HC Deb 18 March 1975 vol 888 cc1456-80
The Prime Minister (Mr. Harold Wilson)

Mr. Speaker, with permission, I should like to make a statement on the European Community.

I regret that this will inevitably be somewhat lengthy, but this is one of the most important parliamentary occasions in our history, and I feel a duty to state the Government's position here in the House, rather than make a short, even perfunctory, statement here and a lengthy statement outside the House where it is not subject to parliamentary questioning.

Her Majesty's Government have decided to recommend to the British people to vote for staying in the Community. [Interruption.] Although this statement is lengthy, I hope that I can take time off for injuries.

Last Wednesday, after Dublin, I told Parliament that the renegotiations, begun last April, had now gone as far as they could usefully go and that, while some of our objectives—if Britain remained in the Community—could be pursued in the continuing meetings of the Council of Ministers, we had now reached the point where Government, Parliament, and then the country, must take the decision.

The House will be familiar with the renegotiation objectives we set out in the manifesto for the February 1974 General Election, and confirmed in October.

While the judgment of hon. Members, and of the electorate, may, in taking their decision, go far wider than the terms achieved in the negotiations, I feel it is right to give the House my assessment of what has been achieved.


The manifesto called for: Major changes in the common agricultural policy so that it ceases to be a threat to world trade in food products, and so that low cost producers outside Europe can continue to have access to the British food market. My right hon. Friend the Minister of Agriculture gave precision to these objectives in his statement to the Council of Ministers on 18th June, on which he reported to the House on 19th June. He asked for:

  1. 1. The establishment of firm criteria or pricing policy, taking account of 1457 the needs of efficient producers and the demand/supply situation.
  2. 2. Greater flexibility, taking account of the need for appropriate measures to deal with special circumstances in different parts of the Community.
  3. 3. Measures to discourage surpluses and to give priority to Community consumers in the disposal of any surpluses which arise.
  4. 4. Improvement in the marketing régimes for some major commodities, particularly beef, with a view to avoiding surpluses.
  5. 5. The improvement of financial control.
  6. 6. Better access for certain commodities from outside the Community, with particular regard for the interests of Commonwealth producers and of the consumer.
Now as to the outcome.

On the supply of food at fair prices, in the three CAP price settlements since the Government took office the Minister of Agriculture has succeeded in keeping price increases below cost increases, and thus in real terms reinforcing the downward trend in CAP prices. This would benefit consumers and taxpayers and also is designed to reduce the risk of surpluses.

Increasingly, price proposals are being related to the costs of efficient producers and the supply/demand situation, and this approach is reaffirmed in the Commission's report on the CAP stock-taking for which we and Germany asked.

On the greater flexibility for special circumstances and improved systems of market regulation, especially beef, the Minister has secured changes for beef under which member States are no longer obliged to maintain high prices for producers by buying beef into store and denying it to consumers. Instead, they can let it go to consumers at reasonable prices and make up returns to producers by deficiency payments partly financed by the Community.

In addition, special encouragement has been given for sugar production in the United Kingdom. More generally, the monetary arrangements have been used to differentiate the percentage price increase between member States. There has been more flexibility in the use of national aids.

On the requirements of measures to discourage surpluses and to pay more regard to consumers, the downward pressure on CAP prices is itself a safeguard against surplus production—together with our proposals, now being pursued, for the reduction of support buying prices for milk products and cereals when surpluses start to arise. Then there is the recent practice, which I understand is to be continued, that any surpluses which do develop are run down by cheap supplies to Community consumers rather than being unloaded on world markets. We have had this in the beef subsidy for pensioners and in the increased butter subsidy. British consumers again benefit from the monetary import subsidies paid to countries which have devalued and from special measures to keep Community prices below world prices, particularly the sugar import subsidy which is financed by the Community.

On the objective of improved financial control, some progress has been made—better estimates of costs and budgetary implications of new proposals, tighter monitoring of expenditure and the introduction of precautions against fraud.

On access for third-country foodstuffs, in 1971 we condemned from the Opposition benches the failure to provide security for Commonwealth Sugar Agreement producers. We constantly criticised the lack of arrangements for Commonwealth Sugar Agreement supplies after the end of 1974, which in fact turned out to be a time of world sugar famine—hence the crisis and the high prices we faced. But we have now got assured access for up to 1.4 million tons of sugar from developing countries, for which we pressed from 1971 onwards, so this objective has been achieved.

During this period of shortage, British refiners and manufacturers have purchased 170,000 tons of sugar to maintain continuity of supplies with the aid of Community subsidies of £36 million.

On access for New Zealand dairy produce, in the autumn of 1974 we secured an increase of 18 per cent. in the prices paid to New Zealand to ensure continued supplies, and at Dublin we got agreement on the broad lines of the continuing arrangements for access of New Zealand dairy produce after 1977.

