally announced by the oil sheikhs and other Middle East producers, which means that Britain's oil import bill of £1,000 million in 1972 is bound to become, without any increase in quantity, about £2,000 million in 1974. I say doubled, but the right hon. and learned Gentleman knows full well that the availability of oil, or rather its price, is likely to be very much higher than the increased levels which were posted by the Middle East and OPEC countries only a few weeks ago.
The free market price for oil, if the figures quoted in Iran are anything to go by, could be three or four times as much as it was in the first half or the first three-quarters of this year. When we talk about the overriding need for doing something about our balance of payments situation, we are not overstating the seriousness of that situation. But to have, on the same day, a so-called Budget which has no new proposals whatever directly related to this most serious problem for the British economy, and to find ourselves discussing three hours later an order which seeks to liberalise trade further between Britain and one of its major deficit trading areas, is an astonishing combination and, indeed, a disastrous one.
My quarrel with the order is not simply based upon the balance of payments and what I fear to be its effects. It is also based upon what I see as its second major defect—that it will give a further twist to the cost-of-living spiral and in the most sensitive area—the price of food. The November food index stands at 207, compared with 174.3 in November 1972. So in one year the price of food has risen by 19 per cent., and this during a period which includes five months of total freeze, six months of severe restraint in phase 2 and the first month of phase 3. I can think of no comparable increase—I doubt whether any other hon. Member can either—in peace or war in my lifetime.
What does the order do to the price of food? It imposes new taxes on food beginning on 1st January 1974 where previously either no taxes or lower taxes have operated. It imposes them in the 1034 form of customs duties and tariffs levied on imported food. I will not weary the House by itemising all the foodstuffs whose prices will be increased. That would take a very long speech. But I will mention three main categories of foodstuffs that will be particularly hard-hit.
The first is the whole range of fresh fruit and vegetables which form so important a part of the national diet. It is true that on 1st January our tariffs on EEC horticultural products will be lowered by 20 per cent., and against that we have to harmonise upwards our tariffs on horticultural imports from third countries by 20 per cent. on the same date. But only about 27 per cent. of our fruit and vegetables come from the EEC, on which the tariff is to go down, whereas 73 per cent. come from those third countries whose exports will now have to pay higher tax. So there is no joy for us there.
The second category where tax will bite is on tinned foods of all kinds but particularly fruit, fish and meat. We eat more canned fruit and, I believe, canned fish than any other country in Europe. All of us who remember the well-stocked shelves of the local grocers' shops, with their tins of pineapples, grapefruit, apricots and peaches, with labels from Israel, Spain, South Africa, Canada, Australia, and all around the world, will realise that this national habit of eating tinned fruit is firmly established. Much of it, as I said, comes from Commonwealth countries, and upon their imports a tax equal to 40 per cent. of the common external tariff is to be imposed on 1st January.
I should like to give one or two illustrations, not even from a Commonwealth country. I have here some of the tariff changes which will affect our imports from Israel, a country which supplies us with a great deal of canned fruit of all kinds. Grapefruit from Israel, which is not unknown on the British breakfast table, at present has a nil tariff, but on 1st January it will be 6 per cent. On orange juice there is a nil tariff and on 1st January it will become 7½ per cent. Tinned grapefruit has a nil tariff and on 1st January it will be 4¾ per cent. On tomato juice there is at present a 5 per cent. tariff, which will rise on 1st January to 11 per cent. The tariffs on melons and oranges will rise from 5 per cent. 1035 to 7½ per cent. on 1st January. This is from Israel, a country which has not enjoyed the Commonwealth preference, the nil tariff régime, which most of our Commonwealth food-supplying, and particularly fruit-supplying, countries have so long enjoyed.
§ Mr. Eric S. Heffer (Liverpool, Walton)
I am sure that my right hon. Friend will be interested to know that most northern working-class families at Sunday evening tea have tinned salmon with salad followed by tinned peaches and tinned cream. That is a traditional working-class Sunday evening tea, and it is precisely what this Government's policy will hit.
§ Mr. Shore
I am glad that my hon. Friend has made that point. These, of all the taxes—and there has been a whole series of them—will reach into every family in the land. Families will really feel this, and they will rightly feel resentment that these taxes should now be imposed upon them.
I have mentioned fresh fruit and vegetables and canned fruits, fish and meat, but the third category is the tax on meat. There is a tax on beef of 4–5 per cent., but that may not be noticed so much because the levies have already affected the price of beef and the free market allows our meat to go surging into the Community, where prices are so much higher. That has already been felt.
But where it will be felt most dramatically is on mutton and lamb, In 1972 we imported £105 million-worth, according to the overseas trade statistics, of which no less than £102 million-worth came from New Zealand and Australia. Apart from a small specific duty, our lamb imports have been tax-free until now. From 1st January they face a tariff of no less than 8 per cent. There will be an 8 per cent. tax on the leg of lamb and on the shoulder of lamb that we have enjoyed as very much a part of our national diet.
It should be remembered that all this is only the first step in a series of price increases which will go on year in and year out, unless there is a new Government with the will to alter the procession of events, until the end of 1977.
The direct effect will be an ever-increasing burden of tax on the nation's imported 1036 food but the indirect effects will be serious, too. Taxes on imported food and the threat of the extension of the CAP are forcing our traditional suppliers to diversify away from the British market. This point was made in the short debate on the motion moved by my hon. Friend the Member for Swindon (Mr. David Stoddart) last week. Those who made this point were absolutely right.
Only two months ago, in October 1973, the New Zealand Meat Board Market Development Committee, an official body, recommended that 23 per cent. of lamb exports should be diverted from the United Kingdom market. It aims to sell instead to Greece, to North America, to Japan, to Germany and other European countries. Australia, too, following Mr. Gough Whitlam's visits to Tokyo and Peking, is planning to conclude trade pacts with those great and populous Asian countries. All this is bound to increase the price of food in Britain.
What makes the whole thing so scandalous is that these increases in our food prices come on top of other specific measures to drive up the cost of our food.
§ Mr. E. Fernyhough (Jarrow)
I agree with my right hon. Friend that what makes these measures so indigestible is that they come on top of other food price rises. But what makes them repulsive is the fact that when the money has been collected we have to send it across the sea to the EEC.
§ Mr. Shore
My right hon. Friend has put his finger on one of the most sensitive points in this whole arrangement. One of the most offensive parts of the Treaty of Accession is the part which enables the authorities in Europe to take the revenue from these taxes as though it were their own, under the shameful provisions which the right hon. and learned Gentleman the Minister for Trade and Consumer Affairs did so much to cram down our throats a year or so ago. But it would take me far beyond the scope of the order if I pursued that aspect now.
To come back to the question of food prices and the effect of this order, I was saying that what was so scandalous was the fact that it came on top of all the other measures to put up the cost of our food. It will be noted that, with the exception of beef, none of these categories 1037 of foodstuffs which are to be taxed on 1st January is included in the common agricultural policy. Those covered by the CAP are separately taxed by the system of variable levies on imports, coupled with intervention prices and intervention boards inside the EEC. These new taxes have from 1st January, also come on top of the appalling effects of the Government's economic mismanagement which has devalued the pound in the last two years to an unprecedented extent.
The effect of this on our food bill needs to be stated. I said that lamb from New Zealand and Australia will be taxed at 8 per cent. from 1st January. But in the two years since the Smithsonian agreement, when the pound was fixed against the new parity régime which was established at that time, it has devalued against the New Zealand currency by 24.7 per cent. and against that of Australia by 23.8 per cent. The effect of that change in the value of the pound has been inevitably, immediately and automatically to raise the price of our imported food from Australia and New Zealand to the extent that our currency has been devalued.
In the way the pound has floated against the currencies of our principle food suppliers in the last two years, we can see one of the main causes of the increased food prices in Britain. We devalued by 11 per cent. against the United States, by roughly the same against Canada, by the same against the Argentine—which still provides us with a good deal of our beef—by the same against Israel, by 21 per cent. against Spain, by 24 per cent. against South Africa and by something over 20 per cent. against the countries of the EEC, with the sole exception of Italy. The right hon. and learned Gentleman and his right hon. Friends talk about world prices as the main cause of Britain's rising food prices. I have never sought to conceal, either from my friends or from myself, the fact that world prices have been a great problem in this last year—of course they have But if I am prepared to face the reality of world prices, let the Government also face the reality of what the devaluation of the pound has done, together with the common agricultural policy levies and all the specific and measurable food taxes that are being imposed upon food brought into Britain.
1038 What makes the whole situation ludicrous is the fact that the Government are still supposed to consider inflation as their priority problem. The Minister of Agriculture himself, in the Agriculture Council meeting in Brussels on 11th December, barely a week ago, when discussing the reform of the CAP—he has not put forward any proposals for the reform of the CAP, as such—called upon the EEC to reduce the common external tariff on selected farm and food products as part of the fight against inflation. In other words, the Minister of Agriculture has proposed to the Agriculture Ministers in the EEC that they should do the very opposite of what the right hon. and learned Gentleman is trying to get this House to do tonight. He is demanding that we impose the CET on a wide range of foodstuffs which have never previously been taxed, while his right hon. Friend is suggesting to his colleagues in the EEC that they should do precisely the opposite. It really is bedlam.
I have a third and main objection to this order—not just to the effects on the balance of payments, not just to the effects that it will undoubtedly have on prices, but to the new pattern of preference which this order establishes in our trading relationship with the rest of the world. First, and most notable, this order marks the end of the Commonwealth preference system. I was tempted at one point to say that I feared it would mark the beginning of the end of the Commonwealth itself, certainly as we have known it in the post-war years, but I do not say it and I must make plain to the House my reason for not saying it, because it may give some encouragement to many of our people, many friends of the Commonwealth, on both sides of the House.
I put down a Question to the Minister in which I asked him whether, now that Britain was imposing the CET against Commonwealth countries to whom we had previously afforded preference, they, in turn, on 1st January, would impose taxes to an equal extent on those British exports to them which had previously enjoyed preference. I was delighted to learn from the Minister that only one country—New Zealand—was even considering doing so at the present time. I find this a remarkable and admirable restraint on the part of Commonwealth 1039 countries. It shows that there exists in many parts of the world the hope and belief that this absurd policy of turning against Commonwealth trade will yet be reversed before damage is done.
It will be clear to anyone who has glanced at this order that so long as it continues the Commonwealth will be divided into two. The Commonwealth of Nations now becomes C1 and C2 in column 5 of this order. First, there is C2, the so-called associable countries—those of Africa and the Caribbean—which have the opportunity under the Treaty of Accession to negotiate some form of association with the EEC. For the time being, at least, their trade remains unaffected by this order. But on the far larger part of the Commonwealth, including the 700-odd million people of the Asian Commonwealth and the 40-odd million inhabitants of the old Commonwealth countries of Australia. New Zealand and Canada, about whom no agreement has been made, we now have to impose duties equal to 40 per cent. of the difference between what they now pay and the full burden of the common external tariff of the EEC. So let there be no doubt that this is a very damaging measure. It not merely discriminates against the Commonwealth; it divides the Commonwealth into two for the purpose of trade in the future. I fear that if we cannot reverse it soon great damage will inevitably be done, in spite of the forbearance of our friends.
Secondly, this order makes it clear that as old preferences are withdrawn new ones are to be granted for countries with whom we have no particular connection—for example, the countries of French Africa and of the Mediterranean—who are parties to favourable trade agreements with the Six. Thirdly, and very important, the British generalised system of preference is to be merged with that of the EEC. That is the third change in the new pattern of trade which this order seeks to impose.
This is a very complicated order to interpret, and I hope that the right hon. and learned Gentleman will give us a little assistance when he speaks. Am I right in my belief that the generalised preference system does not appear in the order at all; further, that it will not be made the subject of a separate order to come before the House, but that—I think 1040 I quote from the Ministry hand-out—it will be largely implemented by directly applicable Community instruments not under United Kingdom legislation? Is that so? Are we being told that our trading relationships with the third world are to be determined without the knowledge of the House—we have not yet had even a statement—without debate on it, and with the need for only a ministerial decree at Brussels? Is that so? I hope that the Minister will answer.
We should also like the Minister to give us answers about two of the Asian Commonwealth countries whose trade is much affected by the loss of preferences in the United Kingdom market and also possibly by the GPS scheme. First, will the right hon. and learned Gentleman tell us whether the tobacco we import from India—which accounts for 25 million dollars a year, or 10 per cent. of total Indian exports to the United Kingdom—will be allowed to continue at the present low preferential rate of 2.9 per cent., or is it to be raised to the 6 per cent. or indeed, as I have sometimes read, the 10 per cent. of the EEC on 1st January?
Second, will the right hon. and learned Gentleman tell us whether jute-manufactured goods from Bangladesh and India will continue to be duty-free in the United Kingdom or whether, on 1st January, we shall have to impose a tariff upon them? These who are at all involved in the affairs of the Asian Commonwealth will know that jute and jute goods are of enormous importance to the countries that I have mentioned. Indeed, jute and jute products account for an unbelievable 80 per cent. of Bangladesh's total export earnings. Bangladesh is one of the poorest countries in the world. How can we withdraw duty-free access from such a country at such a time—and to whose benefit?
