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Commons Chamber

Volume 889: debated on Monday 7 April 1975

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House Of Commons

Monday 7th April 1975

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Energy

International Energy Agency

1.

asked the Secretary of State for Energy whether he will make a statement about the latest meeting of the International Energy Agency.

The International Energy Agency's Governing Board met in Paris on 19th and 20th March. It agreed three inter-related measures of co-operation in the accelerated development of new energy sources. It also discussed the approach that participating countries would adopt in the dialogue between oil consumers and producers, the preparatory meeting for which is taking place in Paris today. 7th April.

Since the agency has powers which are a good deal more supranational than any possessed by the EEC, including powers relating to the allocation of our oil supplies, will the Minister ask his right hon. Friend to seek a suitable occasion to explain how he supports British membership of the agency while opposing British membership of the EEC?

There is a clear distinction between the two sorts of association. The International Energy Agency is concerned to deal with the situation where there is a shortfall in oil supplies, and the automatic arrangements come into effect in that arrangement. They are different sorts of organisations, but both involve a certain element of diminution of sovereignty.

What is the justification for this body taking measures to keep up the price of oil?

The body is proposing to explore the possibility of having a floor price for oil to preserve the investments which some other countries, including this one, are making in alternative energy sources.

Do the Government intend to bring the agreement before the House of Commons? Is any action required by this House before the Government can ratify the agreement, as they have to do before the end of May?

I think that the agreement is published as a Command Paper, and I am sure that the right hon. Gentleman and many of his hon. Friends have read it already. It requires to be ratified by the House.

North Sea Oil Production

2.

asked the Secretary of State for Energy what is his estimate of the expected production of oil from the North Sea in 1975 and in each of the following three years.

My right hon. Friend will be publishing this month estimates of production and reserves of oil and gas in the 1975 Report to Parliament.

Is my hon. Friend reasonably confident that levels of production will not be disappointing in the next two or three years, despite the unusually adverse wind and weather conditions experienced in recent months?

Like all enterprises in the North Sea, ours are subject to the accidents of working in such a hostile environment. It is especially disappointing that there will be a hold-up in production from the Argyll field due to the damage done to the production riser. This is one of the difficulties which cannot be avoided in North Sea oil development. There will be less oil landed this year than was thought at one time. We believe, however, that the targets for the 1980s will be maintained.

A great deal of wind on this subject has come from the Government. Is Government policy itself, which involves the taking of participation in the North Sea fields, accepted by the Government as being the cause of delay in North Sea development?

There is no evidence to indicate that the Government's proposals on participation have had any effect on development in the North Sea. At the moment, more rigs are exploring the North Sea than ever before.

Will my hon. Friend confirm the report in theFinancial Timesthis morning by a stockbroker indicating that there has been no delay due to Government policy in this respect?

This must be the view held by any objective observer of the oil scene. Opposition Members cannot be regarded as being in that category.

Will the hon. Gentleman assure the House that the Government have not been influenced by representations from the Scottish National Party, with its attitude for cutting back in exploration for oil? In view of what the Minister has said, it is worrying for many Opposition Members to feel that there may be some tendency for the Government to yield to pressures from the nationalists.

The Government are willing to listen to representations from anyone, but we treat them with the seriousness they deserve. The policy of the Scottish National Party to cut back oil production to 40 million tons a year would totally ruin the United Kingdom offshore supply industry.

Can the Minister give us some indication of the development of Celtic Sea oil and say whether there is any truth in the story going the rounds in Wales that Celtic Sea oil development is being delayed because of the pressure being put on North Sea oil? Is there any land-based development in terms of ports and adjacent land for Celtic Sea oil development?

There is a difference of opinion between the Scottish National Party and Plaid Cymru. The latter is all for speedy oil development in the waters off Wales. Obviously the Government are interested in future exploration in the seas round Wales, and Wales already shares to a considerable extent in the offshore oil market. At the moment, however, attention is being concentrated on the prolific fields east of the Shetlands. That is understandable since that is where strikes are most likely to be made.

Domestic Supplies (Price)

3.

asked the Secretary of State for Energy whether the cost to the domestic consumer of coal, electricity and gas, respectively, has risen faster or more slowly than the retail price index since 1st March 1974.

Between 19th February 1974 and 18th February 1975, the General Index of Retail Prices rose by 20 per cent., while the constituent subgroups for coal and coke, electricity and gas rose by 26 per cent., 35 per cent. and 10 per cent. respectively.

Those are not happy figures, and the figures for 1975–76 are likely to be even less happy. Does my hon. Friend accept that increases of this kind bear disproportionately on the poor, and will he consider publishing a statement each time his right hon. Friend approves an increase in the price of electricity, gas or coal, showing the House the impact of the increase on the poor?

I assure my hon. Friend that the effect of such increases on the poor consumer has been taken into consideration. My hon. Friend has referred to this subject previously, and I know that he is interested in the impact on the index of retail prices. I can tell him that the estimated direct effect on the index of the average domestic basic electricity tariff increase of 28½per cent. announced on 25th March will be 0·7 per cent. If my hon. Friend has particular suggestions to make, my right hon. Friend, as he has always said, is perfectly prepared to listen to them.

Would it not at least be helpful if the Department of Energy coordinated its activities and allowed grants to be made available to the relatively less well off for purposes of insulation?

In her statements to the House, my right hon. Friend the Secretary of State for Social Services has made clear that she has taken into account the need to assist poor consumers and pensioners. The question of insulation and grants for that purpose has been raised in the House before, when it was made clear that it would be extremely difficult to start from scratch now to insulate dwellings, this being something which all Governments should have tackled some considerable time ago.

Does my hon. Friend realise that in smokeless zones in my constituency domestic consumers have recently had to face yet another increase in the cost of solid smokeless fuel amounting to 14 per cent., bringing the price per hundredweight bag up to £2? This is causing real hardship to poor people, especially old-age pensioners. Is there nothing that the Department of Energy can do about it?

In the context of my hon. Friend's question, relating to the effect of recent price increases, whether for coal or for smokeless fuel, I can tell him that of the expected £370 million extra revenue accuring to the National Coal Board in 1975–76 only £40 million will come from the domestic market. My hon. Friend expresses special concern for pensioners, and I remind him that there was a record uprating of pensions by 29 per cent. last July, with a 16½per cent. increase in the maximum amounts of family income supplement, and there is to be a further uprating of pensions and related benefits of 16 per cent. this April. Moreover, there have been extra heating additions. If my hon. Friend wishes to pursue this matter, I am sure that my right hon. Friend the Secretary of State for Social Services will be only too happy to give him any information he wants.

Power Station Efficiency

4.

asked the Secretary of State for Energy what study he has made of the efficiency of power stations; what was the impact on this efficiency of the mass employment of outside contractors, evidence of which has been supplied to him by the hon. Member for Cannock; and if he will make a statement.

My right hon. Friend regularly reviews the efficiency of power stations with the Central Electricity Generating Board. The use of outside contractors is, however, a matter falling within the day-to-day management responsibilities of the industry.

My hon. Friend will be aware that an investigation at power stations in my constituency was recently undertaken on my behalf. Will he take it that there is a considerable impression in that area that the employment of contractors, and hence of subcontractors, must involve a profit at each stage and that this can in no way contribute to economic efficiency? Will he accept that there is a dark suspicion among workers in the industry that in some of the employment of contractors and subcontractors there is an element of hidden denationalisation?

I am aware of my hon. Friend's constituency interest and of the information which he has gathered. I understand that he had a full explanation from Mr. Arthur Hawkins, the Chairman of the CEGB. I ask my hon. Friend to accept from me that what he regards as the high level of contractor involvement in Rugeley in 1974–75 was due to a major overhaul at the station, and there was no question of the industry's own staff being underemployed or being prevented from earning their bonuses. On the contrary, the staff have earned the maximum bonus available over the period of the overhaul.

Would not the biggest improvement in the economic efficiency of power stations come if the CEGB were directed to do something about marketing its waste heat? What is the Department doing to speed up that programme?

There is a Question about that later on the Order Paper. I remind the hon. Gentleman that day-to-day matters in the running of the Central Electricity Generating Board are matters for the board.

"Save It" Campaign

5.

asked the Secretary of State for Energy whether he will make a statement about the results of his "Save It" campaign.

My officials will shortly be assessing the first results of a scientific survey into the impact of the advertising during the launch phase of the campaign which opened on 20th January. I am, however satisfied from the evidence of interest by the Press, radio, television and public that the campaign has already made a substantial impact.

I am planning to develop the campaign during the spring and summer at a cost in advertising of £1.8 million. The main thrust of the campaign will be to persuade the public to improve the insulation in their homes.

I congratulate my right hon. Friend on the good sense and tone of his campaign compared with the panicky "Switch off something" and "Clean your teeth in the dark" which we had last year. Is not my right hon. Friend afraid, however, that people will get used to his campaign, just as they have got used to the Government's health warning on cigarette packets?

I hope not, because 1 believe that those, such as my hon. Friend, who have taken an interest in the campaign feel that it is well worth while, and it is already having a substantial impact. Energy consumption is down already, and I hope to be able to give the House some figures shortly.

Disregarding the complacency of the hon. Member for Nuneaton (Mr. Huckfield), is the Secretary of State satisfied that shops, offices and hospitals are yet making nearly enough savings on heating? If not, what will he do about it?

I hope that the survey will reveal what further needs to be done, and I shall not hesitate to take any action which I regard as necessary.

Is my right hon. Friend aware that motorists are almost entirely disregarding the speed limits which were regarded as part of the campaign to save energy and that anyone with a car of more than 950 cc engine capacity seems to be motoring at the highest speed which his engine allows? Does not my right hon. Friend feel that a call ought to go out from him and from the House that people should observe the limits, not because it is a criminal offence to break them but because it is a national necessity to observe them?

It is a necessity to observe them, and I should be sorry if people were disregarding the law in such circumstances. I have no evidence that the law is being avoided to that great extent. Perhaps it would be helpful if I gave the House some statistics showing that energy consumption has gone down. For example, total energy consumption in 1974 was 4½ per cent. down on 1973. Oil consumption in 1974 was down by over 6½ per cent. compared with 1973. There is a lot more evidence to suggest that savings have been made.

In view of the mild winter, of rising unemployment and of the stagnant economy, why does the right hon. Gentleman think that his figures have anything to do with his Save It "campaign?

The right hon. Gentleman has constantly criticised the "Save It" campaign. I am always loth to criticise him in view of his fine record in energy conservation, but it is about time he started helping the Government in their conservation campaign instead of constantly carping and criticising.

Central Electricity Generating Board

6.

asked the Secretary of State for Energy if he is considering making any changes in the membership of the board of the CEGB.

Is my right hon. Friend really satisfied with the present performance of the board? Would he not agree that it is high time the board was given a fresh impetus by new appointments particularly to improve the management structure and organisation?

I do not want to anticipate the inquiry that I have set up under Lord Plowden. I know that my hon. Friend and the whole House will be looking for suggestions and anything else coming out of the inquiry. If action is required and recommendations are made, I shall consider them seriously.

As the right hon. Gentleman took the wrong decision on the nuclear power policy, will he refrain from altering the board and blame only the Government for their ill-fated position?

The hon. Gentleman is in a minority of two, I think, in the House in his support of the American light-water reactor. I should have thought that recent reports in theObserverwould have confirmed that the decision that the Government took on the SGHWR was the right one.

Quite apart from the choice—and he knows the position of the Opposition Front Bench on this matter—will the right hon. Gentleman recognise that what happened at Browns Ferry was nothing to do with the recommendation made to him by the Central Electricity Generating Board, because it was to do with the boiling water reactor whereas the CEGB proposal was for the pressure water reactor, an entirely different system?

I am not sure that I do know the position of the Opposition Front Bench. I know the position of the hon. Member for Abingdon (Mr. Neave), but the right hon. Member for Wanstead and Woodford (Mr. Jenkin) has yet to express a firm opinion about the SGHWR and I think that he may be the only Member who agrees with the hon. Member for Bedford (Mr. Skeet) in supporting the American reactor.

Self-Sufficiency

7.

asked the Secretary of State for Energy when he now expects Great Britain to be self-sufficient in oil.

9.

asked the Secretary of State for Energy when he now expects the United Kingdom to be self-sufficient in energy.

There is every prospect that we shall achieve self-sufficiency in oil, and in energy generally, by 1980.

If the Secretary of State is saying that the North Sea oil programme is on target, will he be more honest with the House and agree that that is primarily because the shape of the target has been changed as the expected growth in demand in the years immediately ahead is considerably less than it was a few years ago? Does he also agree that overall North Sea production work is now between one year and two years behind hand, that this has led to a loss to the balance of payments of several hundreds of millions of pounds, and that the Government must take no legislative action that will delay North Sea production work even more?

We have not taken any action to delay North Sea oil exploration. I have never denied that there has been some slippage. The slippage started in 1973. Mr. Tom Boardman, then Minister for Industry, announced in the first Brown Book of that year that it was intended that by 1975 we should be getting 25 million tons of oil from the North Sea. The slippage took place then and since then, but the 1980–85 prospect is still OK.

To what extent will the coal industry contribute to national fuel self-sufficiency by 1980? Will the right hon. Gentleman provide figures to show how we shall achieve that by 1980 by stating the expected production from the North Sea for the years between now and 1980, rather than waiting for a miracle in 1980?

We have to go all out to get North Sea oil as quickly as possible, but in terms of overall self-sufficiency in fuel the coal industry, management and men, has a great deal to contribute. I want coal production to be not only maintained but improved. The hon. Gentleman will have seen figures over the past few weeks to show that production in the industry has gone up.

Is there any advantage in being self-sufficient in oil if oil can be obtained more cheaply elsewhere?

That is the$64,000 question. I have seen no evidence to suggest that oil prices will fall dramatically. 1 think that perhaps the major oil producers in OPEC will take steps to keep prices up. I hope that that is not the case and that as far as possible oil prices will come down.

Would not my right hon. Friend agree that we have been too dependent on oil from the Middle East and other sources and that various Governments in the past have failed to give sufficient attention to the coal industry? Does he agree that if we had not depended so much on oil from the Middle East, we should not now need to be so humble?

I agree with a great deal of what my hon. Friend says. He and many other members of the miners' group over the years have expressed the view that we ought not to be too dependent on Middle East oil. I can assure my hon. Friend that I for one have learned the lesson of October 1973.

Conservation

8.

asked the Secretary of State for Energy whether he will make a further statement on the progress of energy conservation.

I would refer the hon. Member to the reply given to the hon. Member for Derbyshire, South-East (Mr. Peter Rost) on 24th March.—[Vol. 889, c. 25–6.].

I do not know how to phrase my question to the Minister. Would he care to say what has been the result of the negotiations, which I am sure he will have had with the Secretary of State for the Environment and the Secretary of State for Scotland, about fuel conservation measures in house-building? What steps is he taking to ensure the use of methods that will assist in conservation in this vital respect?