No commitments had been made in 1971, but so far as butter is concerned the Commission has been instructed to prepare in the next three or four months a draft based on the maintenance of butter imports from New Zealand to Britain at around the level of 1974–75 deliveries—in other words, none of the degressivity which had been understood was to be brought about—together with price proposals to which the New Zealand Government attach the greatest importance.

On cheese, the Protocol to the Treaty of Entry ruled out any more access for New Zealand cheese of the kind provided for in 1973–77. But last week's statement has left the matter open, and we have given notice that we shall pursue it in the Protocol 18 review. We shall press this urgently indeed.

Improved access for other foodstuffs has been secured as a result of GATT negotiations, the trade sections of the Lomé Convention, the Mediterranean agreement and the Community's 1975 Generalised Scheme of Preferences which has now been agreed; improved access, too, for tropical oils, Canadian cheddar, soluble coffee and lard, though no achievement yet on access for certain other foods such as canned fruit and hard wheat. We have requested levy-free quotas for hard wheat and flour, and put on record that we shall at an early date seek elimination or reduction of the tariff on New Zealand lamb.


Community Budget

The manifesto commitment was: New and fairer methods of financing the Community budget. Neither the taxes that form the so-called 'own resources' of the Communities, nor the purposes, mainly agricultural support, on which the funds are mainly to he spent, are acceptable to us. We would be ready to contribute to Community finances only such sums as were fair in relation to what is paid and what is received by other Member countries. It rapidly became clear that we could best secure our objectives not by seeking to overturn the system of financing the budget from "own resources" but by correcting its unfair impact by a mechanism which would provide a refund to us.

I reported to the House a week ago, and set out the corrective mechanism proposals, which as I said were an improvement on the Commission's proposals, and which satisfactorily met what we then proposed, involving a refund of up to £125 millions a year.


Economic and Monetary Union

The manifesto commitment is as follows: we would reject any kind of international agreement which compelled us to accept increased unemployment for the sake of maintaining a fixed parity … We believe that the monetary problems of the European countries can be resolved only in a worldwide framework. Since that commitment was made there has been a major change in the attitude of other European Governments to the practicability of achieving EMU by 1980. As a long-term objective it was restated in the Paris communiqué, but for all practical purposes it has been tacitly abandoned. For example, the second stage, due to start on 1st January 1974, 15 months ago, has never been adopted and practical work has been virtually at a standstill for a long time.

There is no prospect of our coming under pressure to agree to an arrangement, whether in relation to parity commitments or otherwise, threatening the level of employment in Britain. As for EMU remaining as a long-term Community objective, its realisation in the foreseeable future, as I hinted at Question Time, is as likely as the ideal of general and complete disarmament which we all support and assert.


Our election manifesto of February 1974 stated our objective as: The retention by Parliament of those powers over the British economy needed to pursue effective regional, industrial and fiscal policies. Regional Policy

Since the turn of the year, and in the context of our renegotiations, the Commission has had an intensive discussion with us and other member Governments and has now formulated the principles under which it proposes to implement its rôle in the co-ordination of regional aids.

The Commission's hierarchy of assisted areas conforms to ours. No forms of national aids are ruled out in principle, and there is no intereference with our existing regional aids. There is a particular problem relating to assistance given by the Highlands and Islands Development Board, for which a derogation is being obtained. In discussing the way in which regional aids might be changed to meet new circumstances, the Commission has furthermore acknowledged that national Governments are the best judges of what is required in their own country and that the Commission will be prepared to consider changes in national aid systems compatible with the Common Market, when they are justified by problems of employment, unemployment, migration and by other valid requirements of regional development policy which constitute essential national problems. The Commission has further accepted that urgent action by Governments may be necessary and that treaty procedures will not hold this up.

Industrial Policy

We have not met with any serious difficulties from the EEC in the conduct of industrial policy during the past year. We have reported aids given under Sections 7 and 8 of the Industry Act 1972. Article 222 of the Treaty of Rome specifically permits nationalisation; and Government participation in the equity of a firm does not in itself raise problems under the treaty. The Commission has accepted that in urgent cases we shall provide aid without first giving it an opportunity to comment. In such rescue cases a solution might be that when we prepare a plan to restore the firm concerned to viability we should discuss it with the Commission within the following six months. This would not be an onerous requirement.

The Commission has not yet commented on the Industry Bill. The proposals for the National Enterprise Board and for Planning Agreements have much in common with arrangements in other member States. They are in no way incompatible with the treaty, provided that the Government's powers are not exercised so as to damage the competitive position of undertakings in other member States—a principle which we accept, as we have in the case of regional policy.

I should add that, as regards State aids, we had just as stringent an injunction on us as members of EFTA, and non-Market EFTA countries which have agreements with the EEC have accepted obligations just like the EEC obligations without having any part in EEC decisions in these fields.