I invite the House to reject the order. The crisis that we face today will not be eased by anything within it. On the contrary, it will make our problems still more difficult as the balance of trade moves further against us and as inflation is stoked up still more by the need to tax hitherto untaxed food.
When we consider the number and scale of the misfortunes that we have experienced since we entered the EEC less than 12 months ago, the sheer necessity for the fundamental renegotiation of 1041 the terms that were negotiated becomes plain even to the most obdurate Marketeer. We cannot allow our people to be taxed year after year by the levies of the CAP and by the duties of the common external tariff. We must reopen the British market to our traditional and low-cost food suppliers in New Zealand, Australia, Canada and elsewhere. We must not allow VAT, and we shall not allow VAT, to be imposed upon our food, and we shall decide for ourselves whether we have a VAT at all.
Above all, we have to take back the powers of regulation over the British economy, so that we can do what now so clearly needs to be done in the national interest—control the great surge of imports into the United Kingdom and control the outgoing tide of investment and money from Britain into Europe, and we must have the power to pursue lax, price and subsidy policies to help to counter the great evil of inflation from which we suffer.
None of these things can be achieved unless we break the bonds of the Treaty of Accession. Nothing can be done unless we renegotiate fundamentally its terms. By voting against the order we are not only fighting against unnecessary taxes on food and against an unnecessary hurt to the Commonwealth. We are also taking the first step towards economic sanity.
§ 7.45 p.m.
§ The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe)
The right hon. Member for Stepney (Mr. Shore), in the breadth of his denunciation of the order, did no more than echo his familiar opposition to the entire case for accession by Britain, on any terms whatever, to the European Communities. The nature of the demand with which he closed his speech—for the breaking of the bond established by the Treaty of Accession, for total freedom in relation to tariffs, subsidies, and each and every aspect of our policy; the denunciation into which he launched, not merely of the common agricultural policy, with which I know that he is not over-friendly, but also of the entire concept of the common customs tariff and the common external tariff—was so far-ranging that it cannot possibly commend itself to any hon. Members who have with any con- 1042 sistency at all supported the case for accession by this country to the European Communities. [Interruption.] I know that some of my hon. Friends may take a different view.
I want the House to have this matter in perspective. The nature of the right hon. Gentleman's opposition goes far beyond an analysis—even if it were an accurate one—of the consequences of the order, and takes us right into total opposition to membership of the Community. That is not a case which I think the House should accept. The right hon. Gentleman seeks to reopen the long argument about the pattern of our trade and the changing balance between our trade with Europe and our trade with the Commonwealth—a change that he knows perfectly well has been taking place for many reasons in different ways for a number of years, a change in the pattern that was taken into account in the consideration of the case for joining Europe in the first place.
Then the right hon. Gentleman sought to launch his two-pronged attack on the central provisions of the order by reference to its effect on food prices—I shall deal with that in a few moments—and also to the place which it should take alongside today's economic measures. It is important that the House should have that in perspective as well.
I do not question the gravity of the overall situation which my right hon. Friend the Chancellor of the Exchequor described in his statement to the House today. Nobody questions, as the right hon. Gentleman put it, the overriding need for measures to accommodate that situation. Nobody questions the need to do so by facing reality. We recognise that one of the measures advanced to meet that case could be a demand for import regulation—import controls—of the kind that the right hon. Gentleman described and of the kind I recollect the right hon. Member for Battersea, North (Mr. Jay) producing in 1964. But other measures can also be judged appropriate to deal with that central economic situation—measures which my right hon. Friend the Chancellor described today.
That is not the subject of this debate. All I am contending is that there are many ways in which to respond to the economic situation. The Chancellor has outlined effective and appropriate ones, 1043 and it is certainly consistent with his proposals to conclude that it would not be right, quite apart from membership of the Community, to embark upon a far-ranging pattern of import control.
I was grateful to the right hon. Gentleman for drawing attention to Articles 26, 108 and 109 of the Treaty of Rome, because it demonstrated that even in his eye the treaty is not as rigid a strait-jacket as he would once have had us believe.
These measures can perfectly well take their place alongside the measures proposed by the Chancellor of the Exchequer today to improve the economic situation. The right hon. Gentleman asks, for example, what the measures contain which seek to deal with the pattern of the balance of trade, import and export. He will surely not overlook two simple measures which the Chancellor outlined, namely, the imposition of controls on credit and hire-purchase terms, which are likely to have a direct effect, as the Chancellor said, on the inward movement of consumer goods, and the export of consumer goods manufactured in this country—a relevant measure, acceptable as an alternative to those for which he argues.
The right hon. Gentleman has surely not overlooked the impact of the change in the balance of demand in the economy as a result of the other measures announced by the Chancellor. These are both measures which relate to the necessity—if necessity it is—for making more goods available for export and reducing the likelihood of such goods being consumed on the home market. They can take place happily alongside the broader provisions of the order.
§ Mr. Fernyhough
Is the right hon. and learned Gentleman saying that the British people are now living so well that it is very desirable, when we are fighting inflation in every sphere, to put up the cost of food, at a time when workers are being told that their incomes will be down because of short-time working, and when everybody has in every way to tighten their belts? Is he saying that at a time when incomes are to fall it is sustainable policy to take action to put up food prices?
§ Sir G. Howe
I am not saying anything of the kind. I shall in a moment explain 1044 what I am saying about prices. I shall demonstrate to the House that on prices the net effect of the order will probably be downwards rather than upwards. I shall come to that in a moment, but I should first like the House to look at the order in a broader perspective.
The order is an essential part of our progress of accession to the European Communities. It must be looked at in that way and as part of the general case for doing just that. It should not be looked at as achieving only a movement in one direction or another on given tariffs. It is part of the longer case in favour of joining the larger European Economic Community. If one looks at the effects of any aspect of it one can produce a curious variety of analyses, as the right hon. Gentleman did. The net short-term effect is not very substantial in any event. On prices, the effect is downwards rather than upwards.
It is part of the longer-term fulfilment of our obligation to join the Community in pursuit of the longer-term opportunities which lie there. If we were to react today or any other day by casting aside this step in that progress we could lose out on the longer-term as well as the short-term opportunities of membership. We could, for example, lose out on the prospect of European Community markets outside our own being more rather than less buoyant than our own. The prospect for expansion in the light of the measures taken by the Chancellor is good.
The right hon. Gentleman returned to the familiar case about the pattern of trade between this country and the Community. It is right to point out that our imports from the Community in the first 11 months of this year had risen as he said by 50 per cent. although I think it is 47 per cent.—over the corresponding period of last year.
§ Sir G. Howe
In that case the figures may be slightly different. Our exports to the Community have been rising significantly faster than have those to the rest of the world—by 37 per cent. to the Community as against 24 per cent. to the rest of the world. That is an important factor, demonstrating the importance of the Community market as one in which trade should be expanding.
1045 It is right, as the right hon. Gentleman said, that in value terms our balance of trade with the Community has deteriorated by the figures which I have indicated—but we should look at the position in terms of volume. Imports have risen at about the same rate as exports—probably less. It always takes time for changes in parities to be fully reflected in increased prices for the exports we are making and before there is any long-term improvement.
§ Mr. Douglas Jay (Battersea, North)
Is the right hon. and learned Gentleman aware that the balance of trade depends on value, not on volume? Does he deny that in the first 11 months of this year our visible trade with the Six has shown a deficit of about £1,000 million, whereas three years ago it was almost balanced?
§ Sir G. Howe
I appreciate that the figures I have been presenting relate to percentage growth in the deficit in the overall balance of trade between this country and the Community. I accept that trade depends on two factors, namely, the volume of goods and the price at which they are sold, and the balance comes out in cash terms as the value of the goods sold. But it is not unimportant that during the period of entry the volume of export trade with the Community has been growing at least as fast as imports. The picture provided by the right hon. Gentleman and his hon. Friends—of a flood of consumable goods entering this country from the Community, with this country selling nothing to the Community—is a false one, which many people seek to present. We are exporting a volume of goods which is growing as fast as the volume we are importing. Prices have risen and have to rise still further in the light of parity changes. The picture is not as black as it has been painted.
§ Mr. Shore
That may be so, but can the right hon. and learned Gentleman carry the analysis a bit further? Is it or is it not the case that imports of the consumer goods he has mentioned have increased? Has our trade balance in consumer goods—for example, the motor car trade with the Six—improved or grown worse during the entry period?
§ Sir G. Howe
It is right that we have been importing a growing excess of certain 1046 consumer goods—motor cars among them—from the Community. That is one of the reasons why the economic effect of the Chancellor's measures today will help to reverse the trend. One of the other factors to be borne in mind is that we would be in a far better position to see expanding exports of cars from this country not just to the Six but to the whole world if we were able to get away from the industrial strife which has inhibited and impeded the growth of our motor car industry. The dominant cause, to use the simple phrase of an American motor manufacturer whom I heard on the radio the other day, is the availability and non-availability of motor cars.
§ Sir G. Howe
Availability and non-availability are primary factors. The case for joining and being part of the Market with larger expanding opportunities remains as strong as ever it was.
§ Mr. Norman Buchan (Renfrew, West) rose—
§ Mr. Buchan
Is the right hon. and learned Gentleman saying that things are good because the volume of trade has increased, giving a deficit of almost £1,000 million? If the volume of trade is to continue to increase will it not increase the deficiency which we already have? Have I got it wrong?
§ Sir G. Howe
I am saying that alongside the measures taken with respect to the balance of demand in our own economy it is perfectly sensible and consistent to be pursuing the case that has always been argued from the Conservative side of the House in favour of accession to a larger market in which to sell more. It is a larger market with better opportunities, and we have every reason to expect that we shall sell more. The extent to which goods will sell or not sell within our own economy depends to some extent upon the balance within this economy. It certainly does not weaken the case for lowering tariff barriers and 1047 expanding trading opportunities within a larger European Community.
I come now to the effect of the order on the various rates in question. This takes the second step towards the customs union by the further 20 per cent. cut in duties on goods from member States. It is the first cut in duties in the horticultural sector and the second for industrial products, making an effective 40 per cent. cut in the internal level of duties. Secondly, it preserves existing duty-free entry for Denmark, Ireland, the associable Commonwealth and most goods from the old EFTA.
Thirdly, it reduces duties on goods from the associates of the Six when the United Kingdom's full rate is being reduced. Otherwise it keeps them where they were and makes the first move towards the common customs tariff for imports from third countries by reducing the gap between present United Kingdom rates and the common customs tariff by 40 per cent.—20 per cent. on horticulture.
The order does not deal specifically with rates for countries outside EFTA with which the Community has agreements; for example, in the Mediterranean area. They will be dealt with by separate orders. Nor does it deal—the right hon. Gentleman was correct about this—with the main concessions under the Community's new generalised scheme of preferences because they would be effected by directly applicable Community legislation.
§ Mr. Shore
As I recollect it "directly applicable" means that it will be a sort of Section 2 (1) procedure whereby no order will come through us. If this is so, can the right hon. and learned Gentleman find some way of at least informing the House of the proposals and what changes affecting Britain's trade with the larger part of the Third World have been agreed or are to be agreed before the act is done?
§ Sir G. Howe
I have answered some questions about that. I will try to deal with it a little later on. It is not a consequence of an order under Section (2) (1). It is a consequence of Section 5 of the European Communities Act, from which it was clear that once we had completed the transition into the CCT 1048 the level of duties would be determined by directly applicable legislation.
§ Mr. Nigel Spearing (Acton)
Is the right hon. and learned Member aware that for three consecutive Thursdays the Leader of the House has replied to questions about this? Early Day Motion No. 88 also refers to this and asks the Leader of the House to ensure that there is a debate on the matter before a decision is reached in Brussels. The right hon. Gentleman has said that there will be time for this. The right hon. and learned Gentleman says that there will be no opportunity to debate it on an order which he would lay. Does he not think that it would be most appropriate for a debate to be held under the auspices of either himself or the Leader of the House so that we can debate this subject?
§ Sir G. Howe
I will draw to the attention of my right hon. Friend what the hon. Member has said. I cannot say more than that.
The other matters that do not appear in this order are the changes in the protective elements in revenue duties. Those are the subject of separate orders, three of which are already before the House and have already been considered by the merits Committee.
The other effect of the order is to deal with the classification of goods in relation to tariffs, and it completes the adoption of the CCT nomenclature begun last February. The old United Kingdom descriptions have been inserted into the new and longer Community nomenclature. Without that there would have been an impossible task of averaging duties, and it is that transitional complexity which accounts for a lot of the bulk of the order and which will largely disappear at the end of the transitional period.
The apparent complexity is in a sense a consequence of the gradualism involved in having a transitional policy. It would have been technically easier to have adopted the Community system completely and immediately.
I come to the effect of tariff levels on particular goods. The CCT for industrial goods is generally lower than the level of the United Kingdom full rate, so that will tend to move down on 1st January. 1049 But some things will go up and some down. Duties within the Community will move downwards. Supplies from the developed Commonwealth which were previously duty-free will now bear 40 per cent. of the CCT. But those are not very important sources. Goods from the developing Commonwealth are largely duty-free under either the GSP arrangements, which are still being negotiated, or under the standstill. I will return to this as it affects the Mediterranean countries, such as Israel, later.