On a point of order, Mr. Speaker. Is it in order for a Minister to refer to an hon. Member by name?

No, it is not in order. Mr. Eadie: I apologise.

There is contact between the Department of Energy and my right hon. Friends, but not of the kind the hon. Gentleman suggested. There is a Scottish aspect to energy saving. For example, the National Engineering Laboratory at East Kilbride has undertaken an assessment of the economics of wave power and the final report is currently being studied by the Department. The assessment was carried out for the Department and was funded by the Department of Industry at a cost of £13,000. The Department of Industry is sponsoring research into design and testing of wave power generation at Edinburgh University with my Department's active encouragement, and this research will cost £65,000 over three years.

Is the hon. Gentleman aware that many householders are dis- couraged from making conservation improvements by the ensuing increases in rates? Perhaps the Secretary of State for the Environment will take steps as soon as possible to relieve householders from rate increases due to such improvements.

I am sure that my right hon. Friend will note the hon. Gentlemen's comments. In any event, I shall draw them to his attention.

Oil Licences (Government Participation)

10.

asked the Secretary of State for Energy if he will make a statement on the Government's discussions with the oil industry on the subject of Government participation in existing oil licences.

Negotiations are continuing on the basis outlined in the answer given by my right hon. Friend the Chancellor of the Duchy of Lancaster to the hon. Member for Bolsover (Mr. Skinner) on 19th February.—[Vol. 886, c. 1338.]

Is the Secretary of State aware that of the 13 billion barrels of oil reserves in Prudhoe Bay in Alaska half is owned by BP/Sohio and that of a similar quantity in the North Sea half is owned by the American oil companies? Is he not suggesting to the American oil companies that they should take a 51 per cent. interest in the reserves in Prudhoe Bay, and would not that be to the detriment of the people of the United Kingdom?

Our research plans in the North Sea in no way affect BP's interest in Alaska.

In view of the evidence published yesterday in theSunday Timesfrom the Wood Mackenzie survey showing the Government's very low taxation take from North Sea oil, will the right hon. Gentleman promise that the Government will not sell the pass in the negotiations on participation as they have done on the question of taxation?

I do not accept what the hon. Gentleman has said about the petroleum revenue tax. Our negotiations with the oil companies to achieve majority participation in existing licences will be voluntary. It may well be that they will vary from one licensee to another, but we shall achieve a fair deal for the British people.

Has not the right hon. Gentleman entirely missed the point of the question of my hon. Friend the Member for Bedford (Mr. Skeet)? Does he not recognise that if the Government break contracts by retrospectively changing the conditions of the licences there is a danger to British investments overseas at the hands of foreign Governments and that BP's investment in Alaska is an obvious target for an American Government seeking to retaliate?

There is not a shred of evidence to suggest that what we are proposing to do in relation to our oil resources in the North Sea affects what BP is doing in Alaska. I can give the right hon. Gentleman and the House that categorical assurance.

Coal And Oil Prices>

11.

asked the Secretary of State for Energy what will be the difference in price per therm between industrial coal and fuel oil after the recently announced round of price increases is implemented.

Industrial fuel prices vary considerably depending upon the quality of fuel used, the location of the consumer and the terms and conditions of supply. Following the increases last December fuel oil prices are estimated to have risen to around 9½ to 10½p a therm, although the trend is now downwards. Following the increases on 1st March typical prices for industrial coal are now between 7p and 8½p a therm—that is, some 2p to 2½p a therm less.

Does the hon. Gentleman accept that if there is another pay increase in the coal industry of the nature of that given earlier this year, coal will become more expensive than oil and probably will be twice as expensive in electricity generation as nuclear power? What do the Government propose to do about it?

We shall have to see what happens in wage negotiations in this in- dustry as in any other. Coal prices are competitive with oil prices.

Will my hon. Friend accept that many of us on this side of the House greatly welcome the Secretary of State's statement of his view of the coal industry in answer to Questions Nos. 7 and 9? Does my hon. Friend agree that irrespective of the price factor. looking towards the year 2000 and beyond, our energy requirements must largely depend on indigenous coal resources?

My right hon. Friend the Secretary of State has repeatedly made clear, particularly in the context of the interim report of the coal industry examination, that the future of the coal industry must be judged against a long-term view of energy prices and that the industry's planning should not be at the mercy of short-term fluctuations in the price of competing fuels.

Power Stations (Fuel Utilisationresearch)

12.

asked the Secretary of State for Energy whether he will make a statement on the progress of the research being undertaken at Harwell on more efficient utilisation of fuel in power stations by combining the generating of electricity with the sale of heat.

The combined generation of electricity and heat from power stations is primarily the responsibility of the electricity supply industry and no practical research is being undertaken at present at Harwell. However, some assessment work is being done by the Energy Technology Support Unit and by the Programmes Analysis Unit. Both units are stationed at Harwell.

When will the Department of Energy accept some responsibility and take the initiative in doing what is happening and has been happening for many years in other countries in Europe —that is, utilising waste heat for industry and domestic heating? How can it be satisfactory for the Minister continually to say in the House that this is not his responsibility but that of the Central Electricity Generating Board?

The hon. Gentleman is a bit out of date, and he should know better. A group on combined heat and power has been set up under the chairmanship of Dr. Marshall, the Chief Scientist. The group will consider the economic rôle of combined heat and power and identify obstacles to the fulfilment of that rôle. The group will report initially to the advisory council. I hope that the hon. Gentleman will agree that he was a bit too quick on the gun.

Oil Developments (Fife)

13.

asked the Secretary of State for Energy what oil developments are currently being undertaken in Fife; what is their total value; and how many jobs they are providing.

There are at present several firms in Fife wholly engaged on work associated with the United Kingdom offshore market. A total of 1,610 jobs is currently being provided by these firms, the largest of which are Redpath Dorman Long (North Sea) Ltd. and Burntisland Engineers and Fabricators Ltd., which are engaged on oil platform construction and module fabrication respectively. No figures relating to the total value of the developments are available.

I thank my hon. Friend for his reply, but does he not agree that a large part of the success is due to the initiative of the Fife County Council in alerting firms, small and large, in Fife to the opportunities available to them in the North Sea for sophisticated and less sophisticated services and equipment? In view of the imminent reorganisation of local government, will my hon. Friend ensure that the new regions and districts will set up similiar machinery to alert the industries in their areas to the opportunities available to them?

I am happy to agree with what my hon. Friend has said about the activities of the Fife County Council and, hopefully, the future Fife Regional Council. I am sure that many other local authorities could fruitfully follow their example of encouraging the participation of industry in the oil industry and elsewhere.

Conservation And Competition

14.

asked the Secretary of State for Energy what discussions he has had with the gas, electricity, coal and oil industries recently with a view to conserving energy and avoiding wasteful competition.

My officials are in close touch with those of the fuel industries with the objective of co-ordinating their energy-saving publicity. The advertising of the fuel industries now has a substantial energy-saving content. The industries already make available to their customers substantial advisory services on how their fuels can best be used.

The House will welcome the action taken by my right hon. Friend and his Department to save energy. but does he agree that much more co-ordination is needed on distribution between the various energy industries? Could there not be joint gas and electricity showrooms? Could not savings be effected in collecting from and reading gas and electricity meters? That is the sort of thing we expect now that the industries are socially owned.

I know that my hon. Friend is very interested in this question which he has raised before in the House. I am having the matter considered to see whether benefits can arise and in due course I shall report the conclusions to the House.

Will the right hon. Gentleman have another look at this matter? Will he remove the distortions from the gas market and ensure that there is a realistic price for gas?

If I understand the hon. Gentleman correctly, he is saying that gas prices should go up. Many people in the country will note that a leading Conservative Member is advocating an increase in fuel prices.

Will my right hon. Friend pay particular attention to the latter part of the Question, which asks for the avoidance of wasteful competition, and look into the question of what it costs the gas and electricity industries to offer free samples, and so on, in showrooms? Will he endeavour to cut out such waste and adopt a true energy policy for advertising as well as for the production of energy resources?

I certainly want the energy industries and publicly owned energy industries to be realistic. There is a later Question on the Order Paper about free gifts. However, I should be loth, as I am sure my hon. Friend would be, to advocate that the showrooms of the gas and electricity boards should be closed. The showrooms are very profitable sectors of the industry.

Electricity Boards (Sales Promotions)

15.

asked the Secretary of State for Energy how many electricity authorities offer transistor radios in commercial promotions; and at what total cost.

I am informed that since the beginning of 1974 three boards have done so. The total cost of the radios was£19,500.

Does the hon. Gentleman agree that this is yet another example of wasteful competition in a basically non-competitive industry. Would not the money be much better spent in performing some of the energy saving activities suggested today by hon. Members? Does the hon. Gentleman recognise that this matter must be considered in the context of savage increases in electricity prices to the consumer? Surely the Department is fiddling while the consumer burns.

The hon. Gentleman is not correct. The boards have a statutory right to sell and install products. How they should promote them is a matter for their commercial judgment. Why should publicly owned industries be treated differently from private industries which have such promotional aids? The boards are perfectly entitled to do this, but it is a matter for their commercial judgment.

Oil Licences (Fifth Round)

17.

asked the Secretary of State for Energy when the next round of offshore licences will be held.

Will the hon. Gentleman recognise that delay in setting up exploration of the Western Approaches of England is causing suspicion to arise in Scotland that the Government's policy is to exhaust Scottish oil resources while keeping England's oil resources, such as they may be, in retention? Does he realise that if oil is discovered off the Western Approaches, as the French seem to suggest it will be by expressing their intention to go ahead at an early date, it will enable England to get off Scotland's back as soon as possible?

I do not believe that that is a suspicion that arises in Scotland. It is nonsense which is deliberately perpetrated by the hon. Gentleman and his hon. Friends. It is a complete distortion of the picture. The Government's view is that all Britain's energy resources, be they oil, coal, gas or nuclear power, should be used for the benefit of the whole of the United Kingdom. The South-Western Approaches are hopeful territory for oil exploration. As evidence of the Government's good intentions, we are pressing ahead as fast as possible with the French to determine the median line.

Has my hon. Friend's attention been drawn to the remarks made by the right hon. Member for Orkney and Shetland (Mr. Grimond) during the weekend to the effect that Orkney and Shetland will claim the oil off those islands and that there will be very little left for Scotland? Will my hon. Friend give an assurance—and ask the Scottish National Party to give an assurance—that in no circumstances will Orkney and Shetland be allowed to collar that oil?

I do not think it will be possible for the hon. Member for Dundee, East (Mr. Wilson) to give that assurance, because during the last election campaign he promised dominion or federal status to Orkney and Shetland. If that were granted, the prolific east-of-Shetland oilfields would adhere to Shetland and Orkney. This is taking to its logical conclusion the procedure of the geographical allocation of energy resources advocated by those who aspire to Scotland's oil. [Interruption.] I am talking not of hopes but of the published words spoken by members of the Scottish National Party in the last election. They may have been meant to fool the people of Orkney and Shetland, but they were said.

If there is a new round of licensing, will the hon. Gentleman give an undertaking to observe the sanctity of contracts and not tear up the new concessions as he is threatening to do with the old?

I give the hon. Gentleman the absolute assurance that there will not be a sell-out as there was in the fourth round of licensing. We look forward confidently to the next round of licensing. We shall approach it unencumbered by the mistakes made by the previous administration, who were roundly criticised by the all-party Public Accounts Committee. We shall be able to achieve at least a 51 per cent. State participation in all licences allocated in the next round.

Wales

Agricultural Land Prices

18.

asked the Secretary of State for Wales what was the average price of agricultural land in Wales during the six months ended 30th September 1974 and 31st March 1975, or the most recent period for which the information is available.

The average price of all sales of agricultural land in Wales notified to the Inland Revenue during the six months ended 30th September 1974 was £402 an acre. The corresponding figure for the three months ended 31st December 1974 was £338 an acre. Information for the six months ended 31st March 1975 is not yet available.

Does the Minister agree that prices, although showing some fluctuations, are still very high, and disgracefully high for young farmers going into agriculture? Will he give a commitment that the Government will honour their pledge to bring in for Wales legislation similar to that which was enacted for Scotland five or six years ago to protect the tenant farmer who succeeds to the tenancy on the death or retirement of his father?

Land prices are going down—and we hope that that trend will continue—although prices still remain high. The broader question of tenant farmers and their rights is under consideration.

Will my hon. Friend ensure that this agricultural land is retained for agricultural purposes and that the derelict land in South Wales which is being reclaimed will be used for industrial development?

The reclamation of much of our derelict land is for industrial purposes and for housing. That enables us not to encroach on agricultural land.

Industry

European Community Employmentstudies

19.

asked the Secretary of State for Industry if he will now 'reopen discussions with the EEC on studies concerning employment problems in South Wales and redundancies in the steel industry.

I expect that discussion of two studies—a British Steel Corporation project relating to steel redundancies and a Department of Employment sponsored project on the impact of moving a Government office to South Wales—will proceed with the Community. A study of the employment problems of South Wales will not be submitted to the EEC for joint sponsorship, and we do not intend reopening discussions of that case.

Why has there been no discussion since spring last year? Will the Minister assure the House that the people of South Wales, in particular the steel workers of Ebbw Vale, will not suffer as the result of the Government's failure to conduct these discussions?

The steel workers to whom the hon. Gentleman refers will gain from the fact that my right hon. Friend took the decision that the best way to undertake research of this kind was to enable the Welsh TUC to make up its mind whether the project was being undertaken in the way in which it wanted. That is why, on 5th August last year, my right hon. Friend wrote to the Secretary of the Welsh TUC asking for the TUC's views. As a result, the work is being discussed with officials of my Department with a view to its going ahead under the sponsorship of Ruskin College, Oxford.

Will my hon. Friend confirm that for every ton of steel we export to Europe 17 tons come into the country? Does not that suggest that the Common Market strategy of the British Steel Corporation is a disaster for our steel workers, who are likely to be made redundant and put on short-time working? Is there not an urgent necessity for a full-scale debate on the future of the British steel industry?

I cannot confirm without reference back the figures of the import-export balance mentioned by my hon. Friend. The steel industry, perhaps of all industries, found it hardest to recover from the effects of the three-day week as well as from other difficulties last year. I note particularly what my hon. Friend said about the need to examine the future of the steel industry in the light of the European Community.

Overseas Development

European Community Developmentcouncil

24.

asked the Minister of Overseas Development if she will make a statement about her latest meeting with the Development Ministers of the EEC.

31.

asked the Minister of Overseas Development when she next proposes to meet the other Development Ministers of the EEC.

The Development Council last met on 22nd January and I reported to the House on that meeting on 28th January. A further Council meeting was to have taken place on 20th March but it was cancelled. The date for the next meeting has now been tentatively set for 13th May, but this has to be confirmed.