I believe that this meets our objective. Steel is more difficult, partly for inherent reasons, partly because of action taken by the previous Government when they repealed Section 15 of the Iron and Steel Act.

I am satisfied that potential problems over prices can be resolved by close contact between the Government and the Steel Board, and possible difficulties about mergers are also capable of a solution.

There is nothing in the Treaties of Rome or Paris or in practices or policies under the treaties which precludes us from extending nationalisation of the present private sector—even total nationalisation of the industry.

On the control of private investment there were, until the repeal of Section 15, powers under legislation passed by this House to prevent investment by non-British non-Community country steelmasters—and the much publicised mini-mill proposal at Newport could have been dealt with if Section 15 was still in force. It is not against the treaty in any way to use it.

My right hon. Friend the Foreign and Commonwealth Secretary gave notice at the Council of Ministers on 3rd March that it might be necessary to ask for treaty revision if there is no other way of solving this problem. If, as part of the control of the economy, the Government—any Government—have to hold back the level of new investment in the public steel sector, it is unacceptable that the private sector should be free to expand where it wants and by as much as it wants, thus adding to the inflationary pressure on resources, quite apart from the location and regional problems, for example, in areas where steel men have been made redundant by technological change.

Since it is well known that other member countries have met with those and similar problems and have found administrative means of dealing with them without asking for an amendment of the treaty, I told the other Heads of Government in Dublin that we would study the methods they have used, whether by environmental controls, planning controls, industrial development certificate controls, or other means.

Were this to fail, we could still have recourse to extending public ownership or to proposing treaty revision. Concerning this continuing objective, the reference in the manifesto objective to fiscal policies has not proved difficult. There are proposals for certain measures to harmonise the structure of some indirect taxes, but any which were objectionable to us would require our agreement. I will come to this again on VAT.


Capital movements

The manifesto commitment says: Equally we need an agreement on capital movements which protects our balance of payments and full employment policies. We have made use of the relevant Articles of the Treaty of Rome to revert to broadly the same exchange control régime as applied before entry. We can continue to take action under those Articles to protect our balance of payments.


The Commonwealth and developing countries

The manifesto said: The economic interests of the Commonwealth and the developing countries must be better safeguarded. This involves securing continued access to the British market and, more generally, the adoption by an enlarged Community of trade and aid policies designed to benefit not just 'associated overseas territories' in Africa, but developing countries throughout the world. I have referred to Commonwealth sugar and New Zealand dairy products

Another major achievement was the Lomé Convention. What was achieved —and a great tribute is due here to the work of my right hon. Friend the Minister for Overseas Development—was the transformation of a paternalistic arrangement with a restricted range of mainly ex-French and Belgian Colonies or Territories, in which they had to offer the Community reciprocal trade benefits, into a relationship based on co-operation with 46 countries in Africa, the Caribbean and Pacific—22 of them from the Commonwealth. The new convention governs access without requiring reciprocity, a completely new scheme for stabilisation for commodity earnings, and much increased aid. The convention has rightly been described as historic. For this and other reasons, almost all Commonwealth countries, advanced and developing, have expressed their hope that Britain will stay in the Community.

As to Asian countries such as India. Sri Lanka, Bangladesh and Pakistan, a good deal has been achieved for them already. They have benefited from EEC emergency aid to those countries most seriously affected by the oil price rises. India has an agreement with the EEC, and the other three are negotiating them. The Generalised Scheme of Preferences has been much improved, and earlier this month the Council of Ministers agreed to work for continuing improvements to the scheme, with particular emphasis on the interests of the poorest developing countries, including those of the Indian sub-continent.

But it cannot at this stage be claimed, putting aside what has been achieved, good and less good, that all the problems so far as Asian countries are concerned have as yet been solved. In principle, yes, but there is so far no commitment about the necessary financial provision.


Value Added Tax (VAT)

The manifesto commitment is: No harmonisation of value added tax which would require us to tax necessities. The proposals now being discussed in the Community are concerned with agreeing a uniform assessment base for VAT. They provide for our system of zero rating. We will be able to resist any proposals which are unacceptable to us.

Contrary to the situation four years ago, this VAT problem of harmonisation is no longer a real threat. So far from harmonising, a number of countries are insisting on increasing the number of VAT rates within their own tax systems and it seems there is no danger to our freedom here at all. That was not the position four years ago.

To sum up, therefore, I believe that our renegotiation objectives have been substantially, though not completely, achieved.

I have set out at some length the outcome of the negotiations on each objective mentioned in the manifesto, including those where the passage of time has diminished or eliminated the threat that we foresaw.

What now falls to be decided is whether on these terms, the renegotiated package as a whole, the best interests of Britain will be best served by staying in or coming out.

It will be seen from what I have said that the Government cannot claim to have achieved in full all the objectives that were set in the manifesto on which the Labour Party fought and won two elections last year. Some we have achieved in full; on others we have made considerable progress, though in the time available to us it has not been possible to carry them to the point where we can argue that our aims have been completely realised.