When we turn to foodstuffs the matter is not as simple as the right hon. Member sought to argue. It is important to get the perspective right. Only about half our total imported food and drink is in any event subject to duty, and of that amount, for a variety of exceptional reasons, a large proportion bears no duty. Duties on food from the Six will be going down, and that is an important area affecting many horticultural products. It was concern at the downward price movement of that kind which led us to establish a long and generous transitional arrangement for horticultural products.
For the associable Commonwealth, duty-free access is also maintained. With the new GSP scheme we have been able to obtain a number of arrangements, to which I shall return, for continued liberal access without anything like the full rate of duty on a range of commodities, including coffee, cocoa butter and pineapples.
The examples given by the right hon. Member taking Israel as an example serve to show how easy it is to be misled about these things. For the Mediterranean States, with which association agreements exist, agreements either have been, or are being, worked out to apply to this country the existing agreements which they had with the old Community. Insofar as those have not yet been completed, they will all be the subject of a standstill order so that no change will take place on 1st January. For example, the agreements with Israel would be subject to a standstill on duty increases for the time being until they have been finalised.
§ Mr. Shore
I accept that. We all understand that in the past month there have been grave difficulties in negotiating with the Mediterranean countries, including 1050 Israel. But surely the order of magnitude for the figures I gave—assuming that negotiations can be resumed in a fairly reasonable time—is correct, together with the increase in prices which I have outlined.
§ Sir G. Howe
No. With respect to the number of commodities from countries where we have association agreements or where there will be such agreements, the figures are not likely to be as high, or generally as high, as the right hon. Gentleman is saying. In a number of cases—I would not want to give a general answer, because sometimes it will be up and sometimes down—there will be preferential rates established, varying from country to country. These will be better rates than those arising from alignment towards the CCT. This is why we have to look at the totality of the changes to see the overall effect of them.
Beef is not dealt with by the order. It is subject to the levies anyway, and any change takes place by different arrangement on 1st April. It is right to acknowledge that with lamb a change is being made.
But when one looks at these matters in total and tries to establish the overall effect, one finds that most individual changes will be relatively small. In any event, some increase will be absorbed by overseas suppliers anxious to hold on to their markets. Some decreases will benefit overseas suppliers. The net across-the-board effect ought to be downward. Within this, food prices might rise marginally, but it is impossible to be precise. However, it is estimated that the effect of this step towards the common external tariff on 1st January in relation to food is likely to be no more than ¼ per cent. to ½ per cent. I emphasise that that is on the food price index. The effect will be about 0.1 per cent. on prices altogether. Thus, if we set the upward trend in the food prices affected alongside the downward effect in the movement of other prices involved, we find that the net effect is likely to be downwards rather than upwards. That is why it is so wrong for the right hon. Gentleman to present this order as a monstrous taxing exercise. It is quite the reverse.
§ Sir G. Howe
I believe that I have given the correct answer. The point raised by the right hon. Gentleman may not lead to the conclusion that he suggests, but I will look at the matter and he will get his answer. I am not speaking without having tried to analyse the situation. What I have said reflects what I believe to be the position.
§ Mr. Richard Body (Holland with Boston)
While I accept that the order will have the net effect of reducing the duties on food imported from the rest of the EEC itself, does it necessarily follow that it will have the effect of reducing the prices of that food? Once the duty is reduced, it will displace imports from third countries which could send the food to us more cheaply.
§ Sir G. Howe
I hesitate to make such a simple observation to my hon. Friend, but my critics cannot have it both ways. If they say that placing a tariff on imports which would otherwise come in free will mean an upward trend in prices, it follows that the opposite course must have a downward effect. The reduction of tariffs in general is likely to lead to a reduction in prices.
What is the broad pattern of change of the GSP? The Summit directive looked forward to:… improvement of generalised preferences with the aim of achieving a steady increase in imports of manufactures from developing countries.Our objective has been maximum access for the products of the developing countries. We have been particularly anxious to safeguard the interests of developing Asian Commonwealth countries—those covered by the declaration of intent and not eligible for associate status.
We accept that the scheme of the Nine first of all took account of the interests of the original members with their different traditions, and that we, therefore, have to secure adjustments in that as we come alongside it. We have achieved a number of improvements in the original scheme. We hope that the new scheme will provide additional opportunities to the developing world as a whole, and the Asian Commonwealth in particular. 1052 One hopes to see further improvements in the years ahead because the matter will constantly be available for renegotiation and there will also be opportunities in the multilateral negotiations.
The main difference between the two schemes is that the Community scheme produced access for some industrial products limited by quotas with restrictions on the quota share effected by "butoirs", while the United Kingdom scheme has a general safeguard provision. We have a wider coverage of agricultural products but exclude textiles and hydrocarbons.
In the course of negotiations, substantial concessions have been negotiated in the Community's scheme. For example, we have been able to produce special arrangements in relation to plywood, which is of particular interest to Malaysia. We have been able to secure arrangements in relation to cocoa butter, soluble coffee and canned pineapple in our case for larger tariff quotas, with the lion's share of the quotas coming to this country.
We have obtained a number or smaller concessions—for example, on coconut oil, cashew nuts, prawns, shrimps and so on. We are hoping to secure further improvements, for example, for tobacco, which is of importance to the larger countries in the Indian area. In the Community there is now agreement on a commercial agreement. Jute from India is included in the GSP and we have the continuance of duty-free entry to the United Kingdom. That is likely to be extended to Bangladesh.
§ Sir G. Howe
Both jute and jute manufactured goods. We have secured the same pricing pattern for the protections which already exist and no additional ones. Parallel arrangements are being worked out with Bangladesh.
We must not, in our reaction to the economic news of the last week or so, overlook the longer-term objectives and opportunities to which the House and the country have been committed in Europe for a number of years, in our membership of the EEC. The changes to be made in 1053 that direction are to be taken as a series of steps. What we are dealing with tonight is one step, but an important step, in the process of achieving that customs union which is part of the objective of European economic integration. We shall be helping to lay the foundations for that in favour of which we in this House voted so decisively two years ago. It is upon that basis that I commend the order to the House.
§ 8.19 p.m.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
The Minister for Trade and Consumer Affairs must have felt extremely lonely as he spoke. There are as many dour opponents behind him as there are facing him from the Opposition benches.
The right hon. and learned Gentleman's reply to the compelling case made by my right hon. Friend the Member for Stepney (Mr. Shore) was totally inadequate. The right hon. and learned Gentleman spoke evasively and at times even flippantly. His speech will rank as not only the most curious but also the most indefensible by a Minister for Consumer Affairs. He spoke much more like a lapdog than as a consumers' watchdog. We are not impressed by his clever manipulation of statistics. In any case, my right hon. Friend was not speaking only of the import duties in this particular order but of the whole objectionable system of which they form part.
In this debate, as my right hon. Friend has amply shown, we are dealing with more important causes of the present crisis than anything to which the Chancellor of the Exchequer referred this afternoon. My right hon. Friend spoke of the huge losses on our balance of payments in direct consequence of membership of the European Economic Community. There is the further and related scandal, to which my right hon. Friend also referred, of the Government's blanket acceptance of the common agricultural policy of the EEC. It is that scandal to which I wish principally to refer.
We must now act to stop paying prices far above those at which food can be economically produced. The whole of the Government's policy on food prices is a dangerous nonsense. Its effect is to trap the British economy in a vicious 1054 circle. The more we pay for the food we import, the more we worsen our balance of payments and further gravely weaken the pound. The more we devalue our currency by sinking the pound, the more we pay in sterling for the unnecessarily high-priced food we are forced to import.
Where he is not evasive the right hon. and learned Gentleman simply repeats the Government's lame excuses for failing to deal with the staggering increase of 44.8 per cent. in food prices since the General Election. As everyone knows in his heart, most people in all parties now want urgent and drastic changes in the EEC's food and farming policies. They are heartily sick of subsidising the EEC's butter exports to Russia and of all the other absurdities to which we have become subjected. Why on earth should the already harassed British housewife have to subsidise food exports to the point where Russia now has to pay only 5p a pound for EEC butter? The right hon. and learned Gentleman has no real answer, but housewives throughout the country are demanding an answer and an end to the price explosion. There have been more than 30,000 price increases since the General Election. That is the appalling extent of the Government's failure to keep their election pledge.
If the Minister wants to compare rises in the price of food in Britain and Norway—whose people at least had the chance of voting to stay out of the EEC—he can consult a recent parliamentary reply to one of his hon. Friends. Between 1972 and 1973, food prices in Britain went up by 15.1 per cent. and in Norway the increase was only 5.2 per cent. Norway is not the only country to be compared with Britain in that reply. For Switzerland the increase was even less—at only 5 per cent. In Sweden it was only 5.8 per cent. As my right hon. Friend the Member for Battersea, North (Mr. Jay) intervenes to remind us, they are all countries outside the EEC.
The reply to which I referred was received by the hon. Member for Holland with Boston (Mr. Body). It fully documents the case we have been making in the House about the effect on our food prices of our membership of the EEC. The reply came from the Parliamentary Secretary to the Ministry of Agriculture. Fisheries and Food to her hon. Friend. 1055 Her figures are much more eloquent and convincing than the right hon. and learned Gentleman's apologia tonight.
I appreciate that the right hon. and learned Gentleman was unable to refer to sugar. Nevertheless, there are those of us on both sides of the House who are deeply anxious not only for the future of the Commonwealth Sugar Agreement but for the very existence of the International Sugar Agreement. It was put to me only today that there is great anxiety among our friends in the developing Commonwealth countries about the EEC's attitude to the new administrative ISA. I ask the Minister to ensure that the Chancellor of the Duchy of Lancaster makes a statement to the House at the earliest possible opportunity on the EEC's present attitude to the new administrative International Sugar Agreement.
Far from exaggerating, my right hon. Friend spoke with studied moderation. I hope that the House as a whole will take all his points much more seriously than the Minister did. We must put an end to unnecessary increases in food prices. The import duties before us are part of a whole system which those of us on both sides who object to the conditions negotiated for British entry to the EEC want to dismantle. The need is urgent. Indeed, urgency has never been more urgent.
§ 8.26 p.m.
§ Mr. Neil Marten (Banbury)
I support what the hon. Member for Machester, Wythenshawe (Mr. Alfred Morris) said about the International Sugar Agreement. The point he raised very briefly is most important.
With regard to what the hon. Gentleman said about the increase in the price of food as between the EFTA members and the EEC members, there was another Written Answer—I think it was in HANSARD last week—which I received from the Minister and which showed that food prices in the Common Market have risen about three times as fast as those in EFTA, if we exclude the associate member, Finland, as I think we can, and Iceland, which is a very new member and has a particular problem about fish.
§ Mr. Alfred Morris
I must consult the reply given to the hon. Gentleman. For the guidance of the House, I should like to say that the reply to which I referred 1056 in my speech was given by the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food to the hon. Member for Holland with Boston (Mr. Body) on 9th November, and appeared in Volume 863 of HANSARD, at column 290.
§ Mr. Marten
I am grateful for that intervention, because it allows me to explain that when I saw that answer I did not think that the dates for which my hon. Friend asked were quite the best. I asked about the rise in prices from 1st January, when we joined the Common Market. I worked out from the answer that Common Market food prices rose three times as fast as those in the genuine old EFTA club to which we belonged, and to which I wished we still belonged.
I return to the Prayer. Many of the remarks made by the right hon. Member for Stepney (Mr. Shore) covered my feelings about the whole question. What he said about the balance of trade with the Common Market is true. Many hopes that were held out to those who were encouraged to vote for entry are now falling flat on their faces. They are not materialising. It may be out of order to quote the word used in the front page headline of The Guardian today—[HON. MEMBERS: "No; it is a good word."] It was a good word, but I ask hon. Members to read The Guardian to save me the embarrassment of quoting that extraordinarily apt description of the Community.
I want tonight to speak on a limited theme. I take it as an example, but the argument follows what the right hon. Member for Stepney said. I wish to refer only to the 8 per cent. tax on imported lamb. My hon. Friends and I have been fighting to prevent this tax, and Motion No. 48 has been signed by 30 right hon. and hon. Gentlemen on the Government side of the House objecting to that 8 per cent. tax on imported lamb.
Paragraph 15 of the consultative document of the Government's counter-inflation policy clearly sets out that pay increases for the group should be 7 per cent., yet the Government themselves propose a tax of 8 per cent. on imported lamb, and that must be outside the spirit of phase 3. In many households, when they can afford it, lamb is the traditional Sunday lunch. When short of housekeeping money, which is fairly often 1057 these days, my wife, when I ask for beef on a Sunday, says that it would be much cheaper to have lamb, and we have some excellent New Zealand lamb when we can afford it. But there are other families who cannot always afford a joint on a Sunday and it is absurd that an 8 per cent. tax on lamb should be imposed at this very time when the Government are trying to keep down the cost of food. This tax is especially important for families like that.
I hope that the Government will frankly admit that this tax is entirely the result of our membership of the Common Market. The population of this country must be made to realise that that is the cause of this extra tax.
Some time ago, I asked the Prime Minister why we had to impose this tax, and he straightforwardly replied that it was because of the Common Market.