Does the right hon. Lady recall that when she reported to the House on 3rd February on the terms of the Lome Convention between the EEC and 46 developing countries she described the convention as historic and said that we could not have achieved such a good agreement from the point of view of the developing countries if Britain had not been a member of the EEC? As no Commonwealth country wishes us to leave the Community, does not the right hon. Lady think that the developing members of the Commonwealth in particular will regard with dismay and incredulity her stand on membership of the Community?

There is a later Question on the Order Paper about implementation of the Lomé Convention. I have little to add to my earlier statement to which the hon. Gentleman referred. He will have noted the last paragraph of that statement.

Why is the right hon. Lady in her attitude towards the Community trying to destroy her own handiwork in the Lomé Convention and throw the Commonwealth back into confusion? Is she not going back on everything to which she has so steadfastly set her hand during the past year?

I am grateful for the hon. Gentleman's comments. I ask him to study precisely what I said in the House in my statements on this subject. I regard the Lomé Convention as an extremely good achievement for the one-quarter of the Commonwealth countries which are associated with the Community.

Will my right hon. Friend accept that the majority of Government supporters congratulate her on her forthright statement in which she made it abundantly clear that, notwithstanding the many efforts that she had made in negotiations with the Common Market on the Lomé Convention and on other matters, she had not been as successful as she wished?

The essential point, which I have made clear in a previous statement to the House, is that the Lomé Convention concerned a number of Commonwealth countries. By that convention we were able successfully to protect their interests. Nevertheless that left out of account, as I said quite clearly to the House in my statement in January, the interests of those Commonwealth countries of Asia which are not associated and are therefore not involved in the Lomé Convention.

While we recognise the right hon. Lady's difficulty in separating her personal views from those which she is required to hold as a member of the Government, may I ask whether she agrees that among the most valuable things that have happened in recent years to underdeveloped nations, particularly those of the Commonwealth, are the series of agreements providing free access for their commodities and the substantial capital aid agreements that have been made in the Community? How can she personally have negotiated these matters and put her signature to them knowing privately all the time that she was about to campaign in favour of this country having nothing to do with them?

I must ask hon. Gentlemen to study more carefully than they seem to have done what I said to the House on these matters. I have made it clear throughout that the Lomé Convention represented our efforts to protect as far as we could—I think we have done so successfully—the interests of those Commonwealth countries associated with the Community. I have made it equally clear that one of the major objectives of our renegotiations was to seek to protect the interests, both in aid and in trade, of the Commonwealth countries outside association, which means primarily the Indian subcontinent. I can only refer to what I have already told the House.

Mozambique, Angola Andguinea-Bissau

26.

asked the Minister of Overseas Development if she will make a statement on British aid to Mozambique, Angola and Guinea-Bissau.

30.

asked the Minister of Overseas Development if she will make a statement on British aid to Mozambique and Angola.

I hope to begin an aid programme for these countries as soon as possible. I have already made contact with the authorities concerned in Guinea-Bissau and Mozambique. I envisage that these should be followed by visits to the countries by my officials.

We have already provided some emergency help to Mozambique in co-operation with UNICEF in airlifting medical supplies and blankets for the flooded areas in the Limpopo Valley. £10,000 has also been contributed to UNDRO towards the cost of seeds from Tanzania to replace damaged crops.

While thanking my right hon. Friend for her excellent reply, may I also draw her attention to the need for long-term aid for these countries now that they are reaching independence? Does she agree that the United Kingdom has a specially important role to play in these other countries, particularly in teaching, because if these developing countries are to play their full part in the African continent and in African affairs there will be a premium on their ability to communicate with their English-peaking neighbours?

What I hope will shortly happen is that my officials will be able to discuss in Mozambique and Guinea-Bissau what would be the best formulation of a long-term aid programme for them. I am sure that it will need to include a good deal of technical assistance. Language teaching may well prove to be one of the most valuable ways in which we can help.

Will my right hon. Friend keep in mind the fact that Mozambique and Angola have been used by the illegal Rhodesian regime for sea and rail transport and that there will be a loss to these countries as they move to independence if they support our Government's action in seeking to bring an end to the Rhodesian regime? Will she, with the United Nations, help these countries because this might bring nearer the end of the illegal Rhodesian régime?

This is one of the factors that comes into the picture. We have primarily to understand that Mozambique is one of the poorest countries in Africa. It has few resources. Angola has slightly more resources, so we may have to differentiate a little between the two. Mozambique is certainly in the most urgent need of all the aid we can provide.

Commonwealth Rural Development

27.

asked the Minister of Overseas Development if she will make a statement concerning the Commonwealth conference on rural development.

32.

asked the Minister of Overseas Development whether she will make a statement on the Commonwealth rural development conference.

The Commonwealth ministerial meeting on food production and rural development was held in London from 4th to 12th March. The meeting elected me as chairman. The most rewarding outcome, from my point of view, was the solidarity of conviction amongst Ministers present that the improvement of living conditions and productivity in the rural areas of the developing Commonwealth should be a prime objective of the national Governments directly concerned and the aid-giving members of the Commonwealth. Our detailed conclusions are to be found in the report of the meeting of which a copy is available in the Library of the House.

The House will wish to know that my Ministry now has a new Rural Development Department.

In thanking my right hon. Friend for her statement, may I congratulate her on raising the issue of the conference and having been chairman of what is the most practical conference on aid? Can she tell me a little more about her division and whether the Commonwealth is likely to pay greater attention to this matter, particularly through the Commonwealth Secretariat?

The Commonwealth Secretariat was asked to debate some new initiatives and in particular to increase its advisory and training role through the Commonwealth Fund for Technical Cooperation. It is now proposing to set up a new division concerned with rural development. Within the Ministry I have felt that it was essential to have a Rural Development Department to co-operate with those desks in my Ministry concerned with particular countries so that we can achieve a much more positive promotion of the many aspects of rural development which range wide—from water and power supplies to land reform and a number of other issues. We can more successfully achieve an expansion of Ministry work in rural development by having this department.

Will the right hon. Lady say when she expects further conferences to be held and how far they will be linked up to make a continuing series?

The Commonwealth Ministers did not ask that there should be a continuing series. They proposed, almost unanimously, that there should be a further and similar meeting before too long. They also asked that their conference report should be included high on the agenda for the meeting of Commonwealth Heads of Government in Jamaica.

Does my right hon. Friend agree that there is one feature common to all the African States irrespective of political complexion, namely, that the people in the bush are foot-loose and are on the move to the towns, where they are living in fearful shanty conditions? Is it not important to keep people on the land? Would not the best thing we could do be to enable expert bodies to go out and give technical information and advice, since we are the one nation that has administered these territories in the past and knows what the game is all about?

I agree that one of the great problems is the drift from the rural areas to the towns. Nevertheless we have to be clear that 70 per cent. to 80 per cent. of the world's poor population is trying to scrape a living from the land. It is help for the development of rural economies and increased food production that can be of the greatest benefit. That is where I hope we can direct more research.

Overseas Students

29.

asked the Minister of Overseas Development whether action will be taken by her Department to help students from developing countries studying in the United Kingdom to pay the increased tuition fees in universities and colleges recently announced by the Secretary of State for Education and Science.

The Parliamentary Secretary to the Ministry of Overseas Development
(Mr. John Grant)

As my right hon. Friend the Secretary of State for Education and Science said in a Written Answer on 18th March, my Department will pay the increased fee in respect of those students whom we assist as part of the aid programme, including those who secure awards under the Overseas Students Fees Awards Scheme.

Will there be any possibility of helping students from developing countries who are currently being assisted under the scheme mentioned by my hon. Friend?

While the scheme is under review it is intended to allow for some increase in the numbers assisted under it. An increase in tuition fees is, in any case, only a small proportion of the cost to an overseas student of a course of study in the United Kingdom. We would expect the financial sponsors of such students to be able to meet the comparatively small extra cost involved. We will make a statement shortly about the revision of the Overseas Students Fees Awards Scheme.

Is my hon. Friend aware that there is some apprehension over the fact that there seems to be developing a form of technical and scientific brain-drain which invoves capable people from the subcontinent coming to this country and some other parts of Europe to earn a living? Is not this something to which my hon. Friend should turn his mind to see whether these people can be helped to make short stays in this country and then return to the subcontinent, where they are urgently needed, to make a major contribution?

I think that there is a serious problem for all the developing countries concerned. My hon. Friend is right to draw attention to it. The real answer to the situation lies with the developing countries themselves. It is for them to take steps.

Industrial And Provident Societies Bill Lords

Ordered,

That the Industrial and Provident Societies Bill [ Lords] be referred to a Second Reading Committee.—[ Mr. John Ellis.]

Regional Aid

On a point of order, Mr. Speaker. On Wednesday 26th March in business questions my right hon. Friend the Lord President said in answer to me in column 483 that he expected to take today a take-note motion on Commission Documents together with the approval of the White Paper which is about to be moved. There has been a lot of confusion and difficulty over late-night EEC motions. I understand that the Commission Documents are concerned with regional policy, although that is not made clear on the Order Paper. They are matters which I think the House would wish to debate separately and properly. I understand that the Scrutiny Committee has seen the documents but its report is not yet printed. In making this objection I hope that the Government will not move the Commission Documents motion this afternoon.

The two motions cannot be taken together if an hon. Member objects. The subject matter of the document mentioned in the second motion is, of course, relevant to the general debate of the day and reference to it can be made.

European Community(Membership)

3.32 p.m.

I beg to move,

That this House approves the recommendation of Her Majesty's Government to continue Britain's Membership of the Community as set out in the White Paper on the Membership of the European Community (Command No. 5999).
In this debate the House is called upon to assess the outcome of the renegotiations of the terms of British entry into the European Community and the wider issues involved in the decision whether to remain in the Community or to leave it. After the debate ends on Wednesday the issue rests with the country in a free vote through the ballot box.

Of course, for many hon. Members, as for millions outside the House, the issue is not limited to an assessment of the outcome of the renegotiations. Many here, and still more outside, have already made up their minds on what are to them still more fundamental issues. Many made up their minds years ago, when the EEC first became an issue in the House, in the abortive 1961–63 negotiations. Some had firmly fixed apparently irrevocable views as far back as the Messina Conference and the negotiation of the Treaty of Rome in the 1950s. There are hon. Members and others who regret that Britain was not involved at the time of Messina.

There will be a substantial body of opinion here and outside who believe on almost doctrinal grounds that Britain should be in the Community for the greater economic good of Britain in a changing world and for the assertion of a greater economic and, indeed, political power for Europe in a deeply divided world. For some the political arguments transcend even the most important economic considerations of industry, trade and unemployment.

Equally there is a substantial body of opinion which is fundamentally opposed to British membership and which holds that no possible renegotiations could have changed the nature of the Community sufficiently to enable it to support British participation. And for it, too, the issues are both economic and political, not least in those areas of our national life where it feels that power affecting industry and employment has passed to and will remain with a multinational organisation whose very decisions seem to it fatally to abrogate the control of this House on our own destinies and to subvert the independence of the British legal and judicial system.

Mr. Roy Hughes (Newport) rose—

Perhaps a little later my hon. Friend may have a point to make. At the moment I am expressing —I hope I am doing so fairly—the views that are held strongly by two groups of opinion. All the arguments that I have mentioned will be heard in this debate and in the wider debate in the country, for in taking up this position hon. Members reflect a widespread feeling throughout Britain, a feeling which cuts across parties and across existing industrial, social, political and even religious loyalties.

There is also a large body of opinion which is less doctrinally committed and which will assess the case for or against remaining in the Market by the result of the renegotiations, summarised in the House in my statement of 18th March and issued as a White Paper, Command 5999, and in the full White Paper, the Report on Renegotiation, Command 6003, which sets out in detail the outcome of the renegotiations and the broader issues which caused the Government to reach the decision which I announced three weeks ago.

This less committed group will seek to assess how far the renegotiations have fulfilled the objectives set out in the manifesto put before the electorate in the election of February 1974, and again submitted to the people in the October election—how far in those areas where, as I made clear on 18th March, we have not secured the objectives we there set out—I am being perfectly fair about this —for example in the fundamental alterations we called for in CAP—but how far also the changes that have been secured are adequate to meet the purpose of the manifesto objectives.

Even for this relatively uncommitted group there are other considerations which must be taken into account. First, how far has the Market itself changed? How far has it changed partly as a result of the renegotiations? Some changes in the working, though not in the statutory form, of the Community were already occurring before my right hon. Friend opened the renegotiations last April. Changes there undoubtedly would have been had there been no negotiations.

Had Britain never entered the Community, or had Britain been able to accept the terms negotiated in 1971, I believe that other members would still by this time have been calling, as, for example, the Federal German Chancellor has so forcefully called, for a fundamental stocktaking of the working of the CAP in the light of recent experience—for example, the ludicrous piling up of beef and butter mountains and the national budget burdens involved in paying for the cost of agriculture in the Community. That, I think, would have happened. But certainly in this case, as in other areas of the Community's activities, change has been significantly furthered by the fact of renegotiation.

My right hon. Friend and I can claim that the renegotiation process has been not only a catalyst of change—and basically change in the right direction—but also an initiator, a creator of a process of fundamental change. The past year's negotiations have involved, and not only for us in these islands, an occasion for fundamental reassessment of Britain's position in relation to the Community. They have started a scarcely less fundamental process of re-examination by other member Governments, particularly the six founding members, of their own individual national position in relation to the Community and in relation to the present posture and future direction of development of the Community itself.

I do not think it could be said that that was true of the negotiations of 196163 which were ended by President de Gaulle's veto, nor, though important new areas of discussion were opened up by us, in the attempts to start entry negotiations between 1967 and 1970, such as the right to import Commonwealth agriculture produce, nor can it be said with any truth that these were successfully pressed in the 1970–72 negotiations. Basically, the Community, on the day of British entry on January 1973, was hardly different from what it had been as a Community three years earlier apart from the consequential changes of widening the membership—for example, the appointment of new national Commissioners and such measures as the negotiation of the treaty with those EFTA countries which remained outside.

Many hon. Members, and the wider electorate, will ask themselves whether we should judge the issue on the form and statutory basis of the Community, as set out in the founding treaties, together with all the machinery and the supranational entrenched powers of the Commission, which they can fairly argue have not been changed by the renegotiations. For this reason, in the Foreign Secretary's statement to the Community last April, published as a White Paper, it was made clear that we were not seeking changes in the founding treaties or the Treaty of Accession. That decision was explained to the House and to the country well before the last election—an election in which our renegotiation programme was endorsed. We did, however, reserve the right to propose treaty changes if that became necessary, and we have given notice of the need in certain circumstances to do so on certain issues of importance to us.

That is one approach—namely, to set the undoubted treaty-created powers and constitution as the main criterion for judging the Community and Britain's relations with it. The other approach is to judge the Community as an organic practical working institution where month by month decisions are taken by national representatives in the Council of Ministers and in the now regular Heads of Government summit meetings to give weight to the reality of a procedure where national interests are more powerfully asserted and the spirit of give and take governs the discussions and inspires clear decisions and directives.