It is thus for the judgment now of the Government, shortly of Parliament, and in due course of the British people, whether or not we should stay in the European Community on the basis of the terms as they have now been renegotiated.

So I do not believe that in taking this decision, if that is the decision which the country takes, we are entering into a narrow regional grouping to the detriment of our world-wide relationships. My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe. We have to face the fact that practically all the members of the Commonwealth, deciding on the basis of their own interests and what is good for them, want Britain to stay in the Community. Of course, it is a fact that many have diversified their trade away from Britain in the past four years. In many cases they felt themselves forced to do so as a result of the 1971 decision and terms. But a number also, New Zealand for example, have entered on a radical reorientation of their political stance related to the region surrounding them and are developing their economic policies in a similar direction.

Again, I would not commend what I have announced to the House if this meant in any way weakening our transatlantic relationships. Relations with the United States are closer and better than they have ever been at any time, certainly in this generation, and in some contrast to what they have been in very recent times. Nothing in today's decision will in any way weaken that relationship.

Her Majesty's Government have decided to recommend to the British people that they should vote in favour of staying in the Community on the terms which I have described. I have given the Cabinet's view. I have only this to say before I sit down.

First, while perhaps some of these things might have been improved even if the Government had not entered into these tough negotiations—I say might have been—the renegotiations have themselves been more than a catalyst of change, they have been an initiator of change.

The second thing is this: many of us, including myself, have at various times been half terrified by reading the legal jargon, the apparently fussy legalism and theology, not to mention some speeches and statement of enthusiastic supporters, and not to mention interference in things, such as beer, milk, hops and un-eviscerated chickens. Much of this nonsense has now stopped—certainly those fussy Commission intiatives to which I have referred on those items. The Foreign Secretary and I have found the Market much more flexible than I think either of us expected, both in individual questions and in what we have noted as a substantial shift of power over these past 12 months. It is remarkable how flexible it can be when there is a British Government who are prepared to stand up for British interests, and not the kind of people who negotiated in 1971. They never even gave the Market a chance to be flexible.

Renegotiations, agricultural and financial crises, whatever the causes may have been, all have played their part in putting more power into the hands of national Ministers meeting in the Council of Ministers. I believe that few would have thought, even a year ago, that we would Minister of Agriculture negotiated on have got agreement, through what the beef, to what in practice is freedom to return to the principles of Tom Williams' Agriculture Act of 1947 in the matter of deficiency payments, which had been specifically excluded as a means of farm price guarantees as a result of the 1971 negotiation package. We got that changed, and no one would have thought that likely a year ago.

A fundamental change not in the Treaty but in the practice has been brought about by the new system of Heads of Government summits of a regular, routine character, started with that convened by President Giscard d'Estaing in Paris last September, and continued by the December meeting, and now the Dublin meeting. This system has, already, de facto reasserted a degree of political power at top level, not only over the month-by-month decisions but over the general method of operation of the Market. This does not mean it has become a Europe des patries. It is a Community. But, as compared with even a year ago, vital interests of individual nations are now getting much more of a fair hearing, and the political power in asserting those interests has certainly increased more than appeared possible in the battles of 1971, 1972 and 1973: more, in my view, than even a year ago, when the result of the February election made the manifesto objectives for the first time no longer a domestic, political argument but a governmental mandate for renegotiation.

My right hon. Friend the Leader of the House will announce our proposals for a two-day debate immediately after the Easter Recess. [Interruption.] If the Opposition do not want it, we can always use the time in some other way. What I have said this afternoon, including the announcement of the Government's decision, means that, for that parliamentary debate. the case now rests, and thereafter, following the referendum campaign, the case will then rest for the people to decide.

Mrs. Thatcher

Is the Prime Minister aware that we welcome his decision to recommend that we stay in the Common Market? We also welcome his statement that it has not been necessary to change a single clause in the basic treaties to carry out these negotiations, that they have all been completed within the exist ing terms and that, presumably, in due course of time there will be other improvements also within the existing terms, in the normal course of events. Is he aware that we also welcome his statement that practically all Commonwealth countries wish us to stay in the Common Market and his statement that the special relationship of this country with the United States will not be changed in any way but that it is his intention to strengthen it?

May I put to the right hon. Gentleman one main question? He was quite clear that this is the recommendation of Her Majesty's Government. Do the normal principles of collective responsibility apply to that decision? That would be the normal interpretation of a statement so clear and unequivocal, that Her Majesty's Government had decided to recommend the British people to vote for staying in the Community. I think that it will be a great pity if the one clear statement of the Prime Minister turns out to be unclear. If he does not intend to carry out the normal principles of collective responsibility, will he spell out the criteria which have decided him to depart from those principles on this occasion, so that we may know when it will occur again?