On 13th November I had the opportunity to catch Mr. Speaker's eye and I was able to ask the question again, and my right hon. Friend then replied that the tax was being considered. Some of us were rather pleased about that and thought that perhaps our questioning and pressure were beginning to take effect. We thought that, if not at the summit meeting, at some lesser meeting of the Council of Ministers, our Ministers would be fighting for the British housewife and the British family and to stop this 8 per cent. tax.
I should like my hon. Friend the Under-Secretary to say—he may not know the answers—what was done when the Prime Minister said that the matter was being considered. Was the Common Market approached? If so, when and who was approached? Did we ask specifically, and is there a record anywhere of the possibly secret meetings of the Council of Ministers to show that we asked to be relieved of this tax in view of our domestic circumstances? Did we try to renegotiate this aspect and finally did we say that whatever the Council of Ministers said we should not impose it? Did we take a tough line for the housewives of Britain? I fear that the answer may be that we did not go as far as that, and the reason for that was that we had already lost our sovereignty in that respect.
1058 When they know that they have to pay 8 per cent. more, or however it works out, the housewives of Britain will be angry. Speeches will be made about it, so that they will know that it is entirely due to our joining the Common Market. It is curious that it should be imposed at this very moment, because for the past few months if the Government have done anything, they have done their best—with little ammunition—to make the Common Market popular in this country. It is, as every poll tells us, very unpopular and is getting more unpopular almost every day. The Government wish to make it popular, but in fact they make it more unpopular with every housewife.
Hon. Members will know—because I have mentioned it in the House before—that the Conservative Central Office is joining in the propaganda to show what a splendid thing the Common Market is. Each week it publishes—and it now acknowledges that it publishes it—a "Europoint". It says, "Joining the Common Market was a jolly good thing: here is a point". One or two matters have not been presented in fairness, and I have written to the Chairman of the Conservative Party and to the Chancellor of the Duchy of Lancaster about the matter. It is said that the steel industry has been given a loan of £13.4 million and that £3.5 million has been given for the development of something else. One would imagine that that was very good for this country. But we are not told that we have had to contribute £45 million in return. The full commitment is a contribution of £225 million to the European banks. This is very bad business.
All I am trying to illustrate is the strong desire of many Members on the Government side of the House, who mostly support the Government, except on the Common Market issue, that this "Europointage" should be presented absolutely fairly. I therefore hope that Europoint No. 10 will be about the 8 per cent. tax on lamb.
If I vote against the order—and I hope that the Government Whip sitting on the Front Bench has noted that—I make it clear that I shall do so simply because I oppose the imposition of an unnecessary tax on food, particularly at this time. I have made that clear in my constituency, and I must be as good as 1059 my word to my constituents. The Government must be aware of my attitude because of my questions to the Prime Minister and the motion on the Order Paper. It will therefore come as no surprise to them if I vote against the order.
§ Mr. Arthur Lewis (West Ham, North)
The hon. Gentleman will be in good company, because I remember reading the Prime Minister's election address, in which he said that he would cut prices, particularly food prices. Therefore, will not the hon. Gentleman be supporting the Prime Minister's excellent statement that if he were returned to power, as he was, he would cut food prices?
§ Mr. Marten
I cannot see my right hon. Friend the Prime Minister voting with the hon. Member tonight, but I know that he would find it agreeable.
The Government are aware of my opposition to the Common Market and to the food tax on lamb. My right hon. and learned Friend the Minister for Trade and Consumer Affairs recognised that the opposition to the order was logical for those who oppose entry to the Common Market. I appreciate that and I am grateful for it, because throughout the debates on the Common Market we have been well treated by members of the Government Front Bench, who have accepted that our opposition comes from the heart and is for the best of motives for our country. That has always been the spirit in which our debates have been conducted. I hope that if I vote against the order tonight my vote will be taken in a similar spirit.
§ 8.39 p.m.
§ Mr. Douglas Jay (Battersea, North)
I can help the hon. Member for Banbury (Mr. Marten) in one respect. He asked whether there was any reason other than the Common Market for imposing the food taxes included in the order. It is stated on the first page of the order—this is one of the clearest things in it—This Order does not increase duties of customs other than in pursuance of a Community obligation.That makes it quite clear, and it might perhaps be included in one of the Euro "fables" put out by the Conservative Central Office.
The Minister's speech made it easier for us all to understand why the country is in such a disastrous situation. What 1060 an incredible moment this is for the Government to introduce the widest series of new food taxes that we have known for generations past.
There is no defence for these new and increased taxes. They have no purpose other than fulfilling a Community obligation. Their only effect will be gratuitously to force up the cost of living and make any fair incomes policy unacceptable. We are being asked in a mere three hours' debate to abandon the policy of untaxed food that has been broadly in force with all-party support for 100 years and more. Perhaps we might rely on the Members of the Liberal Party, who were here in depth earlier but have not stayed for an answer or to exert their full strength in the lobby—
§ Mr. Arthur Lewis
In my constituency I have a Liberal opponent who tells me that the Liberals are anxious to bring down the price of food and the cost of living. Is my right hon. Friend saying that by their support of entry into the Common Market Liberal supporters are responsible for the increase in the price of food?
§ Mr. Jay
I know they are not here, but they might conceivable be somewhere else in the building.
Let everyone realise that the new import duties on food included in the order are additional to the levies imposed on these and other foodstuffs in ways other than by the order. The increases are introduced not for a good reason connected with British interests but because of the Prime Minister's abject surrender to Mr. Pompidou. That is why these import duties and levies on butter and cheese amounting to 50 per cent. are being imposed. Nor is it any excuse to say that the duties on some foods included in the order are going down while others are going up. Taxes on essential food should not go up, whether or not others 1061 are going down. No such tax should be in force, least of all at a time like the present. There is no substance in what the Minister said about there being a net fall on balance. The House will observe that he found it impossible to apply that remark to food. He admitted that on food there would be a net increase.
It cannot be said that the increases are trivial or that they apply only to secondary foods. Although the Government may hope to conceal the reality by the vast and confusing complexity of the order, it is instantly damaging in itself and contrasts with the relatively simple import tariffs which we have had until now. The reality is that on a whole series of essential foodstuffs new and increased tariffs are imposed by the order on our supplies from virtually the whole of the old Commonwealth, from parts of the Asian Commonwealth and even in some cases from other EFTA countries.
The right hon. and learned Gentleman appeared to say that there was no increased tax on beef. If the order does not impose an additional import duty on beef either in January or March next year the Minister is introducing into the House an unintelligible order, but no doubt he will explain that later.
As I see it, a new tariff is imposed on beef supplies coming from the old Commonwealth, starting at 4 per cent. and due to rise eventually to 20 per cent. That applies to imports from Australia, which is an important producer and exporter of meat, and whose importance as a meat-exporting country is increasing. On mutton and lamb there will be a tariff of 8 per cent., plus a specific duty that before long will rise to 20 per cent. It seems to me to be an act of near insanity in economic policy deliberately to deprive the British consumer of low-cost supplies of lamb from Australia and New Zealand, since those countries are the world's most efficient producers of mutton and lamb. Furthermore, those commodities are not produced or consumed on any substantial scale in EEC countries. The only purpose of this provision will be to force up lamb prices in case people eat mutton and lamb instead of beef—as a result of which, horrible to relate, the price of beef might come down! That is the only purpose I can see for this extraordinary new tax.
1062 For fish of almost all kinds there is to be a new tariff apparently affecting in some cases even supplies from EFTA countries and associated Commonwealth countries. Perhaps the Minister will explain the purpose of an increased tax on fish supplies from EFTA or even associated Commonwealth countries. The same can be said of eggs, potatoes and most other vegetables, where apparently there are also to be increases applying even to some EFTA countries. There is also to be a new tax on bananas and oranges as well as on tinned fruit—bananas and oranges previously being tax-free. In other words, there is to be a new tax on all supplies from outside the EEC and associated countries. Can the Minister confirm that there will be no tax on bananas from the Caribbean Commonwealth countries?
Will the Minister also explain why apparently some categories of tea from the Asian Commonwealth will have to pay a new duty? Can we at least assume that the vast bulk of normal tea supplies from India, Pakistan, Bangladesh and Ceylon will continue to come into the country tax-free? This is a commodity that is not produced in the EEC countries and is not consumed on the Continent in anything like the quantity in which it is consumed in the United Kingdom. Therefore, it is difficult to imagine any purpose in imposing an import tax on tea.
May we be told why certain categories of maize imported into this country will attract duty when we know that the high price of feeding stuffs is now imposing a great burden on the British farmer and is forcing up prices generally? What is the purpose of that duty?
If all these matters were contained in a Finance Bill, no doubt we should be spending hours, and indeed days, in probing each individual commodity and finding out what was happening. Instead of such an exercise, we are being asked today to judge 770 pages of tariff changes in only three hours. On top of all these items margarine is to bear a 10 per cent. import duty. Is this to ensure that the consumer will be able to find no alternative to buying the dear butter that is available in the Community? If there is some other reason for taxing margarine, perhaps we shall be told.
1063 In addition, there are to be new duties on manufactured meat and fish products, sugar confectionery, malt extract and even salt, apart from a number of other secondary foodstuffs. The prices of all these foods will be forced up not by world prices, as we are told so often, but by the deliberate decision of the Government in introducing this battery of taxes on essential foods. To my mind, it would be almost impossible to imagine a more reactionary, more divisive and more stupid policy than to introduce a gratuitous régime of dear food enforced by taxation at this of all moments.
When the Prime Minister makes his appeals for justice, fair play and national unity in his TV appearances or even in this House he does not mention that behind his back he is deliberately introducing a dear food policy. This order undermines and disproves entirely the sincerity of the right hon. Gentleman's appeal for national unity.
I am a believer in a fair and workable incomes policy, but I am not in favour of enforcing anything like stage 3 and at the same time introducing this order. The order alone would justify organised groups of workers in resisting stage 3, and that is why the Prime Minister never mentions these food taxes in any of his speeches.
This House could contribute to the economic recovery of this country if it took its opportunity tonight to throw out this order root and branch. People are beginning to talk a good deal about subsidising food. But what is the sense of taxing food and subsidising it at the same time? Let us at least get rid of the food taxes and levies first. After that we can talk about food subsidies. Let us begin by throwing out this indefensible order.
§ 8.53 p.m.
§ Mr. Ronald Bell (Buckinghamshire, South)
This order is the first instalment of the imposition of duties upon foodstuffs entering the country in accordance with the EEC Accession Treaty. We have already come to live with levies, intervention boards and all the consequences flowing from them. With the order we start upon a new path, that of direct entry taxes on food.
1064 We have known for some time the general shape of the Community agreement, but when we look at some of the taxes in the order—those on lamb, margarine and fish products—we are not considering taxes which are self-evidently imposed for the protection of some intra-Community activity. We shall not get lamb from the Community, nor fish products, nor margarine, which is in its origin a tropical product. Therefore, the duties can only be imposed at best for some indirect Community purpose progressively to shut us off from these sources of foods in order that we may concentrate our consumption on those which are produced in Western Europe.
When considering and assessing the overall effect of the order, my right hon. and learned Friend must bear in mind that there is a lack of substitution. We are not raising the price of lamb from New Zealand and replacing it with lamb from France. If the price of lamb from New Zealand is raised, either people will pay the full amount of that increase or they will have to buy beef or another product.
My right hon. and learned Friend must also remember that one of the disadvantages of this procedure is that we cannot pick upon particular items, as we could in the Finance Bill, and say "Yes, there are some good things in the order but we do not like some matters." We are asked to take approximately 800 matters and pass them all or reject them all. It is a bit much for my right hon. and learned Friend to say that we must set off one against the other, make a final addition and pass the order. That may be the result of the procedure, but it should not be.
The order, on the face of it, is made in the execution of Community obligations. My right hon. and learned Friend deprecated any reliance upon an argument which was inconsistent with the obligations which we assumed on accession. When the European Economic Community Bill was passing through the House we were assured over and over again that the sovereignty of Parliament was not being taken away from us and that ultimate sovereignty would remain with Parliament.
When we asked whether we would be hauled before the Community Court for 1065 breach of our obligations if we did not agree with some of the Commission's proposals, we were told repeatedly that we did not understand the spirit of the Community. We were told that that was not the way in which it worked. We were told that everything was sweetness and light, that there was tolerance and understanding. We were told over and over again that we could not be forced to do anything which we did not want to do. That phrase was heavily relied upon, and I rely upon it tonight.
If it were true, as we were assured by people whom we had every right to believe and trust, that sovereignty would remain with Parliament and that we could not be forced to do anything which we did not want to do, now is the occasion to put those assurances to the test. I have no access to the inner records of the European Community, but I have no doubt—and my hon. Friend the Member for Banbury (Mr. Marten) asked the question—that our Ministers were beavering away trying to persuade the Community not to require an 8 per cent. duty on lamb. What British Government would want an 8 per cent. duty on lamb? Why would they want it? Why would they want such a duty on margarine or on fish products such as herrings and tomato sauce?
British Governments do not want duties on anything like that. Of course, the Government argued that duties should not be imposed; they were unsuccessful. They have a lot of things to ask for and they cannot have them all. This is rather near to the Ark of the Covenant for the real Marketeers of the Continent. They do not want to do it.