In recent months—three weeks ago in the House I referred to the importance of President Giscard d'Estaing's institution of regular routine summits—we have seen this process increasingly at work, not only on renegotiation issues but also in the continuing—or what it is now fashionable to call, I am sorry to say, the "ongoing"—work of the Community at its different levels. This is an extremely important consideration in forming a proper judgment.

Before I come to the outcome of the negotiations, there is one general point which I must make. The world in which we live has been transformed in the past two years—by the energy crisis, by the oil surcharge on our costs and prices structure and by the resulting imbalance in world monetary flows and stocks. Committed pro-Marketeers, committed anti-Marketeers, but no less the large body of uncommitted middle opinion, will all be relating their Market assessment now to this central fact of the world in which we live—the grave national economic situation, and the equally grave storms which have hit the world economy.

Whatever our approach, the House and country will be ready to acknowledge that the words of the manifesto—and those exact words were first approved by the Labour Party conference in 1972 —are relevant—indeed prophetically relevant—to the world economic situation. In an important reference to the EMU, the proposed Economic and Monetary Union to which I shall refer later, we said as long ago as 1972,
"The monetary problems of the European countries can be resolved only in a world-wide framework."
That is precisely what we are seeking to do.

The House has had reports from my right hon. Friends the Chancellor of the Exchequer, the Foreign and Commonwealth Secretary and the Secretary of State for Energy on their missions abroad —in the European context certainly, but mainly in a world-wide setting, with the IMF facility having been renewed on the initiative of the Chancellor of the Exchequer, and now with the OECD financial support fund—the so-called Kissinger trust fund—due to be formally established on Wednesday, when the signing takes place.

On energy matters, we have had discussions within the Nine but all have agreed as our world trading partners have agreed—that these problems, oil particularly, must similarly be approached on a wide international scale. This also relates to commodities, where the Lomé Convention was part of a remarkable achievement. We have created a commodity earnings stabilisation scheme, mainly for developing countries. We shall build further on that action when the Commonwealth Heads of Government meeting takes place in Jamaica later this month. We shall discuss our initiative —the Government's initiative—which we have already discussed with the United States, Canada and the Community. Our proposals were set out in my Leeds speech, on which I have answered Questions in this House.

Against that background—a European, a national and a world background—I come briefly to the achievements of the renegotiations. I say "briefly" because I made a fairly full statement to the House last month, and because the White Paper, Command 6003, sets out the outcome in very great detail.

On the first objective set out in the manifesto—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—I have already reminded the House of the statement made by my right hon. Friend the Minister of Agriculture giving precision to these changes in his statement to the Council of Ministers on 18th June last year, on which he reported to the House the following day.

That statement set out six points against which in this debate hon. Members will be able to assess the degree of success which he achieved. These points included firm criteria on pricing policy; a greater flexibility for dealing with special situations in different countries; measures to discourage surpluses and to give priority to Community consumers in the dispersal of any surpluses arising; improvements in market projections, for example with a view to avoiding surpluses; better financial control, and better access to important foodstuffs from outside the Community, with particular regard to the interests of Commonwealth producers and of the consumer.

These were the objectives which we set ourselves. I do not need to go over the outcome of all these issues as they were set out inHansardin columns 1457–59 in my statement on 18th March. We have not got all we wanted—

Mr. Michael English (Nottingham. West) rose—

I am making my hon. Friend's point for him. We have not changed the fundamental character of the CAP but, as I have said, following the initiative by the German Federal Chancellor, which, we strongly supported, a root and branch stocktaking of the CAP is now taking place.

More than that, we have secured far-reaching changes, not in the doctrine or theology of the CAP, but in its practical operation to meet the requirements of our own agriculture and of Commonwealth food exports. We have secured a new beef régime; a more realistic pricing policy; action to deter the build up of surpluses; action already taken to ensure that where surpluses have developed the food should be sold as far as possible to our own peoples, at below cost prices, rather than exported to Russia or third countries; the Commonwealth sugar deal; the Lomé Convention opening up privileged Market access to 46 countries, 22 of them Commonwealth countries; the commodity earnings stabilisation scheme I have just mentioned, to help developing countries, and the agreement on New Zealand butter, together with the reopening of the New Zealand cheese import option. These are, in my view, significant achievements which make a reality of the manifesto objective.

On the objective relating to the Community budget, again we have not secured a fundamental change in the "own resources" system of the Community— [HON. MEMBERS: "What about the money?"] I shall be coming to the money. The corrective mechanism proposals which I reported to the House are up to £125 million. Those proposals are set out in greater detail in the Command Paper and, in the Government's view they meet, though by another route, the objective set out in our manifesto.

I come to the third objective.

The Prime Minister has referred repeatedly to the £125 million rebate. Could he give any idea of estimates which he or the Government have made of the contribution which Britain would have to make to trigger off a rebate of that amount?

It is on the basis of the 1971 agreement—an agreement which I appreciate the hon. Gentleman at that time did not support. On that basis there are certain payments to make in respect of the 1 per cent. VAT contribution in regard to duties and levies. That is offset to the tune of £125 million —[Interruption.] I spelt it all out inHansardin my statement. It is too complicated to bring into my remarks at this stage. That is the basis on which the figure is calculated, and I am sure hon. Members will find time to study the statement.

On the third objective—the rejection of any kind of international agreement compelling us in regard to EMU to accept increased unemployment for the sake of maintaining a fixed parity and our commitment that monetary problems should be resolved in a world-wide framework—I believe that in practical terms we have secured the objective we had in mind.

Economic and monetary union—EMU —is not a feasible proposition for as many years ahead as we can see. I have quotedThe Economistwhich said that while it is not as extinct as the dodo, it is now an endangered species. What we feared, when we expressed those anxieties in the manifesto about Britain being required to maintain a fixed exchange parity which would threaten increased unemployment, is not on.

To proceed to another manifesto objective, serious debate will undoubtedly take place in this debate and throughout the campaign on that area of renegotiation which related to control over regional policies, and industrial policies, particularly those concerning steel. Everyone can form his own judgment on this. Many people on both sides formed their judgment on this matter long before the terms were known. But we have secured a fundamental renegotiation on our right, and that of other countries to pursue the regional policies best suited to national requirements.

Quite apart from the Common Market regional fund, which will be of benefit to Britain, particularly Scotland and Wales, we have secured arrangements which will enable us to go on operating our own system of national aids as seems best to us. We have also secured arrangements which will enable us to take quick emergency action when employment is threatened. Our criteria, which have been accepted by the Commission, lay down that action designed to deal with migration from an area enjoys as high a priority as action to prevent a sudden increase in unemployment. Our assertion has been accepted—it is our view, and it has been accepted—that in these matters national Governments are the best judges of what is right for their own countries.

There is a problem about steel, which has been highlighted in the case of the Newport mini-mill. The fact is that there are no powers to control private investment in the steel industry. If, as part of economic management and control over national resources, the Government—any Government in this country—are to hold back the level of new investment in the public steel sector, it is of course unacceptable that the private sector should be free to expand where it wants and by as much as it wants. [HON. MEMBERS: "Why?"] I will tell hon. Members why. If we hold back the public steel sector through lack of resources, this will not only add to the inflationary pressure on resources but be provocative in the local and regional setting at a time when production plants have been closed because of technological change.

The Prime Minister referred to Newport. In view of the conflicting opinions on this vital issue of Common Market membership, which he illustrated in the early part if his speech, will the Prime Minister tell the House whether the dissenting Cabinet Ministers will be allowed to participate in this debate?

I gave way to my hon. Friend the Member for Newport (Mr. Hughes) because when I referred to his constituency I thought that he would be concerned about his constituents.

The fact is that there are no powers to control private investment in the steel industry. Powers of control existed under Section 15 of the Steel Act. Unfortunately, that section was repealed after the 1971 negotiations by the previous Government. There is, therefore, no control, even, for example, in the case of the Newport mill which, when the issue blew up a few weeks ago, did not involve a British firm or even a firm owned by nationals of Community countries. We had no power to control it because of the repeal of the Section 15.

Nor has the Community any power in this matter. This is a vacuum. Clearly, powers are needed. I referred to this matter earlier. It was in this context that my right hon. Friend at the March Council of Ministers meeting gave contingent notice of a proposal for treaty revision.

This is a problem facing a number of Community countries. They have been able to deal with this and associated questions by administrative means, without having to ask for an amendment to the treaty. I told the other Heads of Government in Dublin that we would carefully study the various methods used in other member countries. I said that by informal controls, planning controls, IDC controls, or other means, including such measures as they are using, we intended to have the powers that are needed in this matter. Failing this, it would be a question of treaty revision.

But I repeat that there is nothing in the founding treaties, or in practices or policies under the treaties, which precludes us, or could preclude us, from extending nationalisation of the present private sector in the steel industry—or, indeed, would prevent us from taking the whole of the residual private sector into public ownership if the Government and the House thought that that was right.

There is a proper anxiety, reflected in the manifesto, and underlying our approach in the renegotiations, about what is regarded as the danger of Community interference in matters of economic management. I have referred to the outcome of the renegotiations on regional policy, industrial policy, steel, and the inherent right, under the treaty, of this or any other member country to extend the borders of public ownership in industry. My right hon. Friend's negotiations have clarified and improved the position as to the rights and freedom to which we can lay claim in our national actions under the authority of Parliament.

But of course on these issues—industrial, regional, steel and the rest—there is not, as I have sometimes seen suggested, a soft and easy option outside the Community. Our friends, our former EFTA partners who have remained outside the Community but in association with it, have found that the EFTA-EEC agreements have required their assent, as a condition of those EFTA-EEC agreements, to precisely similar requirements, as a condition of trade agreements, as are in force within the Community itself, namely, and principally, measures to prevent the frustration of international competition by regional subsidies or other means. And of course it is self-evident that while Britain, within the Community, has the ability to negotiate changes in these requirements—and we have negotiated derogations from them so far as we are concerned—the EFTA countries have no part, nolocus,in such negotiations.

Indeed, it is right to remind the House that in the 1960s, as I remember, and as the House will remember, our own EFTA membership then was attended by rigid limitations on our industrial and commercial system wherever our partners felt that our own national policies frustrated competition within EFTA, for example by subsidies, open or disguised, as they would have put it. The House will not, I think, forget the problems we faced and, indeed, the almost fatal rift which developed in EFFTA over the Labour Government's decision to establish the three aluminium smelters in England, Wales and Scotland, on the basis of what other EFTA countries regarded as subsidisation through investment grants. We were tied then, and tied very rigidly indeed. Nor for that matter will the House forget—I certainly shall not—the strong reaction from EFTA when we imposed import surcharges in 1964 and import deposits in 1968, policies which I know some of my hon. Friends are calling on us to use today.

The financial objectives in the manifesto went on to call for
"No harmonisation of Value Added Tax which would require us to tax necessities."
Even the proposals which are now being discussed in the Community about a uniform assessment base for VAT provide for our system of zero rating. Should there be any proposals whatsoever which are unacceptable to us, we shall be able to resist them. Contrary to the situation three years ago, when the manifesto objectives were first drafted, in 1972, the VAT harmonisation threat which we then feared is no longer a real one. Indeed, so far from harmonising, a number of countries are insisting on increasing the number and diversification of VAT rates in their own domestic tax structures. So I tell the House that there is no danger here to our freedom at all.

Can the Prime Minister assure the House that his right hon. Friend the Chancellor of the Exchequer will not harmonise on VAT in his Budget?

I cannot anticipate my right hon. Friend's Budget Statement, but I have said that we do not regard as serious the pressure for harmonisation and if there is anything unacceptable to us in the forthcoming or any other Community Budget, none of which I should care to make any forecast about, we shall have the power to resist and to stand up for what we feel is right.

I conclude my report of a year of renegotiations with this assessment: in the Government's view, we have substantially achieved the objectives set out first in 1972 and endorsed by the Labour Party in successive years since then up to and including the publication of the 1974 manifestos.

Secondly, the nature of the Community has changed, is changing and will change further. It is changing in a way which has greatly reduced at any rate my own anxieties about the power of supranational institutions established by the treaty and not responsible to political control by Ministers representing national interests. More and more the Council of Ministers and the Heads of Government conferences are dealing specifically with problems on the basis of the highest common interest, and my experience, and what I have seen, as has my right hon. Friend, has been a total readiness of the Commission to come into line with political realities as expressed at the Council of Ministers and Heads of Government conferences.

I know there is a feeling, which is very widely shared, that the Commission is over-large, over-bureaucratic, over-staffed and over-expensive. This is not just the view of the opponents of the European Common Market idea, in this or other countries. It is a view which has become articulate at the highest level in ministerial and particularly Heads of Government discussions. A number of us have made these charges. Changes may follow the CAP stocktaking. I hope they will. One suggestion which I feel should be seriously considered—and indeed this has been raised—is that those four larger countries which are entitled to nominate two commissioners, against one commissioner nominated by each of the others, should each be content with a single commissioner and not have two. While paying tribute to the dedication of commissioners appointed by the member countries, there is a widespread feeling in the Community that there are too many commissioners for the work that has to be done and that this naturally leads to a certain degree of proliferation, duplication and the creation of work for its own sake. In the words of Abraham Lincoln, "Too many horses, not enough oats".

Another conclusion, to which I briefly referred on 18th March, relates to the Commonwealth. I said then that in the whole period that I have been in this House my loyalties have always been much more to the Commonwealth concept than to any European concept. For that reason, I and others who share these loyalties must take account of the fact that now practically the whole Commonwealth—and I have not heard of any dissentients—wants Britain to stay in, in their own national interest.

We cannot ignore that the Commonwealth is now largely self-governing. There will be 34 Heads of Government of independent sovereign countries meeting in Jamaica later this month. So it is a largly self-governing Commonwealth which wants us in. We may regret—I certainly did—that the terms agreed in 1971 virtually constituted an instruction to the Commonwealth to go to seek other markets, and this they have done. They were entitled to do so and they were wise to do so in the circumstances. In many cases, during this period—perhaps this was not widely foreseen by any of us—they have been seeking markets for commodities which suddenly last summer became in extremely short supply and we in Britain, the British consumers, have paid the price for that.

But it is not only their trade relations which have been changed and diversified. Some of our oldest and closest Commonwealth partners—Australia and New Zealand in particular—are now following a course of political reorientation directed much more than in the past to the countries and regions closer to them. In addition, Canada and other Commonwealth countries are seeking closer, indeed formal, relationships with the Community.