The Prime Minister

I am grateful to the right hon. Lady. She welcomed the fact, I think I heard her say, that we have not in these negotiations, these very fundamental changes in the terms, had to ask for any changes in the treaties. Surely that information was not new to her. It was in the White Paper that we published in April of last year, so she must have been aware of that. We said then that we hoped that it would not be necessary to ask for changes in the treaties. What in fact we have done is changed the 1971 terms without changes in the treaty, although, as I have said today—I also mentioned it last week, I think—we have given notice of the possible need to ask for treaty changes; for example, in respect of steel and even possibly in respect of New Zealand.

I welcome the fact that the right hon. Lady has acknowledged what she knows to be a fact, as the House does, about our relations with the United States. She will, of course, take full collective responsibility for the lower ebb of relations with the United States before we improved them last year. Presumably—[HON. MEMBERS: "Cheap."] There is no doubt about that, and it has been made clear publicly by the United States Government in recent weeks.

As for the right hon. Lady's question about collective responsibility, I announced in January the policy that I intended to follow on this unique matter, on a matter on which not only this party has divisions but the Conservative Party has divisions and, indeed, all major parties—

Mr. Donald Stewart


The Prime Minister

Expecting, as the the Latin lesson says, the answer "No" I said that all "major" parties had divisions in them. This is true, and the same applies to many families and households in the country.

I announced that this would be the position. But the last person that I am going to listen to on collective responsibility is the right hon. Lady. We all welcome back to the councils of this House the right hon. Member for Sid-cup (Mr. Heath). We hope that he has come back rested and refreshed. But he will have noticed that, in his absence, there are very few major elements of the policy of the Government which he headed, and of which the right hon. Lady was a member, on which there has not been dissociation—

Mr. Prior

Why do you not answer?

The Prime Minister

I have answered. [Interruption.] I can understand their sensitivity on this, when no one had the guts to dissociate himself when the right hon. Gentleman was in charge of the Government but only when his back was turned—

Mr. Prior

Answer the question.

The Prime Minister

—including the right hon. Gentleman. Remembering when the cock crowed for the right hon. Gentleman, I would say that at least he had the decency to abstain from his present Leader about a fortnight later.

With regard to the question that the right hon. Lady has put—[HON. MEMBERS: "Hear, hear."]—I have answered it. I answered this in January. I said that I was agreeable to this agreement to differ in the unique circumstances of this referendum. The referendum is unique, as the right hon. Lady herself has said. I believe that it is right in the circumstances, so that a fair and free debate can take place in the country on the most important decision that we have had to take in this generation.

Mr. Thorpe

May I first welcome this statement? May I congratulate the Prime Minister on the consistency that he has always shown on European matters? Is he aware that when, in the early part of 1967, he said that he would not take "No" for an answer, we knew that that was exactly what he meant—no more and no less? Would he, in fairness to himself, confirm that the words he used were "I have given the Cabinet's view."? May we take that at its face value or any other value? May we, as those who agree with the Prime Minister, wish him well in obtaining the full-hearted consent of the Labour movement? Finally, since the Prime Minister rightly attaches importance both to the sovereignty and to the representative nature of Parliament, if the recommendation which he is rightly and enthusiastically pressing upon the British people is resisted, will he not find it very difficult to remain in office?

The Prime Minister

First, I thank the right hon. Gentleman for what he said about consistency. In 1961, when Mr. Macmillan—[Laughter.] Yes, he is going to get it now. When Mr. Macmillan said that they were applying for entry because it was the only way that they could find out what the terms were, we all said that we would judge by the terms. In 1967 we were told after we had visited six countries that if we wanted to know the terms we should apply. We said that we were applying for that very reason. That is what we said in our manifesto in 1970. That is what the Conservative Party said in 1970. The Conservatives' mandate was to negotiate, no more, no less, and they were not going to do it without the full-hearted consent of the people.

We have been consistent here. I regret that the right hon. Gentleman is falling below his usual standards—or his brief writers are—when he refers to the statement about taking "No" for an answer. That was made specifically, I think, on 25th May 1967, but I should have to check that—

Mr. Thorpe

It was the 17th.

The Prime Minister

The 17th: I am obliged. That was said in the context that day or the day before of President de Gaulle's decision to veto any negotiations. It was on the question of the veto that I said that we would not take "No" for an answer. But no one at that time would have said that he would negotiate and get in whatever the terms. Even the Tory Party never said that. They very nearly succeeded in doing it, but they never said that they would accept whatever terms were offered—and no more did I. I now believe that the terms have been sufficiently improved.

The right hon. Gentleman asked about Cabinet judgment. Yes, Sir, this is a Government decision. Not all Government decisions are taken unanimously—as we now know from the right hon. Lady. She did not agree with anything that was done in those days. I have undertaken that when my right hon. Friends have had time to consider their position and when we have discussed the matter a little further, any one who wish publicly to dissociate themselves shall identify themselves—if they do not, I will—in order that the position can be clarified. I gave that assurance in January. I repeat it now.