My intention tonight is to help to do for the Government something which the Government would find it embarrassing to do themselves. It is in that spirit of helpfulness and co-operation, at a time when co-operation of that kind is more called for than ever before, and upon an assessment of the priorities which I am sure will commend itself to my right hon. Friends, that I shall take the step that I propose to take tonight.
I was a little sorry that my right hon. and learned Friend sought to minimise, or perhaps I should say lessen, the importance of the short-term problem in relation to the long-term opportunities. 1066 I have a slight advantage over my right hon. and learned Friend, in that I do not believe in the long-term opportunities. I insist that the problems facing this country, and which preoccupied us earlier today, are relatively short term. Some may say that they will be with us for three months, others may say that they will last for a year, and others again may argue that they will be with us for two years. But it is the short term with which we are essentially concerned and which ought to have complete priority. It is in that spirit of helpfulness, and that estimation of priorities, that I shall vote in favour of the motion tonight.
§ 9.1 p.m.
§ Mr. E. Fernyhough (Jarrow)
When the Minister replied to my right hon. Friend the Member for Stepney (Mr. Shore), his attitude towards the decision that we have to make tonight was very much in keeping with his attitude when he was pushing through the Industrial Relations Bill. The right hon. and learned Gentleman used to tell us that once the Bill became a statute everything would be lovely, peaceful and happy, and there would be no more turmoil.
The right hon. and learned Gentleman tried tonight to tell us that these new regulations—these new impositions—will have an infinitesimal effect on food prices. He says that it will amount to between ½ per cent. and 1 per cent., but he has not told us what ½ per cent. or 1 per cent. means in total, and until we know that we cannot measure how injurious the result will be.
But what we know is that today the Chancellor made a serious statement to the House. The Chancellor is concerned about inflation, and so concerned and determined is he to fight it that he is prepared to stand up to the miners, the railwaymen and the electricians even though the bill to get them working full time again would not be one-quarter of what these regulations will cost the country. The Government's sense of priorities is fantastic. They could settle our industrial troubles for one quarter of the amount that they are to impose upon the British people on 1st January by way of extra food taxes.
The Prime Minister told us last Thursday, in a speech that was as amazing as the Chancellor's today, that from 1st 1067 January people will be working on short time, for three days a week. What a marvellous way in which to get the workers to co-operate! Their wages are to be cut, and their food is to be taxed. In other words, their food bills will go up while their incomes go down. What did the Minister say? This is what the Government want because it will provide the necessary export capacity. We take things from our own people and send them abroad.
If I could ask for one power, it would be the power to make the right hon. and learned Gentleman read the last speech that I made before we signed the Treaty of Accession. It would do him a world of good. Every forecast that I then made has proved correct. Every forecast that the Minister then made has proved to be wrong.
As the hon. Member for Banbury (Mr. Marten) said, it is not only that we apparently never have a victory or never get our way; it is the marvellous manner in which every Minister who defends these defeats turns them into victories. We have had only one victory. That occurred last week. The Minister of Agriculture was able to prevent the EEC putting over the idea that to use up the butter stocks we should insist on butter being put into ice-cream. That is the greatest victory that we have had. That was the one time when we stood and said what the contents of a particular commodity shall be. Our Minister said "No butter", because that would have been an impossible position for him to defend. He can defend an 8 per cent. increase in the price of lamb and increases in the prices of tinned salmon and tinned fruit without qualms or difficulties. But we put up a great fight on the question of the content of ice-cream.
In relation to the source of these regulations, we had a Summit conference last weekend. The Prime Minister attended that conference. What was the Prime Minister talking about in Copenhagen? I am sure that he must have discussed Britain's immediate economic problems. Why was he not telling the representatives of the eight other EEC countries that we could not accept this kind of thing, particularly at present? Just as Ministers bring nothing back from Brussels except defeat for the British 1068 public, it seems that the Prime Minister lost on every issue in Copenhagen. We were to have had a £l,500-million-a-year regional policy. The latest figure has dropped to £50 million. We can be almost certain that we shall get nothing out of it.
Does the right hon. and learned Gentleman really believe that this debate, which is likely to be widely reported, will help to sweeten the soured industrial situation at a time when, as a result of the mismanagement of the economy, the Government are trying to place all the responsibility for the economic situation on the miners, and at a time when the overwhelming majority of trade unionists in Britain believe that they have not had a fair deal from the Government? Does the Minister believe that this is the time for him to announce that another few hundred million pounds will be added to the food bill next year? Does he believe that the public will enjoy paying that bill all the more when the money will not be spent in Britain because when we have collected it we shall have to send it across the water to the EEC?
To impose taxes upon our people but for us not to have the right to say what shall be done with the money when it is collected, to impose taxes at the ports on any imports and not to have control of those taxes, is giving away not only the rights of Parliament but the rights of the British people. I tell the right hon. and learned Gentleman that if he and his colleagues continue with a policy of this kind, the difficulties that Britain face today will be the bigger the longer the Government stay in office.
§ 9.10 p.m.
§ Mr, Roger Moate (Faversham)
Any order which imposed an 8 per cent. tax on imported lamb from New Zealand would be objectionable. But today, as many hon. Members have pointed out, it is extraordinary to seek to introduce an order of this nature.
Earlier today the Chancellor of the Exchequer told the House and the nation of the many sacrifices that we shall be called upon to make in the coming months. Within a few hours of that statement the Government are seeking to introduce an order imposing an 8 per cent. tax on lamb. It is an extra burden to be placed on the British people, 1069 leading to the inevitable effect of increasing the cost of the Sunday joint.
What is extraordinary is that it is an avoidable burden. At a time when the Government, rightly, have been saying that the higher food costs are the direct result of world prices, we are introducing something that is avoidable. My right hon. and learned Friend sought to show that the Government were taking into account the advantages and disadvantages and that the order might be beneficial to our cost of living. That may or may not be the case.
§ Mr. Moate
—he would know that there is a substantial area of doubt. There is no doubt about the positive effect on the cost of food in that respect. The Government have made it clear that the cost of food, as a result of the order, will go up by ½ per cent.—[An HON. MEMBER: "Or 1 per cent."] Indeed, perhaps by 1 per cent.
§ Mr. Arthur Lewis
Is it not the case that Ministers' figures are always proved wrong? We were continually told that there would never be a 15p loaf—that it was never possible. Their figures are always wrong.
§ Mr. Moate
It is obviously difficult to quantify these matters, but what is not in dispute is the fact that this order, certainly as it applies to lamb and other foodstuffs, will create an increase.
The Government are seeking to impose the order at a time when we should be avoiding increases of this nature. If the rest of the order were beneficial, and 1070 that were the single adverse point, I would still say that it was objectionable on that basis. If the Government say that that is unreasonable, I say that the procedure that brings forward an order of this nature, 722 pages long, incorporating many items of an objectionable nature, is also unreasonable. I do not think that the Government will be surprised to learn that many hon. Members on their side of the House cannot vote in support of something that imposes food taxes at this time.
The right hon. Member for Stepney (Mr. Shore) pointed out earlier the effect of the order on New Zealand. The New Zealand Meat Board Development Committee has given instructions to the meat producers to divert their supplies to other countries. It is possible that a major diversion would mean that the net price increase to housewives in this country would not be felt in the short term, but that is hardly an attractive alternative—on the one hand being faced with a price increase of 8 per cent., rising to 20 per cent.—that should not be overlooked—or, on the other, diversion of our traditional lamb supplies to other countries, including Japan, other parts of the Far East and other European countries. This diversion conforms with the direct public instructions of the New Zealand Meat Board Development Committee. I do not believe my right hon. and learned Friend's heart is in defending this order.
If that were the sole objection to the order, it would be enough for the House to reject it. But I also do not think that we should overlook the general significance of the order in its implications for our industrial tariff policy. We are moving towards a situation which is fundamentally objectionable to the philosophy that we have been pursuing for some years.
My right hon. and learned Friend argued that a reduction of tariffs was very beneficial to us in our trade with Europe, and that it would help us expand our opportunities within this large market, but if that is true for Europe, why is it not also true of the other markets with which we have habitually traded? Why are we using this opportunity to raise industrial tariffs—a fact that my right hon. and learned Friend cannot deny—on imports from many other countries?
§ Mr. Ronald Bell
Will my hon. Friend also bear in mind that the initial effect of the lowering of tariffs between ourselves and the Community countries has been the emergence of an enormous deficit in our balance of trade, and that, presumably, lowering them even more will exaggerate it?
§ Mr. Moate
I shall not dispute that it is often advantageous to this country to reduce the level of protection, but no country faced with a massive deficit of £1,000 million, with very poor prospects in the coming months, would reduce tariffs against that market at this time. Yet we are forced to do so by the obligations into which we have apparently entered. I would argue in general terms that this commitment to raise tariffs against many of our traditional trading partners, as embodied in the order, is objectionable.
We should recall the attitude of the French Government in the recent negotiations leading up to the preparation of a position for the GATT talks. An American objective was then stated, that we should work towards zero tariffs. This, broadly, fits in with the philosophy of our Government. But the French made it clear that the tariffs should not be allowed to fall below a minimum level because they had a political as well as an economic purpose.
So we have a broad clash of philosophy between the British position, which, broadly, is a belief in reducing international tariffs, and the French, who wish to see the common external tariff retained as an important foundation of the EEC. At some point this clash has to be resolved, and it must be resolved in our favour, not just because it is a British interest but because it is a world interest to try to bring down the level of industrial tariffs.
I regret that the Government have introduced the order. I had hoped from the reply of the Prime Minister that, in the situation of crisis that we are facing, the Government would say that they would not persist with this imposition at this time. I am sure that my right hon. and learned Friend must understand that those of us who have been pressing for some months on this question, particularly the tax on lamb and the general imposition of increased food taxes— 1072 which is what the order is about—could not be expected to support the Government in the Lobby tonight.
§ 9.18 p.m.
§ Mr. Nigel Spearing (Acton)
It is a coincidence that this debate follows upon the announcement earlier today. But I fear that it may not be generally known in the country that if the order is passed it will subject the British public to considerable taxation. We have heard about 8 per cent. on lamb and an unknown percentage on beef. My calculations show that the tax on tinned foods will total about £4 million—not an inconsiderable sum.
Any Government supporters who vote against the motion and, therefore, for the order will, if the time comes shortly—some people think that this is what the Government are at least manoeuvring for—have to show their constituents why they voted for increased food taxes in the Christmas Budget of 1973. That Budget will probably go down in British history as a turning point.
Some time ago, when the Prime Minister was interviewed on ITV before the Common Market decision had been taken, the interviewer asked:Will the people be able to earn more to pay for the extra food costs which we expect under the Common Market?In his inimitable way, the Prime Minister replied:Yes, people will have the opportunity of earning more.The word "opportunity" falls very easily from the lips of many hon. Members on the Government benches. Many people have the opportunity of getting a prize from Premium bonds, but that does not mean that the odds in favour of their doing so are very high. But now, rather than having the opportunity to earn more in 1974 to help pay for increased costs, it seems that the reverse will be the case.
§ Mr. Peter Rees rose—
§ Mr. Spearing
I shall not give way, because time is short. The hon. and learned Gentleman voted for the impasse in which we find ourselves, and he has not been present during the whole debate. The Minister, in opening, said he thought that there would be an increase to ¼ per cent. to ½ per cent. in the cost of foodstuffs. He did not give a 1073 global sum in pounds, and I hope that in concluding the Under-Secretary will do so, because it is essential that the Government should tell us their estimate of what extra housewives will have to pay after 1st January. The right hon. and learned Gentleman said that his estimate depends upon certain prices going down. He expects that the benefit of cuts in tariffs on imports from the Common Market will be passed on to the consumer. Does he not know the principles of his own supporters on a free market in food? If the cost of imports goes down because of a cut in tariffs, the saving will not be passed on to the housewife. The middleman will benefit, or it will be absorbed in extra costs. Therefore, I suspect that the estimate of an increase of ¼ per cent. to ½ per cent. is much too low, and I hope that the Under-Secretary will in due course provide us with a table showing how it is calculated.
A lot of us believe that this policy of the Government has been in preparation for a long time. The last election was fought partly on the issue of food prices, and the Prime Minister pledged to cut them. A lot of people gave him the benefit of the doubt and believed that that was a sincere objective. But I have here a publication of the Conservative Political Centre, entitled "The Farming Future", which was published in January 1970. It deals with the future of food prices and on page 13, under the heading "Eggs", it states:But the cost of competitive foods like meat and cheese will also be increasing and are likely to lead to compensatory increases in egg prices.The author of that article was none other than Mr. Joseph Godber. So it appears that the Government were well aware that price increases were coming, particularly in proteins. We have to consider not merely increases in costs, but the impact of those increases on alternative foods.
