European Community (Enlargement)

3.34 p.m.

The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen)
I beg to move That this House takes note of Commission Documents Nos. S/763/78 and Addenda 1 and 2, and S/911/78 and Addendum 1 on enlargement of the Community. The two documents are the Commission's overview of enlargement—the so-called fresco—and the Commission's opinion on Portugal's application to join the Community. Enlargement, as I think we all recognise, is the most serious single issue facing the Community, and it is also a momentous political and economic issue for the three applicant countries, Greece, Portugal and Spain. As the Prime Minister said in answer to Questions, President Eanes of Portugal arrived on a State visit to this country this morning, and the House will, I know, join me in extending a warm welcome to him, representing as he does both our oldest ally and a future partner in the European Community. This House has demonstrated in a number of debates a strong commitment to enlargement of the Community, and it is one of the areas in the development of the European Community in which the United Kingdom can fairly claim to be amongst the leaders of opinion. Yet there is still insufficient awareness in this country and in the Community of the vitally important adaptation for the Community which enlargement will entail and which we need to discuss more openly. The accession negotiations are being undertaken on the basis that the applicants agree to accept the Community's rules, subject only to the various derogations and transitional arrangements which have to be negotiated. This is a similar pattern to the one which the House approved of in the British application. The Greek negotiations have made considerable progress over the last year. Broad agreement has been reached on Greece's integration into the industrial customs union, the European Coal and Steel Community and Euratom, as well on the principles of Greece's entry into the pattern of the Community's relations with third countries. Recently, the Com-  munity agreed on how Greece is to be incorporated into the institutions of the Community. The main outstanding subjects are agriculture, free movement of labour and the length of the transitional period. These are difficult questions since other member States have major interests at stake. However, it remains the hope and the expectation of the Government that the main subjects of the negotiations will be tackled by the end of the year, which has been the objective of both the Community and the Greek Government. Work on certain areas will still no doubt have to be completed in the first half of next year, but the Community should aim to sign an accession treaty with Greece by July. Allowing at least a year for ratification, that would mean probably formal entry on or before 1st January 1981. Member States endorsed the Commission's conclusion in its opinion on Portugal that the political arguments for starting negotiations were overwhelming, and negotiations were opened last month. While we hope that the lessons learned in the Greek negotiations will make it possible to proceed with the Portuguese negotiations fairly briskly, there are difficult economic problems which will have to be dealt with and the negotiations seem likely to take around two years. This would point to Portuguese entry perhaps in 1982. That date may slip, but I hope not. I am glad to say that the Commission's opinion on Spain is now expected before the end of this year—something for which the Government have been pressing hard. Assuming that it is ready in time, we should like a decision on the opening of negotiations with Spain to be taken by the Council of Ministers at its meeting in December. The negotiations will, again, take about two years, but we hope that Spain nevertheless will be ready to join at the same time as Portugal.

Mr. Alan Clark  (Plymouth, Sutton)
What about Albania?

Dr. Owen
The hon. Gentleman raises an interesting point. It would be the first Communist country to join the EEC. Relations with Albania have been rather low for quite some time, but we welcome  any encouragement from the hon. Gentleman to improve relations with any countries, particularly Communist countries.

Mr. Eric S. Heifer  (Liverpool, Walton)
My right hon. Friend says that we are rather keen to have Portugal, Spain and Greece in the EEC. I am not opposed to that—indeed, I am very much in favour of it. But, in view of the Prime Minister's statement last night and of the reports coming out that these countries are not efficient in their agriculture, so that we should be paying increasing amounts in order to subsidise the inefficiency of their agricultural policies, are these factors being taken into consideration when we talk about these countries joining the EEC? Within two years we are likely to be paying£15 per head of population in this country towards the common agricultural policy, and clearly that amount would increase further if Greece, Portugal and Spain came in with their present agricultural systems.

Dr. Owen
I shall deal with that later and in some detail, but there is a difference in that a large proportion of the agricultural cost to the Community comes out of northern agricultural products. One of the challenges for the Community is to develop better training in agricultural policy without having additional costs on top of the existing budget, but I will deal with this later. I am glad to say that the Commission's opinion on Spain is now expected before the end of this year, assuming that it is ready in time.

Mr. Gwynfor Evans  (Carmarthen)
Will the right hon. Gentleman concede that it is a strong point in favour of the admission of Spain that this formerly rigidly centralist, Fascist country has now democratised itself to the extent of allowing the Basque and the Catalan nations their own forms of government?