Mr. Donald Stewart

Is the Prime Minister aware that in the coming battle on the referendum he will be leading a coalition of the Labour, Tory and Liberal Parties and that my party in Scotland will be fighting against that coalition? [HON. MEMBERS: "Some of them"]. Is he also aware that the temporary triviality announced today could have been arranged within the present Common Market set-up and that it is simply ground bait until the referendum has taken place and was quite unimportant within the context of the Treaty of Rome? Does he accept that in Scotland there will be great dissatisfaction that nothing has been done on fishing, steel and energy, but that primarily we shall fight this on the issue of sovereignty, because we are a people who know what it means to have lost our sovereignty?

The Prime Minister

The hon. Gentleman's assertion that I am leading a coali- tion of the Labour, Conservative and Liberal Parties is as offensive to the Leaders of the Liberal and Conservative Parties as it is to me. In fact, of all the coalitions, judging by the various things that have been said at elections, the various ways that votes have been won and the variegated membership, there is no coalition so diversified in the history of this country as that led by the hon. Gentleman.

Regarding the hon. Gentleman's other point, this could not have been got easily. It required extremely difficult and tough negotiations.

Mr. Ashley

The issue at present is not the cynicism or, indeed, the jealousy of hon. Members of the Opposition about these negotiations. Does my right hon. Friend not agree that Ministers and, indeed, back benchers on the Government side of the House who have been demanding better terms and are now presented with much better terms must be the most consummate contortionists if they are now to present the case for pulling out of Europe?

The Prime Minister

I am grateful to my hon. Friend for what he has said. For my part, I did not notice the appearance of jealousy on the faces of hon. Members opposite—a little cynicism perhaps, yes, behind their twittering; but I did not notice the jealousy in particular.

Mr. Powell

Is the right hon. Gentleman aware that, whatever view may be taken of the details of the statement he has made, the people of this country will not, over time, submit to be taxed otherwise than by the authority of this House, nor to live under laws which are not made by this House?

The Prime Minister

I did begin by saying that while I was setting out the terms achieved in detail, which matter to a great many of us and to a great many outside the House, some right hon. and hon. Members would decide their attitude on broader considerations. Everyone knows where the right hon. Gentleman has stood on these matters.

The Secretary of State for the Home Department (Mr. Roy Jenkins)

And on other matters.

The Prime Minister

As my right hon. Friend has said—and on other matters.

I do not think that those who take the view that virtually whatever the terms we ought to be in or whatever the terms we ought to be out will be very much affected by these terms. But many of us, including myself, take a very serious view of the question of the terms. That was why I spelled them out to the House.

On what I know is an anxiety of the right hon. Gentleman, I would say this to him. I am sure that his deep studies of this question will not lead him necessarily to take a different view. I believe that there is much more assertion of political power now than there was a few years ago. We saw it particularly in Dublin last week. Many criticisms have been made by many of us, including myself, about the irresponsible—in the best parliamentary sense of that word—powers of certain of the institutions, but these are now coming much more under a degree of control as a result of the initiatives taken at the Heads of Government conferences. The political element is now much more powerful than it was a year ago.

Mr. Ashton

Does my right hon. Friend remember that in 1972 we had literally dozens and dozens of divisions in the House over several weeks on the issues put before us by the then Conservative Government? Will my right hon. Friend give an assurance that every one of those divisions has been resolved and that we have no disputes now like those we had then?

The Prime Minister

On that occasion we voted primarily against the terms, which have been very much improved. But I said then, and so did many of my hon. Friends, including some who were quite strong pro-Marketeers on the principle as well as even on the terms, that—as we had made clear in the 1960s —had we done the negotiations and got terms we considered suitable, we would have legislated in a way that was very different from the way in which that was done in order to put the decisions on the statute book. They have been put on and now ratified by various orders, and many of these divisions are, therefore, in a sense, dealing with what was relevant in 1971. We shall continue at all points—indeed, we are now doing it —examining the legislation to see whether there is any need for change in the legis- lation, either on individual items or, where appropriate, on powers.

Mr. Tugendhat

Will the Prime Minister tell the House, for the sake of clarity, how many members of the Cabinet, and who they are, have supported his position, and how many have opposed it, and who they are?

The Prime Minister

There is a Cabinet decision that I have announced. I have undertaken that after a few more discussions I shall see that the House is informed as to who they are. We never had very much information about the number of times the right hon. Lady dissociated herself.

Mr. Michael Stewart

Is my right hon. Friend aware that although the Opposition will make certain ritual noises of disparagement, they must be aware that the improvements that he and his colleagues have secured are substantial and of great benefit to the country? Further, taking up the question asked by the hon. Member for the City of London and Westminster, South (Mr. Tugendhat), will my right hon. Friend give an assurance that in view of the constitutional interest in the agreement to differ, which most of us believe to be a sensible arrangement, the House will be informed of the number and names of the dissidents before we all read them in the newspapers?