In world political terms, I would no more support a little Europe policy than I would support a little England policy. To those of my hon. Friends who fear that in the conditions of 1975 and beyond, membership of the Community means economic autarky and an inward-looking political stance for Europe, who are anxious lest our ties with America or the rest of Europe or the Commonwealth will be weakened, I have this to say: I can claim that our relations with the wider world are better and more constructive today than for some years past. United States leaders have said that our mutual relations are as high as at any time in living memory. The Soviet leadership proclaimed the degree of understanding between us as a result of our February meetings as historic.

I believe that the Commonwealth Conference will show that in the rapidly changing world of the 1970s our relations will be closer than for some years past, not least because of my right hon. Friend's dialogue with African countries at the turn of the year, because of his approach to the Rhodesian problem, and because of our attitude to developments in Chile and in Portugal.

But there is another thought that I want to put before the House.

Before the Prime Minister concludes his peroration and leaves the question of the Commonwealth, perhaps he will allow me to raise one matter with him. He said that the Commonwealth Governments do not want us to leave the Community. Does he mean Governments, or does he mean individuals such as Mr. Whitlam who gave his personal view and not the view of that Commonwealth Government? Can the Prime Minister clear that up?

I mean Governments. I have had representations from members of Governments on behalf of their Governments—not just by Ministers but by Ministers responsible for specialised subjects, Foreign Ministers, and so on. I give the hon. Gentleman the undertaking that if in Jamaica we find that Heads of Governments are not speaking for their Governments I shall make that clear to him.

I am sorry to disappoint the hon. Gentleman, but I was not on my peroration. I just wanted to say that before I embarked upon it.

Can the right hon. Gentleman say why he neglected to renegotiate the common fisheries policy when he was in Dublin? Will he tell the people of Scotland whether he is prepared to allow EEC people to keep on coming in with their boats and scooping up all the fish in our waters?

The hon. Gentleman, who has shown that his knowledge of geography is a little deficient, in that he thinks that the Shetlands are nearer to Aberdeen than to Norway, will be aware that the basis of his question is quite false. The issue that worries him and us—

One cannot be selective. The hon. Gentleman should go out and look at the boats to see where they come from. I am sure he knows that the issue is a question not of the Market, or anything else, but of the Law of the Sea conference. The problem to which he referred covers a considerable number of countries, some of which are in the EEC and some of which are not. Norway has been mentioned. I am sure the hon. Gentleman will be delighted at the great success of my hon. Friend the Under-Secretary of State for Scotland last week. He will be reporting to the House on these matters tomorrow, and no doubt the hon. Gentleman will wish to pursue my hon. Friend more fully on that occasion, but before that I hope he will study an atlas and get a list of EEC members to fit him for it.

The debate this week and the referendum in a few weeks' time revolve around a single issue—whether Britain should remain a member of the Community, or pull out. That is the issue we are debating. Quite apart from what has been achieved in the negotiations, which I have briefly summarised, quite apart from what those of us who have been dealing with the Community at close quarters have felt to be a real change in its nature and operations, the magnitude of the change in world economic conditions since 1971, inevitably unforeseen by most if not all of us, underlines the difference—and there is a difference—between a decision not to enter an organisation when one still has one's traditional ties and contacts, which is what we argued about in 1971, and a decision some years afterwards—whatever some of us thought about the original decision—to pull out. Those are two different decisions.

Like it or not, praise or criticise the 1971 terms—I have never pulled any punches about them—there have been two, three or four years in which history has not stood still. Like the history or not, this is the fact, and I should have had to be a great deal more dissatisfied with the terms which we have secured to be able to ignore that fact of history. Clearly none of us can approach these questions without a full awareness of what the decision will mean for Britain's own economic future. Spokesmen on both sides here may be in danger of making exaggerated claims. There will be those who will record Britain as economically finished if we are not in. There will be those who will predict an equal disaster if we are in.

What I hope is that all campaigners, in what I am sure will be a good-tempered campaign, can avoid exaggerated claims. I hope that during the great national debate no one will be so carried away as to forget for one moment that, in or out of the Community, Britain survives and prospers in direct correlation to our own efforts here in this country, to our domestic policies—good or bad—to the degree of restraint all sections of the community show, particularly in relation to incomes, earned or unearned, which are sought and won, when they are not yet paid for by the gold backing of effort and economic performance. Britain will survive and prosper, too, by a greater degree of industrial harmony and reconciliation and co-operation, by a willingness to accept not only sacrifices in material terms but, what is infinitely harder, the sacrifice of past practices, policies, prejudices and partial affections.

Our problems, in common with those of other countries, developing or advanced, have been vastly aggravated by the world oil crisis. In recent months—I know the Opposition will be delighted at this—our non-oil deficit has been reduced to a fraction of what it was a year or more ago. We need all our resources of national effort and determination to maintain that trend until we are in balance. But we have said, many times, that for the past few months and for the months ahead, the short-term challenge of inflation means dealing with incomes, recognising, as we must, that our long-term vulnerability to this whole problems stems from the failure, under successive Governments, of both parties, to secure industrial investment on a scale anything like adequate to maintain and improve our competitive position in world markets.

To be in the Market does not of itself solve any of these problems. Nor would a policy of withdrawing from the Market. Indeed, in my view, some would be harder to solve outside. Basically, the fault—and therefore the solution—lies not in or outside Europe; what we face is a challenge to Britain, to the British people. Anyone who, in the excitement of the debate here in Parliament or outside, seeks to persuade our fellow countrymen that there is inside or outside the Community, any other way, apart from our own efforts and restraint, is debasing the argument and misleading those whose elected representatives and servants we are.

So my judgment, on an assessment of all that has been achieved and all that has changed, is that to remain in the Community is best for Britain, for Europe, for the Commonwealth, for the Third World and the wider world. All of us, whatever our approach, recognise that this debate and the decision to be taken in June is of a unique and historic character. But during this period, whatever may divide us on Europe, we shall all of us in the House be false to all we believe in if for one moment we fail to proclaim that our survival, our standard of living, the future of our children, the future of our country and its influence in the world all depend in the last resort, on how we respond as a nation to a challenge which is part external, part internal—the challenge to the resolve and resource of the people of Britain.

4.16 p.m.

I am sure that we would all wish to agree with the Prime Minister on two points that he made towards the end of his speech. The first was that this debate should be conducted sensibly and fairly and not with bogus and unfair points or with malice on any side. That is surely what we all owe this country, and I should have thought that it was something that all of us would agree to be important. The second point that the right hon. Gentleman made is that our future is bound to depend upon our own efforts. I hope that he will accept that many of us feel that to withdraw from Europe at this stage would be a self-inflicted wound which would make the attainment of the objectives which he has set out much more difficult and in many cases very hard indeed. That having been said, of course in the end we depend upon our own efforts.

The Prime Minister has decided today to make a detailed and somewhat low-key opening to this debate. He would be the first to agree that one has to take his speech today in conjunction with the White Paper and, as he fairly said, with his full statement on 18th March. It is clear, if one takes all these things together, that, as one, they present a powerful case for Britain staying in Europe. They also make clear in the starkest terms the grave disadvantages to the United Kingdom, to Western Europe and to the world of our withdrawal from the EEC at this time.

No doubt the hon. Member, if he keeps reasonably quiet during other people's speeches, will have an opportunity later to make his own. But he might at least allow others to make their speeches until he makes his own.

The only reason I felt it necessary to intervene from a sedentary position was that at the beginning of his speech the right hon. Gentleman went to great lengths to explain how we should stick to detail, facts and evidence in this debate and not exaggerate; yet within seconds of his issuing that edict he exaggerated the effects of Britain withdrawing from the Market, speaking of creating a "self-inflicted wound". How does he reconcile those two points of view?

Because I do not happen to consider that I am exaggerating in what I am saying.

Of course it is: the hon. Gentleman has stated his opinion and I have stated mine.

At the same time as one gets that clear indication from the White Paper and all the documents concerned, it is ironic that the very strength of the positive arguments provide a powerful justification for my right hon. Friend the Member for Sidcup (Mr. Heath) and the Conservative Government in negotiating Britain's entry in the first place. It also clearly endorses the decision of this House on 28th March 1971, when by a majority of 112 it approved in principle our entry into the EEC on the basis of the arrangements negotiated.

On 28th October 1971.

The more one listens to the right hon. Gentleman now or reads in paragraph 142 of the White Paper the extract from his statement in 1967, the more one is bound to question the whole manoeuvre of renegotiation and referendum.

If I may say so to the right hon. Gentleman, I thought that in referring to renegotiation as a catalyst of change he was, to use a golfing phrase which I am sure he will understand, pressing a bit—and I do not advise that. In doing so, I certainly would not want to underrate the achievements of the right hon. Gentleman the Foreign Secretary or indeed, in his field, the Minister of Agriculture. In fact, they have clearly negotiated skilfully, and, through the assistance and cooperation of our partners in the Community—as no doubt they would recognise—they have gained significant improvements in the Community arrangements from the United Kingdom's point of view. But they were able to do so only because Britain had entered the Community and was a member State.

Then, constantly throughout the White Paper we read of the Community's flexibility, as if this was some new discovery or a complete change of outlook on the part of the member countries. But again, this should have come as no surprise to the Prime Minister and his colleagues, because this attitude was constantly stressed by my right hon. Friend the Member for Sidcup and my right hon. and learned Friend the Member for Hexham (Mr. Rippon) at the time of our entry negotiations. They pointed out then that as a member State Britain would be able to exert her influence successfully in an atmosphere of real partnership. That, surely, is exactly what has been happening.

Perhaps now some of those who contested this view and argued against our membership because of the bureaucratic nature of the Community and its inward looking and restrictive mentality will recognise that my right hon. Friends were right then and that they were wrong.

Therefore, it is clear to me, as we on this side of the House have constantly stressed, that the undoubted improvements in Community arrangements from the United Kingdom's point of view could have been obtained in the course of the Community's normal development and without the whole business of renegotiation under threat of withdrawal. It may be argued that it would have been, or could have been, achieved more quickly by this means than otherwise. But is that possible gain worth all the damage and risks of our present position? When one looks at the other side of the balance sheet, one finds that it really cannot be. Let there be no doubt that the Prime Minister's whole manoeuvre has already damaged our country's reputation in Europe and for the future involves grave dangers for our nation.

The process of renegotiation and, still more, the reasons for it have inevitably cast doubts on Britain's political stability and reliability as a partner. This, in terms of our good name, could be a heavy cost. At best, we have exhausted some of the good will which will be necessary in future discussions, provided we stay in Europe. But that, in itself, is put into doubt with all the damaging uncertainty which follows, by the other part of the manoeuvre—the referendum.

Would the right hon. Gentleman care to make clear to the House whether he is congratulating Her Majesty's Government on the achievement of the renegotiation or whether he is saying it was needless? He has been telling the House how flexible is the European Community, and it seems to me that he is having an each-way bet on the same horse.

I do not think so. In the first instance, I said that through the renegotiations significant improvements had been gained in the Community's arrangements as far as Britain was concerned. I followed that by saying that I believed, as we on this side of the House have constantly stressed, that such improvement could have been gained in the normal development of the Community with Britain exerting her influence as a member State. I do not see that that is backing a horse both ways.— [Interruption] That was what the hon. Gentleman put to me. I do not mind backing a horse both ways provided it wins. The question is whether the horse that the Prime Minister is backing will win.

That brings me, very appropriately, to the next part of my speech, which concerns the referendum. As the Second Reading of the Referendum Bill is to be debated on Thursday, I shall only say that this innovation could easily cause lasting damage and difficulty in the future relationship of Parliament and people. However much talk there may be of this unique situation, I fear that the precedent will remain dangerous. Many of us in many different ways have had some experience of special cases and unique situations. Alas, they all have one thing in common: they do not remain special or unique for very long.

In this particular instance, the real risk lies in what would happen if the result were to go against the recommendation of the Prime Minister and his Government. In the White Paper they make it all too clear that they fear considerable damage to our country and its people in the event of a vote for withdrawal. Indeed, the arguments are stated so emphatically that few people would be able to understand how a Prime Minister holding such views could accept the disadvantages then imposed upon him and con- tinue as if nothing had happened. If he did, he would surely be forced to pursue policies which he knew to be second best. I should have thought that such a position was too degrading and humiliating to be tolerable.

But, of course, the right hon. Gentleman has gambled and trusts that that situation will not arise because the country will vote in favour of staying in Europe. As one who is proud to have been a member of the Cabinet which took Britain into Europe, I fervently hope that they will. As a result, one finds oneself doing everything in one's power to ensure that the Prime Minister's gamble comes off, even though one regards it as extremely reckless in the national interest and totally unjustifiable.

I would find this position irritating, if not to say intolerable, if it were not for one overriding consideration, which I recommend to my right hon. and hon. Friends and, indeed, others in the country who may feel like me. The long-term interests of our country must have precedence over any short-term party-political or personal feelings. I have no doubt in my mind that, judging on that basis, I must exert any influence I may have to the maximum in favour of Britain staying in Europe. I admit that I am one of those who have been committed to the importance of Britain taking her place in Europe from the time of the first negotiations. But I equally recognise that today, as the Prime Minister himself said, the argument in favour is rather different, and it is, to my mind, even more compelling.

Then, and indeed for the following 10 years, the question was: should we seek to join? Now we have to answer whether having joined, we should withdraw, even after arrangements within the Community have been improved to help us in the United Kingdom. I know that there are large numbers of people who doubted the wisdom of our entry, or even opposed it, but now are equally convinced that it would be a grave mistake to withdraw. So I think it is only sensible in this debate to give the reasons for one's own conviction, particularly in relation to the present situation. By doing so I hope to indicate how my commitment has become stronger as many of the original anxieties and fears expressed to me have been resolved by experience of the Community over the years.

Personally, I am influenced rather more on balance by the political than the economic arguments. Equally, like all my right hon. and hon. Friends, I naturally look at the immediate economic considerations, with which I shall deal first from the standpoint of my own particular constituency and my part of the country.

Before we finally get away from the whole question of the referendum and its aftermath, may I ask my right hon. Friend whether he agrees that the fact that the Prime Minister may seek to bind himself to the result of the referendum does not mean that he or the Government can effectively bind Members of Parliament in what they do regardless of the result of the referendum?

That is absolutely the correct position, and I think it has been consistently confirmed to be such.

Therefore, I look at this question as one who represents a large agricultural area in a difficult employment region in the north of England. I am concerned particularly about the provision of jobs, regional policy, and the farming industry, with its impact on food prices.

On agriculture, there was anxiety originally on the part of producers, perhaps particularly amongst farmers in the hills and marginal areas. They feared a loss of security and of the special assistance to the less favoured areas. In the event, farmers on the whole now advocate Britain's staying in Europe. This view was overwhelmingly endorsed by the National Farmers' Union Council in the last fortnight, and I find that the council's decision is emphatically supported by many farmers in my constituency.