We know that the prices of tinned food—if we can get the tin—will be increased under this order, due to the tariffs to be imposed upon goods coming in from what have been tariff-free Commonwealth countries. I understand that we import approximately between £50 million and £60 million worth of tinned salmon every year, two-fifths of which is Canadian. A 5 per cent. tariff is to be imposed in 1074 January, amounting to approximately £600,000, rising to 13 per cent. m 1977. I also understand that approximately £15 million worth of corned beef and tinned steak comes from Australia. Either on 1st January or in April, a 5.2 per cent. tariff will be imposed, amounting to £1½ million. Approximately £50 million worth of tinned fruit is imported, and on 1st January tariffs amounting to £1½ million will be imposed, rising to 16 per cent. in 1977, so that approximately £4 million worth of tariffs will go direct to the EEC on 1st January in respect of tinned fish, tinned meat and tinned fruit alone. The Minister must acknowledge that my figures are roughly correct, because they were quoted last Monday in a speech of my hon. Friend the Member for Colne Valley (Mr. David Clark) and were not quarrelled with at that time.
Finally, the right hon. and learned Gentleman produced something of a triumph, to which my right hon. Friend the Member for Jarrow (Mr. Fernyhough) referred—a triumph of reducing the duty on pineapple. As I understand it, Malaysian pineapple was to be charged a tariff of 24 per cent. by 1977. My information is that this has now been reduced to 12 per cent. Therefore, instead of 4.8 per cent. on 1st January we have to pay only 2.4 per cent. This has been put to us tonight as a triumph. If this is being put to us as a triumph, the failure of the Government in their total policy in this respect is abysmal indeed.
§ 9.25 p.m.
§ Mr. Eric Deakins (Walthamstow, West)
This has been a very dry subject to debate. Nothing could be more technical than the subject of import duties. However, it has not been a very dry debate. It has been very emotional, particularly on the vexed question of food prices. It has been emotional also because what we are concerned about is the nation's very lifeblood as a trading nation unlike any other nation.
We have been concerned with the biggest change in duties for 40 years, perhaps the biggest change since the abolition of the corn laws. Mention of the corn laws reminds me that the Liberals have not spoken in this debate. The Liberals are the party of free trade. I hope that, though they have not spoken, the Liberals will be able to support us on this issue in the Lobby tonight.
1075 The debate has been overshadowed by the Chancellor's statement this afternoon. Yet at the same time the debate has been made all the more relevant and urgent as a result of that statement. As Dr. Johnson said—I am sure that this will be known to hon. Members—Depend upon it, Sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.This debate has concentrated our minds wonderfully, because the order comes into effect in a fortnight and involves fundamental changes in Britain's pattern of duties and of trade.
A number of hon. Members were unable to catch your eye, Mr. Speaker. I sympathise with them, because I know from experience that many of the best speeches in the House are those which are never made because of shortage of time. Nevertheless, all those who spoke, from both sides, were against the order. I hope that they will forgive me if I do not directly at this stage allude to food prices, which had a very good airing from everyone who spoke.
I want to consider first whether the changes in the order are desirable. There are several areas of concern. The first, which has been alluded to by a number of right hon. and hon. Members, is the effect on Commonwealth countries. Commonwealth countries are to lose part of their preference in our market. Does not this mean a likelihood of our losing the preference we had in their markets? Is that good news for British exporters? Is it desirable to weaken trade links which help bind together the world's only multiracial community outside the United Nations? I think not.
What of the very serious issue of the Asian Commonwealth countries? This was one of the difficult problems during the negotiations, and it was postponed to be dealt with after we had become a member. Then in the Treaty of Accession we had the Joint Declaration of Intent in January 1972. However, so far as the House is aware, discussions are still continuing and have still not been finally resolved to the satisfaction of the countries concerned, as we were promised during the debates on the European Communities Bill last year.
This is an important matter, because an examination of the order and of the duties on a number of sensitive products 1076 for these countries gives cause for worry. I will mention just a few—plywood 5.2 per cent.; footwear 8 per cent.; tinned fruit 6.4 per cent.; tea in small packets 2 per cent.; shellfish, especially prawns—of great interest to Malaysia—8 per cent. All of these products have nil duties at present on entry into this country.
On this issue I have two questions to ask the Minister. Of the first, which is about tobacco, I have already given him notice. The order shows a nil duty on tobacco, but the Common Market in its document on the first stage of implementing the Joint Declaration of Intent, which is dated 24th October, claims that the duty into this country ought to be 10.3 per cent. on tobacco, but for the first year as a special concession it has suggested that the duty should be only 6 per cent.
I do not understand why no duty is shown in the order. There may be a rational explanation, but it is perfectly clear that, whatever it is called, the amount of tax on non-manufactured tobacco from the Asian Commonwealth countries is to be raised, and it will undoubtedly hit tobacco exports, as the tax will hit other exports from those poor countries. Can the Minister assure us that duties will not be imposed on products from Asian Commonwealth countries pending a satisfactory outcome of the discussions on the joint declaration of intent and on an improved generalised scheme of preferences? If the Minister cannot give this assurance, the imposition of the order will definitely harm the trade of those poor countries, and we are completely opposed to that.
There is concern about the generalised scheme of preferences. Evidently the order takes account only of the existing United Kingdom scheme. This is an important matter for Common Market trade relations with poor countries generally, and particularly for the Asian Commonwealth countries. Both the existing Common Market scheme and the possibly improved scheme, discussed in recent months, are based on quotas, which were roundly condemned at the recent United Nations Conference on Trade and Development, held in Santiago. It is stated in a resolution from the conference that the countries should:provide duty-free and quota-free entry to imports from all developing countries under the generalised system of preferences ".1077 That motion was accepted by our Government, yet they are now to adopt the generalised preferences scheme as members of the Common Market. This runs completely contrary to the resolution of the conference.
Moreover, the Common Market generalised preferences schemes—both the existing scheme and the improved scheme—are much less generous, as the Minister has admitted, both in the range of agricultural products and in other areas. Is this the time to be contemplating the imposition of harsher trade terms on poor countries? If a new range of duties will be necessary after agreement with the Common Market on an improved generalised preference scheme, why alter our existing system of entry for products from poor countries?
Another area of concern which has not yet been alluded to is that we are now to become entangled with the Community system of reverse preferences with particular countries, associated States. We find these objectionable. They are a form of economic imperialism whereby the reverse preferences are used to create a network of client States, a trading bloc working completely against the principles which the House holds so dear; namely, fostering and furthering multilateral free trade.
The reverse preference is contrary to GATT, but the Government appear to have ignored or forgotten their GATT obligations. GATT is not dead, and it is time the Government did more than pay lip-service to their obligations under GATT. Reverse preferences were also condemned by the Third United Nations Conference on Trade and Development. A resolution from the conference said, among other things:Developed countries shall… accord trade concessions to all developing countries on a strictly non-reciprocal basis …There is no doubt that reverse preferences are illegal and immoral. If the Government still support their GATT obligations, why are we making changes in our duties to bring us within the network of trade agreements that run contrary to the letter and spirit of GATT?
Are the changes—irrespective of whether they are necessary—desirable at 1078 present? There has been a lot of reference in the debate to putting taxes on food. We have heard about 8 per cent. tax on mutton and lamb; 6.4 per cent. on tinned fruit; between 5 and 12 per cent. on prepared meats and fish: and 10 per cent. on margarine.
§ Mr. William Molloy (Ealing, North)
Is my hon. Friend aware that the Chancellor was speaking to the nation tonight explaining the mess into which he and his colleagues have got things? He said that there would be no harsh taxes to hurt the housewives and so on, but forgot to mention this order, which will do just that. Is this not a form of taxation by deception?
§ Mr. Deakins
I do not know whether it is deception but it is certainly hypocrisy to say one thing and do another. There is no doubt that any increases in food prices are to be deplored. All speakers have made the same point. They will raise the cost of living at a time when Government policy is to counter inflation. This is surely absurd, particularly when, as we have been told, our Minister of Agriculture is trying to get food levies reduced in Brussels. Here we are putting duties on food.
We want to be able to buy the cheapest food available in world markets. If the Government would try to reform the common agricultural policy in that way they would have the support of the whole House. But they are not trying to do that. What is the advantage to the British people of the new trading pattern towards which we are moving? Great optimism was expressed on this subject by the Labour Government in their White Paper Cmnd. 4289 when they said, among other things, that the balance of payments deficit as a result of entry into the Common Market should be between £125 million and £275 million. This optimism was repeated in the Government's White Paper Cmnd. 4715 when they said:The Government do not believe that the overall response of British industry to membership can be quantified in terms of its effect upon the balance of trade. They are confident that this effect will be positive and substantial.Well, at least they got it half right. It has been substantial but entirely negative.
The third piece of optimism, much more recent, came from the right hon. Member 1079 for Argyll (Mr. Noble), the then Minister for Trade, who, speaking in a Common Market debate last year, and dealing with an amendment to Clause 5 of the European Communities Bill, said:The right hon. Gentleman"—he was referring to my right hon. Friend the Member for Battersea, North (Mr. Jay)—said that we are bound to have to accept more imports from the European Community than we can send it exports. That is his personal view. It is not one that is shared by me, and it is certainly not shared by industry."—[OFFICIAL REPORT, 21st June 1972; Vol. 839, c. 525.]When it comes to economic predictions, perhaps the Government should begin to take lessons from someone like Gipsy Rose Lee.
The fact is that the balance of payments deficit with the Common Market is running at an annual rate of about £1,000 million. Perhaps the Government will blame the weather. Certainly our balance of payments is disastrous, and this order offers no hope whatever of improving it. We have now reached the situation referred to in the Labour Government's White Paper Command 4289 of February 1970 entitled "Britain and the European Communities. An Economic Assessment." These really are words of wisdom. The White Paper said:we must recognise that if the total burden on our balance of payments as a result of membership became excessive we might find that we were unable to pursue economic policies which enabled the full benefits of membership to be realised.Are not those words as true today as they were when they were written? Are they not more true? We on the Labour benches recognise that we have obligations in the Treaty of Accession. We have two points to make on this issue.
First, the Common Market itself has changed very little in its attitude on important topics such as reverse preferences, on getting a generous scheme of preferences at least as good as our own—the improved one is not that—and also on getting the agreement with the Asian Commonwealth countries which is satisfactory to those countries. There has been no improvement in any of these directions.
Secondly, everyone would agree that circumstances have changed radically 1080 since the 1971 negotiations. The balance of payments is worse than expected. The first year of membership has been economically disastrous. We are facing an economic crisis involving a fundamental change in economic strategy, and even if it is desirable—which we do not accept—is this the time to kick our traditional trading partners in the teeth?
The call is for sacrifices, so why cannot the Government make a temporary sacrifice of their own Common Market trade policies, which have been so unsuccessful ? We do not expect the Government to renegotiate the Treaty of Accession. We do not ask the Prime Minister to abandon his obsessive delusion that the Common Market can help resolve our economic problems, although he must be one of the increasingly small minority in the country who believe that. We are asking the Government to seek immediate approval from the Common Market to postpone the operation of these duties. Who can doubt that, in similar circumstances, France would have done so? One does not want to be too unkind, but it might be said that France would have acted first and asked permission afterwards.
We are trying to help the Government. They can make use not only of Articles 108 and 109 of the Treaty of Rome but also of Article 135 of the Treaty of Accession. Surely these articles were designed for the very economic circumstances we are facing today, a serious balance of payments crisis.
We were assured during the negotiations and the debates on entry that the Common Market would be sympathetic to any difficulties facing this country as a result of entry. Surely now is the time to ask the other members. In order to help the Government convince the Common Market of the seriousness of our economic situation, and as a first step, as my right hon. Friend said, towards regaining sanity in our economic policy, we ask the House to support the motion.
§ 9.43 p.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)
My first and pleasant task is to congratulate the hon. Member for Wal-thamstow, West (Mr. Deakins) on his first appearance at the Dispatch Box and his maiden speech there. It was delivered in 1081 a forthright and agreeable style, and I hope that we shall hear him many more times from that position. What was less agreeable was the content of what he said.
Although I agree that this has been a lively debate, I think that it has been an unbalanced one. Quite apart from the fact that we would have liked, perhaps, to hear from the Liberals, we would have liked to hear, perhaps, from the right hon. Member for Manchester, Cheetham (Mr. Harold Lever), the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and the hon. Member for Stockton-on-Tees (Mr. William Rodgers)—to name but a few—who take a very different view of the Common Market from that put tonight by those right hon. and hon. Members opposite who have spoken, whose speeches have covered very familiar arguments that we have heard over many years from those who, quite sincerely, oppose the Common Market.
The hon. Member for Walthamstow, West raised the question of tobacco. Although the common customs tariff duty here is protective, the duty on imports into the United Kingdom is a revenue duty which includes a small protective element. The power to vary it is in the Finance Act. A separate order has been made dealing with this, and it was laid on 28th November. On that part of the duty which is protected—that is to say, not revenue—the generalised scheme of preferences will operate. Indian tobacco will not pay the full duty in the United Kingdom. It will be not 10.3 per cent. but about 6 per cent.
The United Kingdom has consistently opposed any obligation on associated developing countries to give reverse preferences. That will continue to be our view. The GSP scheme generally will come into force on 1st January.
I make one observation on the hon. Gentleman's general point about the Commonwealth. He was concerned about the disappearance of our trade with the Commonwealth, or the way in which it might decline. This is nothing new. It has been going on for a long time—long before the Common Market. British companies have been tending to send more of their exports to non-Commonwealth markets for many years.