The Prime Minister

That is something that can never be undertaken by any Government or any party. But I am glad that my right hon. Friend supports what has been said, and I thank him for what he said about the negotiations. I hope that he will not be too critical of the Conservative Party, because a party that has not a single policy on which its members can agree, and the members of which have dissociated themselves from every policy that it had, can do no more than make ritual noises of disparagement.

Mr. John Davies

Does the Prime Minister realise that the last 12 months have seen serious damage to the reputation of this country in Europe as a result of all that he is now claiming to be so beneficial? Will he now make it his business to repair that damage and to set this country back in the councils of Europe to where it was when he took over the Government?

The Prime Minister

The right hon. Gentleman is quite wrong about the last year. Indeed, the Community is now a great deal more realistic in the way that it operates. I certainly do not intend to restore the position of Britain in the Community to what it was when the right hon. Gentleman was the Minister responsible, because we do not grovel before the other side; we fight for British interests.

Mr. Roy Hughes

Will the Prime Minister appreciate that there is no enthusiasm for this venture among the ordinary people of this country who form the heart of the British Labour movement? Would it not now be the decent thing to do, before any recommendation is made, first to present these renegotiations to the annual conference of the Labour Party, particularly bearing in mind all the fudging on this issue that has taken place in that body in recent years? Or are the Prime Minister and the Foreign Secretary now in the hope that they might do very well from Tory voters in the south-east of England?

The Prime Minister

I recognise, of course, the authority of my hon. Friend to speak for all the ordinary people in Britain. For myself I prefer to await the result of the referendum. It will give them a rather more articulate form of expressing their individual views. Of course, there will be a party conference on this question, but my hon. Friend will be aware, because perhaps he was involved in this, that there are a number of leading figures in this party, of whom I am one, who for very many years found the decisions of the party conference extremely irksome, and I am sure that he did, too, as did most people on the centre or left of the party at that time.

Mr. Costain

Does the Prime Minister appreciate that we on the Opposition side can see the sub-committees of the Cabinet sitting there on the Front Bench? Does he appreciate that we realise the difficulties he has in getting unanimity in his party? The charade which has gone on over renegotiation is an example of that. However, will he be honest to the country and agree that what he has announced only confirms what my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said during the original negotiations—that we would get better terms when we were in but that we would first have to join?

The Prime Minister

I do not agree with the hon. Member. We have got better terms because we asked for them, demanded them and pressed for them. I believe that these terms could have been got in 1971. I do not agree with him and I do not believe that any Heads of Government in Europe would agree with him either.

Mr. William Hamilton

Is my right hon. Friend aware that there are large numbers on this side of the House who always thought that he would do it? Can my right hon. Friend assure us, on a more serious note, that the powers that are being spelled out for the National Enterprise Board and the Scottish Development Agency will in no way be inhibited in the immediate or long-term future? Will he further assure the House that if the referendum result should go against the Government this will in no way soften and override the decision of the Government now reached?

The Prime Minister

As for my hon. Friend's opening remarks, praise from him is praise indeed, even if he went on to suggest that it was not on a serious note. As for my hon. Friend's assertion that this was always likely or, as he would think, certain, my right hon. Friend the Foreign Secretary and I can confirm that even a month or two months ago when we were not getting our terms these matters were very much in doubt. My right hon. Friend and I agreed and so warned the EEC that we would have no alternative but to recommend the House, the party and the people to reject continuing membership. Even last week there were times in Dublin—[HON. MEMBERS: "Rubbish."] Conservative Members are so conditioned to accepting everything put in front of them that they do not appreciate these matters. My hon. Friend is quite wrong in suggesting that until very recently there was no question of the outcome.

As for the National Enterprise Board and the Scottish Development Agency, and so on, we see no threat in the powers or the attitudes of the Community to what is proposed. On all matters affecting industry, trade, regional development, steel and the rest we are conditioned by the requirement, which is reasonable and which we have always tried to observe, that we do not use any of these methods, machineries or policies for giving us an unfair advantage in international trade, for example, by subsidy or price fixation. We were tightly held on these matters as members of EFTA. The restrictions in EFTA were very tight, and rightly so, and I understand that the EFTA convention with the EEC requires it to observe EEC rules on the question of internal methods which might distort competition between nations.

Mr. Marten

As one who has always taken the broader view to which the Prime Minister referred, and who did not attach very great importance to the fact that he was trying to renegotiate, may I ask whether he agrees that the political control and flexibility which he said had increased in the recent year or two is very much related to the change of personalities of the leaders within the Nine, and that, equally, if these personalities should change we could well go back to the situation of previous years? Will the Prime Minister reflect upon one aspect in his manifesto which, as he knows, I carry very close to my heart, that if the referendum says we stay in—and I do not want to argue that point now—it will he right for the Government to play a full part in the development of a new and wider Europe? In that context will the Prime Minister say clearly whether the Government are in favour of a directly elected European Parliament, and how is political union defined?