Paragraphs 8 to 25 of the White Paper set out the improvements in the common agricultural policy recently negotiated by the Minister of Agriculture, Fisheries and Food. As I have indicated, I think that the right hon. Gentleman deserves congratulations, particularly on the beef arrangements. Both he and my right hon. Friend the Member for Grantham (Mr. Godber) before him have proved that our partners would not operate the CAP in the inflexible way that some critics feared.

Nor could I, who share with the Minister an area having a good number of hill farmers, fail to mention not only that we are entitled to pursue our own forms of assistance for such areas but that they are also likely to be helped by direct aid partly financed from Community funds. This is a considerable gain.

Does not the right hon. Gentleman agree that our so-called partners in France are operating unfairly against some of the farmers of whom he speaks—sheep producers—by refusing to allow British farmers to export sheep without their heads having been skinned, which is totally impossible for any sheep of the black-faced breed?

I have a little experience of black-faced sheep, but it does not take me quite as far as that. It would be better if the hon. Gentleman were to make his own speech later and allow me to continue with my own, which is directed at present specifically to the question of assistance to hill farmers, which I think is important.

The White Paper also stresses the requirement to balance correctly the interests of consumer and producer. At one time the bogy of rocketing food prices was a major argument of the opponents of entry into the EEC. Although I fear that this argument is still used unscrupulously by those who are so bigoted as to blame the increase in world prices on the EEC or to disregard altogether the increase in world prices, the argument has been dropped from respectable discussion.

The reason is not far to seek. It has not worked in that way. Paragraph 30 of the White Paper puts the position in a fair and moderate manner when it says:
"World prices have risen sharply and food prices in the United Kingdom have recently been no higher on balance than they would have been if we had remained outside the Community."
That is a fair statement and puts the matter in perspective, and I hope that it lays that bogy once and for all. So long as we are not to have exaggeration in this debate, I trust that that bogy will have been laid by that statement, because to do otherwise would be to exaggerate.

Does not the right hon. Gentleman recognise that he is totally wrong about beef, lamb, butter and cheese, all of which are dearer inside the Market than they are outside, and on the two livestock feed commodities of wheat and maize? An import levy of nearly £18 is presently paid on wheat in the EEC. The right hon. Gentleman is ludicrously wrong.

The hon. Gentleman must argue with his own Government's White Paper and with the policy of his own Secretary of State for Prices and Consumer Protection, for that is what they say, and I am prepared to stand by what they say in the White Paper. As what they say, with all the evidence and all the statistics they have behind them, seems to be in accordance with the facts, that is a perfectly reasonable way of proceeding.

As regards jobs, effective regional policy is of great importance to the remote and difficult employment areas of the country. Originally here, too, there was anxiety lest we should have to abandon the principle of regional incentives to industry. The White Paper makes it clear that the evolution in Community thinking on regional policy removes these fears, as the Community's plans now are much in line with what we do. In addition, the regions such as Scotland, Wales, the North of England and Northern Ireland, are likely to benefit directly from Community funds.

On the broader issue of employment generally, paragraph 147 expresses mildly a fear about the effect on jobs of our withdrawal from the Community now. Many firms employing large numbers of men and women in total are far more specific. They predict that if we were to withdraw now they, too, would suffer a loss of markets and a loss of trading opportunities, which would mean inevitably a loss of jobs.

There are, then, those overseas firms which invest in this country and which thereby help to improve plant and machinery and also, by their investment, to provide jobs. These firms make it perfectly clear that if we were to withdraw from the Community they would consider placing their investment elsewhere. If they were to do that, it would inevitably again lead to a loss of jobs.

We would all be very wise to regard those warnings carefully. We should disregard them at our peril. Clearly, our withdrawal at this time, as the White Paper makes clear and as many Indus- trialists will confirm, would put many jobs at risk. At a time when employment is already threatened seriously by inflation, such a deliberate act would surely be, to put it mildly, extremely unwise.

I want now to look further ahead at the political implications. I admit that I have always been deeply impressed by the wider considerations referred to in paragraphs 142–52 of the White Paper. For a start, I am not swayed by arguments about a loss of sovereignty or independence. In this modern world no nation, certainly not the United Kingdom, can afford to go it alone. Whether we are members of the EEC or not, our present partners will take decisions which are bound to affect us. If we are in the Community, we shall be able to influence those decisions. If we are outside on our own, naturally we shall have no say in them. Therefore, I believe that we should actually have less power over our own affairs by attempting to remain on our own in the modern world.

Nor should we by ourselves have the same influence in international affairs as a lone voice as we would have speaking with our partners in a strong Community. We have certainly found that in recent years in many of the troubles that have beset the world. Surely we should all want to see Britain in the future exerting her influence for good in Europe and in the world, as she certainly has in the past.

In Europe I believe that we have a vital role to play, for I certainly do not underestimate the effect of the European Economic Community in the pursuit of peace. Two world wars in one generation had their origins in the long-standing antagonism between France and Germany. Today these two countries work together as partners. By working with them we in Britain can do much to cement this new relationship. Reflecting on the sadness of personal loss and the horrors of those wars, I certainly would hate to throw away that opportunity, and so, I suspect, would many of our fellow citizens.

On Britain's influence in the world, I could not better the Prime Minister's statement of 2nd May 1967, quoted in paragraph 142 of the White Paper. I agree entirely with what the right hon. Gentleman said then, and it is reinforced today by the attitude of the Commonwealth countries whose position if we joined in Europe originally worried many people. The vast majority of those countries have made it clear that they believe that we should remain in Europe, and they clearly hope that we will do so.

We in Britain today have inherited a great nation with power and influence far in excess of what would normally be enjoyed by a comparatively small island with few natural resources. This position was built up because our ancestors abandoned all petty thoughts of isolationism and looked outwards from our shores. If we in our turn want to provide the same opportunities for future generations as those that we have had, we must now follow that example.

In the modern world, I am convinced that the only effective way of doing so is through our active participation in the European Economic Community. So, since we in this House are likely to be denied the normal opportunity to settle this issue, I hope that my right hon. and hon. Friends will take the only course open to us and unite with right hon. and hon. Members on both sides of the House, vote massively in favour of the White Paper, and so give a really powerful lead to the nation in support of Britain's staying in Europe.

4.41 p.m.

We are being asked to approve continued membership of the European Economic Community on the basis of the White Paper. I begin by assuming that the White Paper represents the view of the Government as a whole and is not merely the expression of opinion of two-thirds of the Cabinet.

I find that the constant references in the White Paper to the manifesto of 1974 almost suggest that the renegotiations were primarily for the benefit of the Labour Party and not for the country at large. If that is the basis on which the referendum will be campaigned in the country, in my view it is not a very wise approach.

The Government have three major achievements to their credit. I re-echo what the right hon. Member for Penrith and the Border (Mr. Whitelaw) said. I believe that those Ministers who have been in charge of these renegotiations have achieved considerable amendments not to the treaty but to the terms under which our membership could continue. They deserve unstinted credit on that account. However, I also take the view that much, if not all, of that could have been achieved without having to threaten withdrawal first.

Taking the Government's three major achievements, the Government themselves in paragraph 151 of the White Paper have said that the Community has shown itself to be flexible and ready to adapt to the changing circumstances of the world in response to the differing needs of member States. Some of us were aware of that before the renegotiations and did not need the renegotiations to prove it. If threatened withdrawal was necessary first, I hope that the Government are no longer taking the view that that is a course of action which will have to be followed in order to continue to get flexibility in the future.

Secondly, the Government tell us in paragraph 55 that industrial policies, regional development and State aids are permissible. That was also well known, because it was stated in Article 92 of the treaty, and, whether it be any comfort or not, I say to the Tribune Group of the Labour Party that membership will still permit us to indulge in "Bennery" of the wildest sort.

Clearly, there have been short-term gains. There has been a change in the beef régime. There have been agricultural subsidies to assist in the distribution of surpluses. We have the question of sugar, where about £37 million in subsidy is available to our consumers. About £13 million for veal and beef has gone to assist pensioners. There have been changes in budgetary contributions. There have been great developments in regard to the Third World. It is fair to say that there are some Government supporters who were previously doubting and have been won over by the changed terms. The Minister of Agriculture is one. I might paraphrase Rab Butler's great statement and say that the right hon. Gentleman is now one of the best Europeans that we have.

When the British people assess the arguments and note that there are Cabinet Ministers bitterly opposed, it is only fair to say that the majority of them were fundamentally hostile from the very beginning, long before renegotiations took place. if we consider the position of the Secretaries of State for Employment, for Social Services, for Industry and for Trade, can it be said that they were suspending judgment until the outcome of the renegotiations was known? I believe that they decided to postpone the moment of their announcement of fundamental opposition until after their colleagues had completed 12 months' hard slog in Brussels because the moment was then right in their view for thawing out and presenting their prepared views which had been deep-frozen long long ago.

There is no doubt that, in assessing the opposition from those members of the Cabinet who are hostile, the referendum is increasingly seen in the country to be a device to keep together the Labour Party, and, for some, the renegotiations have been an excuse to reserve judgment until 12 ministerial months have passed and two General Elections have been got over. In those circumstances, I would almost feel sorry for the Prime Minister if I did not realise that he was responsible for getting into this muddle. It was the Prime Minister who in the foreword to the 1974 manifesto said that the Common Market threatened us with still higher food prices and with a further loss of control over our own affairs. What one might think were the two major criticisms of the Community presented now by the anti-Marketeers were ones which the Prime Minister himself raised in 1974 and has now tried to lay to rest.

For those Ministers who dissent, therefore, I have no great respect. They were prepared to remain in a Cabinet on the basis of the myth that if the terms were right they would be very happy to continue loyally serving the Prime Minister of the day. We knew that they were opposed to the terms whatever they were, and it would have been better if they had not taken their daggers into the Cabinet Room and kept them in reserve for 12 months until their colleagues came back from Brussels after hard negotiations on behalf of the British people.

Is the right hon. Gentleman aware that the Prime Minister said in answer to a question from a Government supporter that some amendment of the European Communities Act was not beyond the bounds of possibility? If the notorious Section 2 of that Act had been amended as part of the renegotiations, would not what the right hon. Gentleman is saying have been true?

If the hon. Gentleman is saying that the real sticking point of the seven dissident Ministers is that Article 2 has not been renegotiated and that the treaty has not been fundamentally changed, it is extraordinary that not one of them raised that point in their moment of dissent.

I accept that there is a large body of opinion in the country still undecided. That is not surprising, because the issues are complicated. We are, after all, dealing with the first occasion in history on which the nations of a continent have decided to unite politically and economically through peace and without unity being achieved through a deliberate act of war. It is a totally new departure in the political evolution of the world.

I hope that the tests that the people will apply will be these. What will Britain's influence in the world be inside and outside the Community? What will be her ability to influence her own future, which, after all, is the only worthwhile type of sovereignty, inside and outside the Community? What will be the prospects for the economy inside and outside the Community? What will be the job prospects and real living standards inside and outside the Community?

I assert that the answer to all those questions is that not only is it vital that we remain full members of the Community but that those interests would be gravely undermined if we were to withdraw.

As I understand it, the view of the respectable anti-Marketeers—there are some not so respectable, as I am sure some of the anti-Marketeers will accept—is that we should be better off as a country making our own arrangements with the world at large, and we should thereby have a greater measure of sovereignty. I believe that to be their view, and that they draw the conclusion that Britain would be politically and economically stronger in these circumstances outside the Community rather than within it.

I should like to know what alternative the anti-Marketeers have in mind, and hope that we shall hear about that during the debate. Certainly, it cannot be the Commonwealth. The Commonwealth has either signed up or is signing up with Europe. It is not the 22 developing countries of the Commonwealth who signed the Lomé Convention, which will give them free entry for industrial products and almost entirely free entry for agricultural products, which has for the first time given them indexation of commodity agreements, and which will give them access to about £2,000 million over the next five years to improve the infrastructure of their economies.

Nor will it be the other Asian countries of the Commonwealth, which have discussed generalised preferences, which are now to have enlarged quotas, and which will continue those talks. Nor will it be New Zealand, which has better access. Nor will it be Australia. Nor will it be Canada.

There is no Commonwealth country which wants us out—and my answer to the hon. Member for Banbury (Mr. Marten), who asked our Prime Minister whether Prime Ministers Whitlam and Roling were speaking for their Governments, is that in this case we must assume that they are, because the doctrine of non-collective responsibility obtains only in this country.

One could reinforce that point by reminding ourselves that in an important matter of this kind there would be the usual consultations between Commonwealth Governments before any statement would be made by a Prime Minister in this House.

That is wholly correct, and I am grateful to the right hon. and learned Gentleman. Those of us who have been privileged to meet the Prime Ministers of Australia, New Zealand and Canada in recent times will, I believe, confirm everything which the Prime Minister said today about the Commonwealth.

The most extraordinary Minister in the whole of this dispute, in my view, is the right hon. Lady the Minister of Overseas Development. In October 1972, before that great October vote—if I have not got her words precisely right, I ask for her forgiveness, and I shall correct them—talking about the wish of some right hon. and hon. Members opposite to have a free vote, she said words to the effect that those who indulge their consciences will undermine the credibility of the party.

George Orwell, roll on!There is the right hon. Lady, who has negotiated a great agreement for the 46 developing countries, knowing full well that if Britain withdraws, all those obligations and treaties will be gravely imperilled —

I shall tell the hon. Gentleman why. If he does not know, it is about time he found out. It was a balanced agreement between the Nine and the 46. In my view, all those negotiations would have to be gone through again because they depended upon a whole series of checks and balances. If the hon. Gentleman will read the communiqué in full, he will see precisely what I mean.

The right hon. Lady came back having achieved what she never thought it possible to achieve from the Common Market. It did not live up to all her prejudices, and they were shattered. But her loyalty to her old Tribune colleagues is such that she is now indulging her conscience—and, if I may say so, undermining her own credibility.

I do not believe, therefore, that the Commonwealth is the great alternative which many right hon. and hon. Members opposite would urge upon us. But I assume that they recognise that the Common Market is at least important as a trading organisation. It takes 35 per cent. of our exports, and 50 per cent. of our exports go to Western Europe. As a whole, moreover, the non-Common Market countries—the seven of EFTA, Greece, Portugal and Spain—are all increasingly finding that their trade, whether they like it or not, is becoming enmeshed with the EEC, the difference being that they have to accept European standards and European regulations without their having any political influence in drafting them.

We have to know from the anti-Marketeers, therefore, what chance they think our nation would have, having torn up the Treaty of Rome, in then going as a supplicant to ask for benefits. Are they satisfied with the experience of EFTA in negotiating alternative arrangements? Are they aware that the five EFTA countries which are steel producers have to register their steel prices and have to charge the same steel prices as the Community does in order to avoid unfair competition? There is no representation; it is mandatory if they want trading arrangements.