§ The question of food prices has obviously dominated much of the debate. A number of specific questions were put to me, many of them by the right hon. Member for Battersea, North (Mr. Jay). I cannot possibly go through a long list of foodstuffs, but I will deal with some of his questions. No duty is being imposed on bananas from the Caribbean. The duty on fish varies. Certain fish will go up in price and some will come down, but fish was not duty-free under the EFTA arrangements. Tea will continue to enter duty-free from the Asian producers.
§ A number of hon. Members, particularly my hon. Friend the Member for Banbury (Mr. Marten) were concerned about the increase in lamb prices. It is no use baulking at the fact that there will be an increased percentage on lamb. I was not concerned with the matter, but I know that all the anxieties that my hon. Friend has expressed were brought fully into the discussions. If my hon. Friend wants to pursue the matter further, he will no doubt raise it with my right hon. Friend the Minister of Agriculture, Fisheries and Food.
§ Mr. Molloy
Does the Minister think that it is fair to the House not to answer points because they are another Minister's responsibility? Is not he speaking for the Government in this debate?
§ Mr. Grant
Yes, Sir. I was merely saying that I did not have time to give a detailed answer on the exact course of the negotiations on lamb. The House will appreciate the position.
We must look at the net effect of the 1st January changes on food prices as a whole and get the whole matter in perspective, which is what the hon. Member for Acton (Mr. Spearing) wanted me to do. The changes in food prices are not likely to be more than ¼ per cent. to½ per cent. That represents about one-tenth of 1 per cent. on the cost of living as a whole. [Interruption.] If the hon. Gentleman, who does not seem to suffer from lack of food himself, wished to challenge those figures, no doubt he would have caught the eye of the Chair.
§ Mr. Spearing
The Minister has repeated the figure of ¼ per cent. to ½ per cent. I asked him to give the equivalent 1083 in millions of pounds. Will he now do so?
§ Mr. Grant
I cannot do that at this stage, but I shall gladly do so. That is the best estimate we can give.
The matter must be seen in the perspective of all the other changes. The net effect of duty changes is more likely to be downwards than upwards overall, as my hon. and learned Friend the Minister for Trade and Consumer Affairs said It is misleading to suppose that all duties are going up, as hon. Members sometimes suggest. Duties on food imports from the Six are going down. Duties on food imports from Ireland and Denmark are staying where they are. Some of our external duties are going down.
I regret that my hon. Friend the Member for Banbury has to take the view he has taken. He has been consistent in opposing the Market, but I thought that he might have been prepared to accept that the order was a natural and logical consequence of the decision to enter.
§ Mr. Marten
May I make one suggestion, which would get the Government out of their dilemma, as I may vote against them, and probably will? If the orders were withdrawn and were then introduced in two batches—one imposing duties, against which we could all vote, and the other reducing them, which we could allow to go through on the nod—the Government would be out of their difficulties.
§ Mr. Grant
I cannot at this stage succumb to my hon. Friend's blandishments.
The right hon. Member for Battersea, North referred to the complexity of the order, and it is admittedly a formidable-looking document. The complication and the size arise from there being a transitional period. Industry will soon become familiar with the new arrangements. It has adapted remarkably well to other changes this year, as in the past it adapted to the EFTA arrangements, which were by no means simple. My Department and the Customs and Excise will give any help we can in adapting to the new procedure, and we shall make available as much detailed information as we can.
1084 There is one respect in which there is a great need for improvement—that is, in the simplification of trade documents. I accept the complaints that come from United Kingdom traders—particularly small traders, with whom I am concerned—about the number and complexity of documents in intra-Community trade. I assure the House that we are actively engaged, through the Simplification of International Trade Procedure Board, in promoting further simplification, and progress has been made. For example, one single certificate is being instituted for the eight or nine forms originally required, and urgent discussions are taking place with the Commission and our European partners to make progress in this respect.
The right hon. Gentleman mentioned beef and pointed out that the No. 8 Order referred to present rates, which were introduced on 30th April last. The reason for repeating the duties and many others in which there is no change is simply to have a complete consolidated order, but that does not affect the issue.
§ Mr. Grant
No, I do not. What I say is that the next change in beef and veal duties is due at the beginning of the next beef marketing year, probably 1st April, but this order does not affect that.
I turn now to some of the arguments on the balance of payments advanced by some hon. Members and particularly by the right hon. Member for Stepney (Mr. Shore). It was argued by him, as it was argued by the hon. Member for Ebbw Vale (Mr. Michael Foot), elsewhere, that the current world economic and energy problems demanded that we should retain a greater degree of tariff autonomy over import duties. That is purely a short-term argument. The short-term effect of these changes is far less significant than the sort of measures for demand management that my right hon. Friend the Chancellor of the Exchequer announced today.
In the long term, the abolition of internal duties is bound to improve trade within the Community, and this must be the more important judgment in the long 1085 run. What would be wholly disastrous would be a return to the sort of narrow isolationism and protectionism that characterised the period between the wars. Let us not forget that tariff autonomy is forfeited not only by Britain, but by eight other countries trading within the Community.
I remind the House of something said some time ago and of which we should be aware:… the long-term potential for Europe, and therefore for Britain, of the creation of a single market of approaching 300 million people, with all the scope and incentive which this will provide for British industry …That was the right hon. Gentleman the Leader of the Opposition in his White Paper. That was the fundamental argument advanced by the Labour Government in support of their application for membership in 1967. Notwithstanding the short-term difficulties, it is as true today as it was in 1967.
The changes in duty provided by the order are fundamental to the enlarged EEC and flow inevitably from our decision to enter the EEC, the whole concept of which was the abolition of internal tariffs and the creation of a common external tariff. The terms of entry which were negotiated embody transitional arrangements, of which this order is another logical step. Those terms of entry were accepted by the House with a majority of 112. They would have been acceptable to the previous Labour Government, if they had the honesty to say so.
§ If the order were annulled it would be a rejection of the whole concept of the Common Market as a customs union of the Nine. It would be inconsistent with the first step which flowed from the decision to enter, namely, the cut of 20 per cent. on industrial duty on 1st April 1973, which has gone through the House. Industry has made its long-term plans on the basis that duties would be totally abolished within the Nine by 1977 by stages, of which this order is one.
§ The order also maintains duty-free trade with Ireland and Denmark, and very largely with the EFTA countries. Rejection of the order would throw into total disarray the whole of industry and our principal trading partners. The motion is at best a thinly-veiled attempt to renegotiate the terms of entry, which the wiser members of the Opposition know is utterly impracticable, and at worst an attempt by half the Opposition to take us out of Europe, which is absurd.
§ The order is exactly in line with what would have been acceptable to the previous Labour Government. The Opposition know that they cannot renegotiate the terms and that they would not renegotiate the terms. I confidently advise the House to reject the motion for the humbug that it is.
§ Question put:—
§ The House divided: Ayes 278, Noes 294.1091
|Division No. 24.]||AYES||[9.57 p.m.|
|Abse, Leo||Bradley, Tom||Davidson, Arthur|
|Albu, Austen||Brown, Robert C.(N'c'tle-u-Tyne, W.)||Davies, Denzil (Llanelly)|
|Allaun, Frank (Salford, E.)||Brown, Hugh D. (G'gow, Provan)||Davies, G. Elfed (Rhondda, E.)|
|Archer, Peter (Rowley Regis)||Brown, Ronald (Shoreditch & F'bury)||Davies, lfor (Gower)|
|Armstrong, Ernest||Buchan, Norman||Davis, Clinton (Hackney, C.)|
|Ashley, Jack||Butler, Mrs. Joyce (Wood Green)||Davis, Terry (Bromsgrove)|
|Ashton, Joe||Callaghan, Rt. Hn. James||Deakins, Eric|
|Atkinson, Norman||Campbell, I. (Dunbartonshire, W.)||de Freitas, Rt. Hn. Sir Geoffrey|
|Bagier, Gordon A. T.||Cant, R. B.||Delargy, Hugh|
|Barnes, Michael||Carmichael, Neil||Dell, Rt. Hn. Edmund|
|Barnett, Guy (Greenwich)||Carter, Ray (Birmingh'm, Northfield)||Dempsey, James|
|Barnett, Joel (Heywood and Royton)||Carter-Jones, Lewis (Eccles)||Doig, Peter|
|Baxter, William||Castle, Rt. Hn. Barbara||Douglas, Dick (Stirlingshire, E.)|
|Beaney, Alan||Clark, David (Colne Valley)||Douglas-Mann, Bruce|
|Bell, Ronald||Cocks, Michael (Bristol, S.)||Driberg, Tom|
|Benn, Rt. Hn. Anthony Wedgwood||Coleman, Donald||Duffy, A. E. P.|
|Bennett, James (Glasgow, Bridgeton)||Concannon, J. D.||Dunn, James A.|
|Bidwell, Sydney||Conlan, Bernard||Dunnett, Jack|
|Biffen, John||Corbet, Mrs. Freda||Eadie, Alex|
|Bishop, E. S.||Cox, Thomas (Wandsworth, C.)||Edeman, Maurice|
|Blenkinsop, Arthur||Crawshaw, Richard||Edwards, Robert (Bilston)|
|Boardman, H. (Leigh)||Cronin, John||Edwards, William (Merioneth)|
|Body, Richard||Crosland, Rt. Hn. Anthony||Ellis, Tom|
|Booth, Albert||Cunningham, G. (Islington, S. W.)||English, Michael|
|Boothroyd, Miss Betty||Cunningham, Dr. J. A. (Whitehaven)||Evans, Fred|
|Bottomley, Rt. Hn. Arthur||Dalyell, Tam||Ewing, Harry|
|Boyden, James (Bishop Auckland)||Darling, Rt. Hn. George||Faulds, Andrew|
|Fernyhough, Rt. Hn. E.||Lestor, Miss Joan||Probert, Arthur|
|Fisher, Mrs. Doris (B'ham, Ladywood)||Lever, Rt. Hn. Harold||Radice, Giles|
|Fitch, Alan (Wigan)||Lewis, Arthur (W. Ham, N.)||Reed, D. (Sedgefield)|
|Fletcher, Ted (Darlington)||Lewis, Ron (Carlisle)||Rees, Merlyn (Leeds, S.)|