The Prime Minister

There may be something in the hon. Member's point. There have been changes of personalities. Seven of the nine Heads of Government have changed in the last 12 months and there have been changes in the political complexion of member States in that time. The majority of the Nine are either Social Democrat or Democratic Socialist led, or are coalitions involving such parties.

That makes some difference. We must guard against retrogressive and reactionary changes within the leadership of the Nine, although that lies within our control only in the case of one country.

On the question of the European Assembly and elections, I refer the hon. Member to the statement made in the communiqué issued after the Paris meeting in which our position was entirely reserved on all these matters until after the referendum.

Mr. Marten

That is the point.

Mr. Gwynfor Evans

In renegotiation of the terms, was any consideration given to the relationship between Wales and Brussels? Since the Common Market has now decided to establish a permanent office in Wales and to put it under the charge of Mr. Gwyn Morgan, a past assistant general secretary of the Labour Party, should not Wales now have an office in Brussels?

The Prime Minister

It is entirely appropriate that the Commission should recognise all the important areas, the individual regions, within the United Kingdom. However, I heard nothing said in any of the talks in which I was involved—I do not know whether my right hon. Friend the Foreign Secretary heard anything—saying that they wanted to negotiate directly with the hon. Member's party or with anyone else who has been an elected Member of Parliament for Wales. They were dealing with the duly constituted Government of the United Kingdom of Great Britain and Northern Ireland.

On the hon. Member's other question, he knows, especially in relation to internal matters of trade and industry and so on, that these are very much part and parcel of what we have been discussing and on which in due course we shall be legislating in relation to devolution.

Mr. Skinner

Does my right hon. Friend appreciate that it comes somewhat ill from him to make rather snide comments about the Labour Party and the National Executive Committee in responding to the question by my hon. Friend the Member for Newport (Mr. Hughes), especially when we take into account that it was a joint meeting of the Cabinet and the NEC that drew up the manifesto to decide the terms? If that is the case, why did my right hon. Friend not report back to the NEC and ensure that, before any decisions were made by the Cabinet, this joint meeting also declared itself and upheld the Labour Party conference? But then it might not be my right hon. Friend's last word.

The Prime Minister

When my hon. Friend has had about 20 years' experience of the national executive and conference he will speak with even more authority than he does at the present time. I have never been in doubt about my hon. Friend's credibility on almost any subject, but he must realise that many of those who have taken exactly the same view as he takes on most issues had to spend years of their life fighting against conference decisions and the executive, and fighting for their rights as Members of Parliament—and my hon. Friend knows exactly to whom I am referring—over many years. I do not think, therefore, that he can stand on his head and say that the conference and the executive should now be regarded as respectable because they are a little nearer now to his way of thinking than the thinking of those who fought against them in the past.

I certainly do not accept what my hon. Friend says. He will be glad to know that I have already talked to the general secretary of the party and that there is to be a special meeting of the national executive committee. I am sure that he is not suggesting that I should not have made a statement to Parliament before I met the national executive. There is to be this meeting of the executive committee next week and we have been discussing the advancement of the projected date of the annual conference. I hope he will be very pleased with all that.

Mr. Hurd

Could the Prime Minister help the House in a very real practical difficulty? When the list of dissenting Ministers is published, are we to take it that, over the range of EEC subjects, statements, letters and answers to hon. Members from those Ministers are worthless as statements of Government policy?

The Prime Minister

I am always anxious to help the House and hon. Gentlemen. I will make it my business to deal with the exact question of the conduct of business in respect of such matters when I give the information that the hon. Gentleman is seeking.

Mr. Luard

Will the Prime Minister accept that, given the substantial success of the Government in securing terms meeting those set out in the Labour Party manifesto, large numbers within the Labour movement will welcome the statement that he has just made as being the only decision that is fully consistent with both the words and the spirit of the manifesto, and will he agree that, provided the British people now decide that Britain should stay in the Common Market, this will not only provide this country with an opportunity of playing a more important role on the world stage than otherwise would be the case but will also provide an opportunity for the Labour Party to play a more important rôle in building democratic Socialism in Europe?

The Prime Minister

I am grateful to my hon. Friend, and of course I respect his deep knowledge of and interest in these things. I am sure that I would be the last person to suggest that our influence in word affairs depends solely upon this particular aspect. It depends to a very high degree on our transatlantic relationship and it depends upon our Commonwealth relationship, and I am also happy to feel that relations between this country and the Soviet Union are very much recovered from what has happened in the past.

Several Hon Members rose

Mr. Speaker

I would remind hon. Members that there is to be a two-day debate on this subject immediately after the Easter Recess.