Are they aware of the tight rules of origin which could mean that as little as 3 per cent. of an electrical component if it came from a country with no trading arrangement would cause that component to be subject to the full tariff? Are they aware of the tariffs which are being retained against the EFTA countries on sensitive products—which in this country would mean textiles? Are they aware of the tight limitations placed on State aids, or of the safety regulations and harmonisations which are being achieved without any representations being accepted and without consultation? Some sovereignty outside the Common Market! Some independence!

Are the anti-Marketeers aware of how practically all the rules for our invisible exports in banking and insurance—as Switzerland is now discovering—are laid down by the Common Market? We are there as a party to discuss them. The outside world is not consulted. Again—some sovereignty, some independence! I ask those questions, of course, assuming that they wish to continue to trade and to have 35 per cent. of our exports going to the Common Market countries.

We have had the example of Norway put before us on many occasions, but I hope that we shall not hear much more of that. Norway is a country which exports metals, alloys and raw materials which are desperately needed in the Community, and, therefore, 35 per cent. of its exports go in tariff-free. But that is because Norway's economy is complementary to that of the Nine, whereas ours is, or would be, directly competitive with that of the Eight.

Moreover, 40 per cent. of Norway's export earnings comes from shipping, and we have not yet seen what restrictions and regulations regarding unfair competition, or even outside competition, the Common Market countries will decide upon.

In the circumstances, I am certain that Norway's future outside the Community will be very difficult. She may have 100 million tons of oil by 1980, and that will cushion her for some time, but the position of 3·9 million people in Norway with much higher costs for agriculture and, therefore, no great competitive threat to the Nine is totally different from that of 53 million people in Britain if we are to tear up the Treaty of Rome and ask for special terms.

Is it suggested that there would be some sort of North Atlantic arrangement? The last Kennedy Round has not yet been ratified. Are we to have some sort of free trade arrangement with Japan? That would be cosy! The last time a free trade arrangement was attempted, it was done by the right hon. Member for Chipping Barnet (Mr. Maudling), and, much as I have affection for the right hon. Gentleman, I still cannot regard that as the most conspicuously successful effort of his political career.

What about all the decisions which would be taken without our being consulted? What the anti-Marketeers wish to do is to gamble away the certainty of a market of 250 million on the possibility of getting benefits from the Community which they now urge us to leave.

I do not believe that the Community is a panacea for anything, but I am convinced that life would be very much more difficult outside it than within it. What are the problems which we face as a nation? What about the multinational corporations? Are not the multinational corporations more likely to be controlled and regulated by a multinational society than by a national one? What about regional development? Is it not right that Europe is collectively prepared to concentrate on the poorer areas so that there is no cut-throat competition over regional aid, and are not the poorer areas of Europe at present most of Italy and most of the United Kingdom, with the exception of London and the South-East? I am delighted that of the £540 million allocated for regional aid over the next three years £155 million, or 28 per cent., will come to the United Kingdom, and I may add that £5 million of it will come to Devon and Cornwall. I am an enthusiastic European on that ground alone. Is it said that we should get rid of all that?

What about the European social fund? Has the steel industry been wrong to take about £10 million as a half contribution towards the cost of retraining steel workers? Were we wrong in 1974 to take about £26 million for industrial retraining? Is it wrong or against our country's interest that the muscle power of Europe should be used for retraining, for industrial development and for the restructuring of industry? The Secretary of State for Industry is always telling us that we need all the investment that we can get. I suspect that it sticks in his gullet to take it from Europe.

What about the European Investment Bank, and the £113 million in 1973–74 at low interest rates for modernising and restructuring industry? When the right hon. Member for Deptford (Mr. Silkin), Minister for Planning and Local Government, goes to his constituency, or travels through the Dartford Tunnel, let him realise that the interest charges being saved on a loan from the European Investment Bank for that tunnel will save his constituents and the ratepayers of Kent as a whole £10 million, because they are getting the loan at 1 per cent. a year. This is the organisation that we are being asked to leave in the hope that the right hon. Gentlemen who are opposed to Europe will somehow get some new great trading arrangement, some new great co-operative economic movement; but that, of course, is sheer illusion.

I make no bones about it: I am just as interested, if not more interested, in the political significance of Europe. We are in fact co-operating with eight democracies in Western Europe, and it is significant that of the original Six and now Denmark and Ireland none has regretted its decision.

I do not know better than the Danes, but if the hon. Lady wishes to know, sometimes one can talk to people in government and sometimes one can get a straight answer.

We are told that the Commission is a faceless dictatorial body; but all the Commission can do is to carry out the policies that have been decided by the Council of Ministers. There will be no agreement by the Council of Ministers unless it is unanimous, because each country has a veto, and no Minister will go to the Council of Ministers to put forward policies that he cannot carry in his own Parliament, for otherwise he will be toppled. If anyone has any doubts about that, there are many right hon. Gentlemen on the Front Benches who will be able to bear out what I say.

What I want to ask the anti-Marketeers is what sort of sovereignty they are prepared to surrender. Any? Was it wrong to surrender it to the IMF in order to prevent violent fluctuations in the world money supply? That was a great intrusion into our sovereignty. Was it wrong to surrender it to the OECD on many matters of economic co-operation? Was it wrong to surrender it to EFTA, which had very great powers of control over our external tariffs?

Was it wrong to surrender it to the United Nations? There used to be Labour Members who were in favour of world government. Here is an opportunity to build up government on a European scale. I make no bones about it—I want to see a united Europe in which we play a full part.

The best case for joining Europe was made in 1947 by the Keep Left Group of the Labour Party, which was not the daddy but the grandfather of the Tribune Group. Under the heading "We are Europeans now", among other things it stated:
"France and Britain are now partners in a common fate … in times past we both used to fight major wars from our own resources; now we are both unable to do so. The Channel has ceased to matter, and strategically we British have become Europeans whose prosperity and security depend on that of the rest of Europe. Working together, we are still strong enough to hold the balance of world power … but if we permit ourselves to be separated from France, and so from the rest of Europe … we shall not only destroy our own and Europe's chances of recovery, but also make a third world war inevitable … if we could work towards an economic union of European States, we should once again be able to stand up to an American slump … A United Europe strong enough to deter an aggressor, but voluntarily renouncing the most deadly offensive weapon of modern warfare would be the best guarantor of world peace … the greatest obstacle to European unity is, of course, British Initiative. To be effective, this initiative must be primarily concerned with European unity … the German problem is insoluble as long as Europe remains divided."
The three authors of that were the late Dick Crossman, the right hon. Member for Ebbw Vale (Mr. Foot), now, in the theological terms, a dissenting Minister, and the hon. Member for Bethnal Green and Bow (Mr. Mikardo). That was the motley army that the hon. Member was leading in 1947.

I believe that exclusion from Europe would be bleak. I believe that there is every probability that we should face a high tariff wall around continental Europe. There would mean less trade, less investment. There would be a threat to political stability both here and in Europe.

I want to work towards a united Europe that is outward looking and with a low external tariff and with liberal trading policies. I want to share power in order to get what the Prime Minister referred to in May 1967 as the "benefits of interdependence". I want direct elections to a European Parliament by 1978. I want political parties in this country co-operating with their sister political parties in Europe, fighting on a common platform, and certainly during the referendum campaign I hope to have on our political platforms many leading Europeans campaigning with us.

Europe disunited plunged the world into war twice this century, but Europe in its heyday produced the philosophy, culture and teaching of Rome, London, Paris and Athens. Politically and economically it could give the world an undreamt-of dynamic force.

This country has been in retreat ever since the Second World War, retreat from its overseas possessions, retreat from its overseas commitments, retreat from many of the responsibilities abroad that it had accepted. There are some who wish that retreat to go still further and who would turn this country into one of a siege economy. I believe that the time has come to end that retreat. It is time to reverse it and to advance into Europe.

That is why I hope that the British people will vote in the referendum that that is what we should do.

5.7 p.m.

The debate has been no exception to the rule that when the spokesmen of all three parties agree the House is wise to be rather sceptical about what they are saying. Therefore, I intend to do what the Prime Minister suggested and what the right hon. Member for Devon, North (Mr. Thorpe) certainly did not do—assess the actual results of the renegotiation.

The overriding fact emerging is that renegotiation has changed almost nothing, and almost every Member knows in his heart of hearts that that is true. The attempt in the White Paper to turn molehills into mountains is no more convincing than that of the 1971 White Paper, although the special pleading in this is a little less untruthful than that of 1971. All this is not the fault of our negotiators, apart from their failure to attempt to get either of the treaties amended. It is inherent in the nature of the Common Market.

First, renegotiation has not in any way altered the constitutional position, the Treaty of Rome, or the system of authoritarian legislation from Brussels. Secondly, there is no alteration in the Treaty of Accession, which forces on this country a series of food taxes on almost every major foodstuff and lays down the actual increases in the prices of those foodstuffs that we have to accept over a four-year period much of which is still to come. The right hon. Gentleman did not mention that, and there is no mention of it in the White Paper. Thirdly, there is no fundamental renegotiation of the common agricultural policy.

Fourthly, even on New Zealand, a subject on which the Prime Minister has always claimed that there had to he a major improvement, there is at best virtually no change and at worst a worsening of the situation from the United Kingdom's point of view. The import duty on New Zealand mutton and lamb still has to go to 20 per cent. All our cheese imports from New Zealand have to come virtually to a stop from 1978 onwards, and there is no change except for a pious form of words that can mean anything or nothing.

Even for New Zealand butter the 1972 Treaty of Accession said that continued special arrangements after 31st December 1977 would be determined by the Council, and no date was fixed by which those arrangements should end. However, according to the Prime Minister, the new Dublin agreement says:
"Thus for the period up to 1980 these annual quantities … could remain close to effective deliveries under Protocol 18 in 1974 …"—[Official Report,12th March 1975; Vol.888, c. 521.]
At best, that means that a short-term compromise has been reached after which everything remains open and subject to veto. But, at worst, the words could be taken to mean that the whole special arrangement is now to end in 1980, although before renegotiation it was to extend indefinitely. It is thus arguable whether the New Zealand part of the agreement has made the situation a little better or a little worse.

I turn to the question of the budget contribution, which is important, although not, in my view, anything like the major part of the economic burden of membership. On closer examination, it is not certain whether the new agreement is better or worse for us than the Commission's proposals of last January. A whole series of conditions still have to be satisfied before we get any refund. The balance of payments criterion is not wholly omitted. The system of "own resources", which the Labour Party manifesto said was unacceptable, is accepted, and after three years of refunds our economy has to be supervised by the Commission in any case.

According to theEconomistof 29th March, the arithmetic of what we have to pay is as follows:
"The deal finally struck in Dublin by the Prime Minister was not as good as the plan the EEC Commission proposed in January."
TheEconomistgoes on to say that if, for example, the budget in 1980 is 8,000 million units of account and if our own Treasury estimates of GNP and budget share are correct,
"Britain would qualify for a refund of about 345 million units of account under the Commission's scheme, but only 250 million under the Summit agreement."
Alternatively, if the budget tops 10,000 million units of account, Britain would have qualified for 422 million units of account under the Commission's scheme and only 300 million under the Dublin agreement. Therefore, when the agreements are looked at, unless theEconomist'sfigures are wrong, they arc clearly not as attractive or as convincing as has been made out. I should like to know from Ministers whether those figures are correct, because the budget renegotiation was supposed to be one of the major achievements of the Government in the renegotiation.

I turn next to the Regional Fund, which, I gather from the Leader of the Liberal Party, was enough to convince him of the necessity of staying in the EEC. We are now offered net, according to the Foreign Secretary, £20 million a year for the whole of the United Kingdom. That is less than one-tenth of our expenditure on assisted areas and it is one-hundredth of our trade deficit with the EEC. Although it is intended as a contribution to the whole of the United Kingdom, the Leader of the Liberal Party may like to know that it would pay for approximately three-quarters of a mile of the proposed motorways for inner London. I mention that so that the right hon. Gentleman can estimate the magnitude of what has convinced him in this matter. Indeed, it is such a molehill that the White Paper—which seems to understand this point better than the Leader of the Liberal Party—does not even attempt to make it into a mountain.

After this further, well-meaning effort in renegotiation, what are we left with when we strip away all the verbiage? We are left with an authoritarian system of legislation, taxation and government which is already sapping away not just the sovereignty of this country as an independent self-governing nation but the democratic control of our people over the laws and powers of government. To my mind, that is more important than what is normally called sovereignty.

Does the House realise that in 1974 of the 3,936 legislative Acts adopted, as they call it, by the EEC which claim legal force in this country, over 3,000 were adopted by the unelected Commission and not by the Council and 2,980 of those were Commission regulations—in effect, legislation in secret by officials, automatically binding on the courts of this country? If it is said that they were all fairly trivial, they should not be legislation. If they were not trivial, they should not be enacted in this manner.

To accept this type of authoritarian rule is to go back on a democratic principle which has been taken for granted in this country for nearly three centuries; namely, that legislation must be approved by representatives of the people. The right hon. Member for Penrith and the Border (Mr. Whitelaw) spoke today about the two world wars in this century. Some of us who lived through those two wars —I had always supposed all of us—believed that we were fighting, amongst other things, for the preservation of government by the people for the people in these islands. That is not just my view. The present Prime Minister put this very justly in a speech as recently as 31st January 1973 when he said:
"In 93 legislative words the safeguards gained after centuries of constitutional struggle and even bloody civil wars were swept away by a provision that said simply that hereafter any. thing enacted by the EEC automatically became law, annulling any laws which were inconsistent without debate."
That is still true. There has been no change. The Treaty of Rome and the European Communities Act remain unamended by the renegotiation.

I am interested in my right hon. Friend's deep concern that every statutory instrument and every piece of legislation should receive the scrutiny and assent of the House. Has he given thought to how the House might consider the three volumes of statutory instruments issued each year by Whitehall which have legal force and which have no consideration here whatever?

My hon. Friend knows perfectly well that it is open to the House, if it wishes, to examine any of the statutory instruments laid before it by the Government. If my hon. Friend's view is that our system is not democratic enough, I am in favour of making it more democratic and not less democratic.

If it is suggested that we should have a Common Market Parliament, that is to advocate outright federation and the end of the independence of this country, which the British people, on all the evidence available to us, certainly will not willingly accept. However, I believe they should understand that this will be advocated by a lot of people if the electorate vote in the referendum for staying in the EEC. The Leader of the Liberal Party candidly made that point today.

Secondly, we are left after renegotiation with the heavy economic burdens of membership virtually unchanged. In my view, a country's political strength in the modern world depends largely on its economic strength. This country can prosper economically only if we stick to three policies. First, we must buy our essential imports as cheaply as possible. Secondly, we must keep our markets open for our industrial exports. Thirdly, we must refrain from importing too many manufactured consumer goods. It was by those policies that we built up our great trading strength in the last century, and it is because we have departed from them in recent years that we are now in chronic deficit, even apart from oil.