|Foot, Michael||Lipton, Marcus||Rhodes, Geoffrey|
|Ford, Ben||Lomas, Kenneth||Richard, Ivor|
|Forrester, John||Loughlin, Charles||Roberts, Albert (Normanton)|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||Lyon, Alexander W. (York)||Roberts, Rt. Hn. Goronwy (Caernarvon)|
|Galpern, Sir Myer||Lyons, Edward (Bradford, E.)||Robertson, John (Paisley)|
|Garrett, W. E.||McBride, Neil||Roderick, Caerwyn E. (Brc'n&R'dnor)|
|Gilbert, Dr. John||McCartney, Hugh||Rodgers, William (Stockton-on-Tees)|
|Ginsburg, David (Dewsbury)||McElhone, Frank||Roper, John|
|Golding, John||McGuire, Michael||Rose, Paul B.|
|Gordon Walker, Rt. Hn. P. C.||Machin, George||Ross, Rt. Hn. William (Kilmarnock)|
|Gourlay, Harry||Mackenzie, Gregor||Rowlands, Ted|
|Grant, George (Morpeth)||Mackie, John||Sandelson, Neville|
|Grant, John D. (Islington, E.)||Mackintosh, John P.||Sheldon, Robert (Ashton-under-Lyne)|
|Griffiths, Eddie (Brightside)||Maclennan, Robert||Shore, Rt. Hn. Peter (Stepney)|
|Hamilton, James (Bothwell)||McMaster, Stanley||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Hamilton, William (Fife, W.)||McMillan, Tom (Glasgow, C.)||Short, Mrs. Renée (W'hampton, N.E.)|
|Hamling, William||McNamara, J. Kevin||Silkin, Rt. Hn. John (Deptford)|
|Hannan, William (G'gow, Maryhill)||Mallalieu, J. P. W. (Huddersfield, E.)||Silkin, Hn. S. C. (Dulwich)|
|Hardy, Peter||Marks, Kenneth||Sillars, James|
|Harrison, Walter (Wakefield)||Marquand, David||Silverman, Julius|
|Hart, Rt. Hn. Judith||Marsden, F.||Skinner, Dennis|
|Hattersley, Roy||Marshall, Dr. Edmund||Small, William|
|Hatton, F.||Marten, Neil||Smith, John (Lanarkshire, N.)|
|Healey, Rt. Hn. Denis||Mason, Rt. Hn. Roy||Spearing, Nigel|
|Heffer, Eric S.||Mayhew, Christopher||Stallard, A. W.|
|Hilton, W. S.||Meacher, Michael||Stewart, Rt. Hn. Michael (Fulham)|
|Hooson, Emlyn||Mellish, Rt. Hn. Robert||Stoddart, David (Swindon)|
|Horam, John||Mikardo, Ian||Stonehouse, Rt. Hn. John|
|Houghton, Rt. Hn. Douglas||Millan, Bruce||Stott, Roger|
|Howell, Denis (Small Heath)||Miller, Dr. M. S.||Strang, Gavin|
|Huckfield, Leslie||Milne, Edward||Strauss, Rt. Hn. G. R.|
|Hughes, Rt. Hn. Cledwyn (Anglesey)||Mitchell, R. C. (S'hampton, Itchen)||Summerskill, Hn. Dr. Shirley|
|Hughes, Mark (Durham)||Moate, Roger||Swain, Thomas|
|Hughes, Robert (Aberdeen, N.)||Molloy, William||Thomas, Rt. Hn. George (Cardiff, W.)|
|Hughes, Roy (Newport)||Molyneaux, James||Tinn, James|
|Hunter, Adam||Morgan, Elystan (Cardiganshire)||Torney, Tom|
|Hutchison, Michael Clark||Morris, Alfred (Wythenshawe)||Tuck, Raphael|
|Irvine, Rt. Hn. Sir Arthur (Edge Hill)||Morris, Rt. Hn. John (Aberavon)||Turton, Rt. Hn. Sir Robin|
|Janner, Greville||Moyle, Roland||Varley, Eric G.|
|Jay, Rt. Hn. Douglas||Mulley, Rt. Hn. Frederick||Wainwright, Edwin|
|Jeger, Mrs. Lena||Murray, Ronald King||Waiden, Brian (B'm'ham, All Saints)|
|Jenkins, Hugh (Putney)||Oakes, Gordon||Walker, Harold (Doncaster)|
|Jenkins, Rt. Hn. Roy (Stechford)||Ogden, Eric||Wallace, George|
|John, Brynmor||O'Halloran, Michael||Watkins, David|
|Johnson, Carol (Lewisham, S.)||O'Malley, Brian||Weltzman, David|
|Johnson, James (K'ston-on-Hull, W.)||Oram, Bert||Wellbeloved, James|
|Johnson, Waller (Derby, S.)||Orbach, Maurice||Wells, William (Walsall, N.)|
|Jones, Barry (Flint, E.)||Orme, Stanley||White, James (Glasgow, Pollok)|
|Jones, Dan (Burnley)||Oswald, Thomas||Whitehead, Phillip|
|Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Owen, Dr. David (Plymouth, Sutton)||Whitlock, William|
|Jones, Gwynoro (Carmarthen)||Padley, Walter||Willey, Rt. Hn. Frederick|
|Jones, T. Alec (Rhondda, W.)||Paget, R. T.||Williams, Alan (Swansea, W.)|
|Judd, Frank||Palmer, Arthur||Williams, Mrs. Shirley (Hitchin)|
|Kaufman, Gerald||Pannell, Rt. Hn. Charles||Williams, W. T. (Warrington)|
|Kelly, Richard||Parker, John (Dagenham)||Wilson, Alexander (Hamilton)|
|Kerr, Russell||Pavltt, Laurie||Wilson, Rt. Hn. Harold (Huyton)|
|Kinnock, Neil||Peart, Rt. Hn. Fred||Wilson, William (Coventry, S.)|
|Lambie, David||Pendry, Tom||Woof, Robert|
|Lamborn, Harry||Perry, Ernest G.|
|Lamond, James||Powell, Rt. Hn. J. Enoch||TELLERS FOR THE AYES:|
|Latham, Arthur||Prentice, Rt. Hn. Reg.||Mr. J. D. Dormand and|
|Lawson, George||Price, William (Rugby)||Joseph Harper.|
|Lee, Rt. Hn. Frederick|
|Adley, Robert||Barber, Rt. Hn. Anthony||Bowden, Andrew|
|Alison, Michael (Barkston Ash)||Batsford, Brian||Braine, Sir Bernard|
|Allason, James (Hemel Hempstead)||Beamish, Col. Sir Tufton||Bray, Ronald|
|Amery, Rt. Hn. Julian||Beith, A. J.||Brewis, John|
|Archer, Jeffrey (Louth)||Bennett, Dr. Reginald (Gosport)||Brinton, Sir Tatton|
|Astor, John||Benyon, W.||Brocklebank-Fowler, Christopher|
|Atkins, Humphrey||Berry, Hn. Anthony||Brown, Sir Edward (Bath)|
|Austick, David||Biggs-Davison, John||Bruce-Gardyne, J.|
|Awdry, Daniel||Blaker, Peter||Bryan, Sir Paul|
|Baker, Kenneth (St. Marylebone)||Boardman, Tom (Leicester, S. W.)||Buchanan-Smith, Alick (Angus, N&M)|
|Baker, W. H. K. (Banff)||Boscawen, Hn. Robert||Buck, Antony|
|Balniel, Rt. Hn. Lord||Bossom, Sir Clive||Bullus, Sir Eric|
|Burden, F. A.||Heath, Rt. Hn. Edward||Peel, Sir John|
|Butler, Adam (Bosworth)||Heseltine, Michael||Percival, lan|
|Campbell, Rt. Hn. G. (Moray & Nairn)||Hicks, Robert||Peyton, Rt. Hn. John|
|Carlisle, Mark||Higgins, Terence L.||Pike, Miss Mervyn|
|Carr, Rt. Hn. Robert||Hiley, Joseph||Pink, R. Bonner|
|Channon, Paul||Hill, John E. B. (Norfolk, S.)||Pounder, Rafton|
|Chapman, Sydney||Hill, S. James A. (Southampton, Test)||Price, David (Eastleigh)|
|Chataway, Rt. Hn. Christopher||Holland, Philip||Prior, Rt. Hn. J. M. L.|
|Chichester-Clark, R.||Holt, Miss Mary||Proudfoot, Wilfred|
|Churchill, W. S.||Hornby, Richard||Quennell, Miss J. M.|
|Clark, William (Surrey, E.)||Hornsby-Smith. Rt. Hn. Dame Patricia||Raison, Timothy|
|Clarke, Kenneth (Rushcliffe)||Howe, Rt. Hn. Sir Geoffrey (Reigate)||Ramsden, Rt. Hn. James|
|Cockeram Eric||Howell, David (Guildford)||Rawlinson, Rt. Hn. Sir Peter|
|Cooke, Robert||Howell, Ralph (Norfolk, N.)||Redmond, Robert|
|Coombs, Derek||Hunt, John||Reed, Laurance (Bolton, E.)|
|Cooper, A. E.||Iremonger, T. L.||Rees, Peter (Dover)|
|Cordle, John||Irvine, Bryant Godman (Rye)|
|Corfileld, Rt. Hn. Sir Frederick||James, David||Rees-Davies, W. R.|
|Cormack, Patrick||Jenkin, Rt. Hn. Patrick (Woodford)||Renton, Rt. Hn. Sir David|
|Costain, A. P.||Johnson Smith G. (E. Grinstead)||Rhys Williams, Sir Brandon|
|Critchley, Julian||Jones, Arthur (Northants, S.)||Ridley, Hn. Nicholas|
|Crouch, David||Jopling, Michael||Ridsdale, Julian|
|Crowder, F. P.||Joseph, Rt. Hn. Sir Keith||Rippon, Rt. Hn. Geoffrey|
|Davies, Rt. Hn. John (Knutsford)||Kaberry, Sir Donald||Roberts, Wyn (Conway)|
|d'Avigdor-Goldsmid, Sir Henry||Kellett-Bowman, Mrs. Elaine||Rodgers, Sir John (Sevenoaks)|
|d'Avigdor-Goldsmid, Maj.-Gen. Jack||Kershaw, Anthony||Rossi, Hugh (Hornsey)|
|Dean, Paul||Kimball, Marcus||Rost, Peter|
|Deedes, Rt. Hn. W. F.||King, Evelyn (Dorset, S.)||Royle, Anthony|
|Digby, Simon Wingfield||King, Tom (Bridgwater)||Russell, Sir Ronald|
|Dixon, Piers||Kinsey, J. R.||St. John-Stevas, Norman|
|Dodds-Parker, Sir Douglas||Kitson, Timothy||Sainsbury, Timothy|
|Drayson, Burnaby||Knight, Mrs. Jill||Sandys, Rt. Hn. D.|
|du Cann, Rt. Hn. Edward||Knox, David||Scott, Nicholas|
|Dykes, Hugh||Lamont, Norman||Scott-Hopkins, James|
|Edwards, Nicholas (Pembroke)||Lane, David||Shaw, Michael (Sc'b'gh & Whitby)|
|Elliott, Capt. Walter (Charshalton)||Langford-Holt, Sir John||Shelton, William (Clapham)|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Le Marchant, Spencer||Shersby, Michael|
|Emery, Peter||Lewis, Kenneth (Rutland)||Simeons, Charles|
|Eyre, Reginald||Lloyd, lan (P'tsm'th, Langstone)||Sinclair, Sir George|
|Fenner, Mrs. Peggy||Longden, Sir Gilbert||Skeet, T. H. H.|
|Fidler, Michael||Loveridge, John||Smith, Cyril (Rochdale)|
|Finsberg, Geoffrey (Hampstead)||Luce, R. N.||Smith, Dudley (W'wick & L'mington)|
|Fisher, Nigel (Surbiton)||McAdden, Sir Stephen||Soref, Harold|
|Fletcher, Alexander (Edinburgh, N.)||MacArthur, Ian||Speed, Keith|
|Fletcher-Cooke, Charles||McCrindle, R. A.||Spence, John|
|Fookes, Miss Janet||McLaren, Martin||Sproat, lain|
|Fortescue, Tim||Maclean, Sir Fitzroy||Stainton, Keith|
|Foster, Sir John||Macmillan, Rt. Hn. Maurice (Farnham)||Stanbrook, Ivor|
|Fowler, Norman||McNair-Wilson, Michael||Steel, David|
|Fox, Marcus||McNair-Wilson, Patrick (New Forest)||Stewart-Smith, Geoffrey (Belper)|
|Freud, Clement||Madel, David||Stodart, Anthony (Edinburgh, W.)|
|Fry. Peter||Maginnis, John E.||Stokes, John|
|Galbraith, Hn. T. G. D.||Marples, Rt. Hn. Ernest||Stuttaford, Dr. Tom|
|Gardner, Edward||Mather, Carol||Sutcliffe, John|
|Gibson-Watt, David||Maude, Angus||Tapsell, Peter|
|Gilmour, Ian (Norfolk, C.)||Maudling, Rt. Hn. Reginald||Taylor, Sir Charles (Eastbourne)|
|Gilmour, Sir John (Fife, E.)||Mawby, Ray||Taylor, Edward M. (G'gow, Cathcart)|
|Glyn, Dr. Alan||Maxwell-Hyslop, R. J.||Taylor, Robert (Croydon, N. W.)|
|Godber, Rt. Hn. J. B.||Meyer, Sir Anthony||Tebbit, Norman|
|Goodhart, Philip||Mills, Peter (Torrington)||Temple, John M.|
|Goodhew, Victor||Miscampbell, Norman||Thatcher, Rt. Hn. Mrs. Margaret|
|Gorst, John||Mitchell, Lt. -Col. C. (Aberdeenshire, W)||Thomas, John Stradling (Monmouth)|
|Gower, Raymond||Mitchell, David (Basingstoke)||Thomas, Rt. Hn. Peter (Hendon, S.)|
|Grant, Anthony (Harrow, C.)||Money, Ernie||Thompson, Sir Richard (Croydon, S.)|
|Gray, Hamish||Tilney, Sir John|
|Green, Alan||Monks, Mrs. Connie||Tope, Graham|
|Grieve, Percy||Monro, Hector||Trafford, Dr. Anthony|
|Griffiths, Eldon (Bury St. Edmunds)||Montgomery, Fergus||Trew, Peter|
|Grimond, Rt. Hn. J.||More, Jasper||Tugendhat, Christopher|
|Grylls, Michael||Morgan-Giles, Rear-Adm.|
|Gumner, J. Selwyn||Morrison, Charles||van Straubenzee, W. R.|
|Gurden, Harold||Mudd, David||Vaughan, Dr. Gerard|
|Hall, Miss Joan (Keighley)||Neave, Airey||Waddington, David|
|Hall Sir John (Wycombe)||Nicholls, Sir Harmar||Walder, David (Clitheroe)|
|Hall-Davis, A. G. F.||Noble, Rt. Hn. Michael||Walker, Rt. Hn. Peter (Worcester)|
|Hamilton, Michael (Salisbury)||Normanton, Tom||Walker-Smith, Rt. Hn. Sir Derek|
|Hannam, John (Exeter)||Nott, John||Walters, Dennis|
|Harrison, Brian (Maldon)||Onslow, Cranley||Ward, Dame Irene|
|Harrison, Col. Sir Harwood (Eye)||Oppenheim, Mrs. Sally||Weatherill, Bernard|
|Harvie Anderson, Miss||Osborn, John||Wells, John (Maidstone)|
|Haselhurst, Alan||Owen, Idris (Stockport, N.)||White, Roger (Gravesend)|
|Hastings, Stephen||Page, Rt. Hn. Graham (Crosby)||Whitelaw, Rt. Hn. William|
|Havers, Sir Michael||Pardoe, John||Wiggin, Jerry|
|Hayhoe, Barney||Parkinson, Cecil||Wilkinson, John|
|Winterton, Nicholas||Woodnutt, Mark||TELLERS FOR THE NOES:|
|Wolrige-Gordon, Patrick||Worsley, Marcus||Mr. Walter Clegg and|
|Wood, Rt. Hn. Richard||Wylle, Rt. Hn. N. R.||Mr. Paul Hawkins.|
|Woodhouse, Hn. Christopher||Younger, Hn. George|
§ Question accordingly negatived.