The greatest folly of all is artificially raising the prices of our food imports. It is no good hon. Members opposite saying that the common agricultural policy has not raised our food prices. The hard fact is that even in 1974, when world food prices were exceptionally high, beef, veal, mutton, lamb, butter and cheese, and many secondary foods, could have been imported more cheaply if this country had been outside the Common Market.

However, world food prices have been falling for six months. Wheat and maize —the two most important commodities—are cheaper outside the EEC, and the EEC has reimposed import levies on them. Virtually every food import crucial to this country could now be obtained more cheaply outside the Common Market if we were not members. Indeed, if this were not so, why all these import levies, bans and intervention buying? What are they for?

Under the Treaty of Accession, unaltered as it is, our main food prices must be artificially raised year by year above the present level. I give two examples. We are paying a tax of £300 a ton on butter in order to raise our internal price to £600 or rather more, and under the treaty, by 1978, that £600 must be artificially raised to over £1,000 a ton. Secondly, there has been an almost total ban on beef imports into the EEC since May last year. The world price is 30 per cent. or so below the EEC price and the beef mountain has risen to well over 300,000 tons. EEC beef is again being sold at a huge discount to Soviet Russia and other countries lucky enough to be outside the Common Market. If hon. Members doubt that, they have only to look at theFinancial Timesof as recently as 3rd April.

The White Paper never mentions the beef import ban when telling us proudly that the Government have obtained one very welcome agricultural concession in substituting deficiency payments for beef intervention buying. But why only for beef? Also, in the words of paragraph 22 of the White Paper, the concession is "initially for a year", after which none of us knows what will happen.

What I find most remarkable in the renegotiation story is that there has been no fundamental renegotiation of the common agricultural policy. Indeed, the Prime Minister, in a candid moment, virtually admitted that this afternoon. The Commission's paper entitled "Stocktaking of the Common Agricultural Policy" remains just a piece of paper. It was not even discussed, let alone approved, at the Dublin summit meeting.

Accordingly, it is pure nonsense to say that cheaper food is not available outside the EEC and that membership has not raised our food prices. If hon. Members want to measure accurately the effect on food prices here of the whole operation, they will do well to note that from 1971 to 1974 food prices in Norway and Sweden rose by 20 per cent. and in this country and Ireland they rose by 40 per cent. That is the fairest measure of what has happened.

The vital issue, however, for this nation's long-term future is not whether a particular foodstuff costs more or less at a particular date but whether we are to be free in future to buy any major import from the most efficient low-cost producers in the world. As nobody knows the future of world prices, it is undeniable that we must, in the long run, be better off if we have that precious freedom to import than if we have not. Artificially raising the price of one of our main imports such as food not merely raises living costs and turns the terms of trade against us but artificially raises the labour costs of producing our manufactured exports and thereby damages our competitive position all over the world.

That is why unquestionably we should be far better off in a genuinely European industrial free trade area. It is also the reason—and again this has not been mentioned by any of the party spokesmen today—why we have incurred such a staggering non-oil trade deficit with the EEC in the last two years.Hansardfor 24th March shows that the visible trade deficit with the EEC Eight in 1974 was £2,035 million on a balance of payments basis and is now running—these are the secondary dynamic effects of which we have heard so much—at £2,600 million. The deficit is getting worse.

The remarkable fact is that even the non-oil deficit with the EEC—about £1,600 million—is equal to the whole of our non-oil trade deficit with the rest of the world. Who is right, the anti-Marketeers, who predicted a deficit, or the 1971 White Paper—and I see the right hon. Member for Sidcup (Mr. Heath) present—which predicted a "positive and substantial surplus"? This is a test of fact and not of argument.

In addition to this disastrous deficit another basic change in the situation has occurred. As the Prime Minister said, history has not stood still. The free trade area agreement between the EFTA and EEC countries for full industrial free trade is now an accomplished fact. We used to be told that it could never be created. In fact Norway and Sweden and the other EFTA countries will soon be enjoying nil tariff trade both ways in the combined group of 16 EEC and EFTA countries without suffering any of the burdens of the common agricultural policy or authoritarian rule from Brussels.

The very people who told the Norwegian public that they would suffer catastrophe if they stayed out of the EEC are now telling us that we should suffer catastrophe if we withdrew and rejoined Norway and the other EFTA countries. That is the purest nonsense. I ask the House briefly to consider these facts. By the end of this year, all the EFTA and EEC countries will be approaching complete industrial free trade with one another. I agree that there are a few exceptions, as is always the case with such agreements.

If we were to withdraw from the EEC and proposed to continue this all-round European industrial free trade, we should not be proposing a new tariff agreement. We should be advocating thestatus quoin industrial trade, and anyone wishing to disturb it would have to take the initiative in proposing to raise tariffs against the United Kingdom alone. That is a fact which hon. Members, whether deliberately or not, ignore in much of their argument.

Who would be likely to make such a proposal? Certainly no EFTA country would do so. It would also clearly be contrary to the interests of EEC countries, as well as being inherently absurd, because those countries are selling far more in our markets than we are selling in theirs. A legal form for the new arrangement would have to be devised, but in terms of industrial and trading realities we should simply be proposing to maintain the status quo.

The House should also note this. The EEC's industrial common external tariff averages only about 7½per cent., which is low by international standards and lower than ours. The White Paper rightly points out that in this year's Tokyo round of world trade talks the EEC
"has now agreed to negotiate a substantial reduction in industrial tariffs."
Therefore, even in the highly unlikely event of the common external tariff being raised against us by the EEC, it would average less than 7 per cent., and, since ours is higher, our trade balance would improve as a result of the change. In any case, in spite of what the Leader of the Liberal Party said, there would certainly be some special arrangement with Ireland. It is doubtful whether Denmark would come out with us or remain in the EEC, but, whatever happened there, the tariff against British goods would be very low.

Does not the right hon. Gentleman agree that in the modern world the level of tariffs is not the principal deterrent to international trade but that the setting of standards, whether environmental or technical, can play a great part, as we have seen in our trade with Japan? Does not the right hon. Gentleman agree that if we are not in the Common Market and are not able to participate in the setting of standards many of our industrial goods will be competing at a disadvantage, as the Swedish steel industry has found?

The great burden of the case of the pro-Marketeers has been that the raising of this tariff barrier against us would cause all these catastrophes and unemployment. I agree with the hon. Gentleman that there is little substance in that. There are agreements on standards in EFTA and in all other common markets and trading areas, and I have not the slightest doubt that we should in many cases follow the standards which would be agreed between EFTA and EEC countries. That is not a major factor in the situation.

Therefore, given only a moderate degree of resolution and skill, I am convinced that in those circumstances we could soon achieve an arrangement as beneficial to us as that of Norway. Sweden, Switzerland and the rest—indeed, in some ways more beneficial, because our food prices would be lower than theirs because they follow a more protectionist agricultural policy. As the Leader of the Liberal Party acknowledges, we should remain full and active members of the United Nations, its agencies, NATO the OECD, the Council of Europe and all the rest. Nobody disputes that.

There has been no suggestion by anyone that we should withdraw from those organisations. What I was trying to find out was where the anti-Marketeers are prepared to give up sovereignty and where they are not. There must be a limitation or delimitation which it would be valuable to know.

Surely the right hon. Gentleman must have discovered by now that none of the international institutions which I have prescribed presumes to legislate directly on the internal affairs of this country. He must have grasped that. That is fundamental to some of us, if not to the right hon. Gentleman.

Therefore, renegotiation has not altered the basic fact that this country is being asked by the Euro-enthusiasts at the same time to sacrifice a large measure both of its political liberty and of its economic future. Faced with that choice, I cannot believe that the country will come to the wrong decision.

I can well understand that right hon. and hon. Gentlemen who belong to or sympathise with the Tribune Group should be opposed to the motion. Those who would rather substitute an Anglo-Saxon form of people's democracy for a Western democracy based on a mixed economy must naturally be opposed to joining a system which could well produce a vigorous revival of the free enterprise system. By the same token, those who feel a closer affinity, instinctive or intellectual, with Moscow rather than with the West will also naturally be opposed to joining a system to which the Soviets are unalterably opposed.

For my own part, I should have thought —although I am not qualified to judge—that a good Marxist case could be made for Britain's joining the Community. The Romanian, Yugoslav and Chinese Governments all wish us to stay in, and I have heard that case powerfully put by the hon. Members for Wolverhampton, South-East (Mr. Edwards) and Ogmore (Mr. Padley), who can hardly be termed Right-wing members of the Labour Party. But I must leave it to those who are better qualified than I am, those who share the assumptions of the Tribunte Group, to try to convince the waverers in that group.

I wish to address myself to hon. Members on both sides of the House who believe in the mixed economy, the Western alliance and the Western pattern of democracy, including the right hon. Member for Battersea, North (Mr. Jay), who—if I may say so with respect to the dissentient Ministers—is by far the most distinguished and informed critic of the European Community on either side of the House. I will deal, if I may, with the two main arguments he put forward—the economic and the political.

The right hon. Gentleman oversimplified the economic case by suggesting that the strength and pre-eminence of Britain and the British economy had been built up on cheap food. If I read history aright, we began to get cheap food only in the 1870s, at the very time when the Americans and Germans began to overtake us in industrial know-how and marketing.

My right hon. Friend surely is not arguing that America and Germany overtook us because they were paying more for their food?

I do not want to revive the arguments of generations ago. But a main argument of the free traders was that the Germans and the Americans had to pay more for their food than we did.

In fact, many factors contributed to our pre-eminence. There was our technological supremacy and our naval preeminence. But the foundation of our industrial and financial success was that we were not an island country but since the beginning of the eighteenth century had been a member of a large trade and payment area—the Empire, later the Commonwealth. It was thanks to this that we became a great industrial Power, it was thanks to this that the City built up its financial pre-eminence, and it was thanks to this that we avoided violent social revolution for 300 years. The Commonwealth was a great trading area in the sense that it represented a vast extension of the home market. It was a great payments area in the sense that the resources of the whole area backed our currency.

In the latest stage it was institutionalised shortly before the war in 1931 and 1932 by the formation of the sterling area and the Ottawa Agreements. There will be no doubt on either side of the House that membership of this great trade and payments area enabled us to get out of the great depression more quickly than other industrial countries like the United States and the Western European countries. It helped us to finance the war effort before lend-lease, and it saw us through the aftermath of the war.

The lesson is clear, that 50 million people could not live in this island on the standard of living they expected and in the free society that they had enjoyed or exercise any measurable influence in the world unless Britain was part of a wider area.

It was our clear interest in the immediate post-war period to try to maintain and develop that Commonwealth trade and payments area, but there were great difficulties in the way. We were not a big enough market to absorb all the exports which the Commonwealth countries wanted to sell. We could not provide them with all the capital equipment they wanted. We could not provide all the investment finance they needed, let alone the aid.

Inevitably, Commonwealth countries began to turn to the United States, a United States which was implacably opposed to the continuation of the Commonwealth trading area and which was determined to make the dollar the only reserve currency. Any chance that there might have been of maintaining the Commonwealth as an effective trade and payments area was undermined by the Washington Loan Agreement concluded by Mr. Attlee's Government and the Geneva and Havana Charters ratified subsequently.

The right hon. Member for Brighton, Pavilion (Mr. Amery) knows quite well that in the original GATT negotiations the United States accepted the continued existence of existing preferential trade agreements. That meant that we were at liberty to continue the Commonwealth trading system if we wished.

We could continue the existing agreements but we were committed to phasing them out. We could not change them from their present rate to a proportional rate, increase them or introduce new ones.

Recently the Prime Minister said:
"My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe.—[Official Report, 18th March 1975; Vol. 888, c. 1465.]
The Prime Minister and, I think, the right hon. Gentleman were members of the Government that accepted the Washington Loan Agreement. The Prime Minister was a member of the Cabinet which accepted the Geneva and Havana charters. The consequences followed inexorably—they flowed on unavoidably. The preferential system was eroded and the sterling payment system was virtually dissolved after the devaluation in 1968.

We were left alone in a world dominated by the United States, the biggest industrial Power, by the Community of the Six, the world's biggest market, and by the Sovietbloc, a closed economy. We were alone, competing with Japan for world markets. The only trade and payments area we could join—and unless we joined one we would have been in an extremely uncomfortable position—was the European Economic Community, a community with vast bargaining power, able to influence, if not to dictate, the price it pays for many of its imports. It is a Community with great resources of technology and brain power, with great political influence, a community well worth joining.

But to me joining the Community was not an end in itself, important though that was. It was also the only way of maintaining and reviving our links with the Commonwealth. The Prime Minister has said that he has always had more regard for the Commonwealth than for Europe. He began to think about Europe only in 1966. I was invited by Sir Winston Churchill to take part in the preparatory moves towards forming the European movement in 1946 and was directed to help ensure that the political initiatives being taken conformed with Commonwealth interests. One thing was clear to me from the start. Europe is a rocky outcrop of the Asian mainland. It can never attain the standard of living that its people desire without having close links with overseas countries and access to their markets and materials. This has been true throughout history. It happened with the Roman Empire, with the Crusades and in the colonial era.

Another thing was equally clear. Only if we in Britain—and the French and the Dutch—could broaden our industrial and financial base to something like an American scale could we hope to provide our former overseas associates with the level of investment and aid they needed, offer them the kind of money which alone would preserve or revive the links, economic and political, which had been established with them in the past. The French and the Dutch saw this sooner than we did. We have begun to see it. So have the overseas countries themselves. The Yaoundé Convention, the Lomé Convention and the association agreements between overseas countries and the Community are all examples of this. They value access to the European market and to Europe as an alternative source of investment to that which the Americans can provide.

Membership of Europe is not just a condition of our economic growth—perhaps even the maintenance of a liberal system in this country. It is the condition of putting reality back into the concept of the Commonwealth.

I turn to the political argument developed by the right hon. Member for Battersea, North. He said that nothing in the renegotiation arrangements had changed the fact that the Treaty of Rome remained basically a treaty, committing us to a federation and putting this Parliament under the authority of Brussels.

I said that nothing in the renegotiations had altered the system by which the Commission and Council can legislate for this country. I then said that if we try to make that democratic by giving those powers to Common Market Parliaments, we are committed to a federation.

I am glad that the right hon. Gentleman has corrected my oversimplification of his remarks. He has said that today it is not even democratic, but that if it were to be made democratic, it would commit us to a federation. I invite him to look back at history. When the so-called Imperial revival took place at the end of the last century the prophets of that revival—Dilke, Chamberlain and Milner—all aspired to an imperial federation. They wanted an imperial Cabinet of the self-governing Dominions and ourselves—an imperial Parliament. They had a vision of a federation.

The Commonwealth grew into a union which was a politically effective great Power from 1900 until the 1950s, but it did not develop on federal lines. It developed by a system of continuous consultation between Heads of Government, Foreign Offices, central banks, general staffs and even parliamentarians. It worked. There is a lot to be said for inter-governmental co-operation. It is possible that in the Commonwealth system we worked out something more applicable to the twentieth c