Dr. Owen
There is a strong tradition of decentralisation in European countries and in European Socialism, and I happen strongly to support decentralised Socialism. The Proudhonist tradition is very well represented in Spanish Socialist purport. But I think that this is not related to the Spanish application. If we are able to make progress on Spain's application,  it will mean that all three applications will be under negotiations. It is clear that a series of three accessions staggered over a long period would be deeply disruptive for the Community, and the delay could also lead to a wobbling in the Community's collective commitment, which still firmly exists, to enlargement. So if the House and the country want a Community of 12 I believe it is extremely important that the momentum to 12 must be maintained. The driving force behind enlargement to 12, as it was indeed with enlargement to nine, is political. I will deal with the economic issues later. The most obvious political imperative, one which we have all supported, is that enlargement should help to consolidate democratic systems in the three applicant countries with the immense political benefit that that would bring of greater stability in Southern Europe. Each of the three applicant countries sees membership of the Community as part of its return to the free, open, democratic European tradition. In Portugal's case in particular, membership of the Community is seen as essential in order to give that country the focus of stability which it needs after the loss of its colonies and the trauma of revolution. The political implications of enlargement of the Community as a whole will, however, be considerable. A Community of 12, provided it maintains cohesion, is bound to have more influence in the world than a Community of nine. Closer links with Latin America are likely to follow because of the close ties between Spain and Portugal and the countries of that continent. The Spanish-speaking world numbers 239 million and the Portuguese-speaking world numbers 136 million. Portugal and Spain both have an African tradition. That applies to Portugal in particular because of her former colonies in Mozambique and Angola. The meeting in June in Guinea-Bissau between President Eanes and President Neto of Angola was an important development greatly easing relations between the two countries, and this has been followed by a marked improvement in relations between Angola, Zaire and Zambia. We now have an ambassador in Luanda and look forward ourselves to greatly improved relations. But there could be less welcome political consequences. Involvement in Mediterranean affairs must not mean that the Community is dragged into the Aegean dispute.

Mr. Nick Budgen  (Wolverhampton, South-West)
Will the right hon. Gentleman explain how it is possible to have the advantages of a closer relationship with the Mediterranean countries while dissociating ourselves from the problems?

Dr. Owen
I am openly putting before the House one of the problems. It is the danger of becoming involved in the Aegean dispute. I was going on to explain why I thought it may be possible to avoid that. One problem will be to take care to ensure that Turkey does not become alienated from the Community. We have proposed ways in which Turkey can be kept closely in touch with the Community's work in political co-operation, and we shall be working hard for the success of the current efforts to reinvigorate the Community's association agreement with Turkey. We must reassure Turkey, whose democratic system also deserves and requires support. It must not feel threatened by enlargement. I do not believe it will if we handle the issue carefully. It would also be of benefit to all of us if the Cyprus dispute could be resolved before 1981. The economic implications of enlargement will, in general, impact more on the applicants than on the present Community. The applicant countries together will, for example, add only 10 per cent. to the Community's gross domestic product. But, while overall the economic consequences for the Community should be limited and acceptable, there will undoubtedly be problems for particular sectors and for certain Community structures. Perhaps the most obvious consequence for the United Kingdom will be the possibility of increased competition from low-cost industrial exports, especially textiles and steel, which are already sensitive areas for the United Kingdom. Although we intend to negotiate safeguard measures to minimise disruption during the transition period, we must recognise that some of our sensitive industries will inevitably face problems.  We must, however, bear in mind that in general our industrial exports stand to benefit from enlargement because of the easier access to the applicants' markets which enlargement will bring. Honourable Members may laugh at that, but we have been able to extend our industrial exports into the European Community, not sufficiently maybe, but there has been a steady growth of exporting into the European countries.

Mr. Dennis Skinner  (Bolsover)
There is a£2,000 million deficit.

Mr. Donald Anderson  (Swansea, East)
Will my right hon. Friend accept that, in so far as we drive a hard bargain in respect of our national economic interests in steel and low-cost textiles, we deprive the applicant countries of the political benefits on which they now base their case? Is there not an inherent contradiction between the so-called political and economic cases? How large a price economically are we prepared to pay for what may be not very substantial political gains?

Dr. Owen
That is a question of balance. I think my hon. Friend is referring, for example, to the extreme sensitivity in Portugal over textiles, but there is no use balking the fact that one has only to visit Lancashire, where I was at the weekend, to see that its textile industry has lost about 100,000 jobs already. It is an extremely sensitive problem, and the pace of adaptation of older industries facing this kind of competition has to be handled with great care. But it involves not only Portugal. There are many other poorer countries which will inevitably become involved in textile manufacture. They produce the cotton and they will want to be involved as an industrial country. We have to face this problem of the adaptation of our industries if we seriously intend to help the underdeveloped world. So it is a question we face with Portugal as we face it with Bangladesh, Sri Lanka and many other countries. The question is at what pace our industry can adapt in order to provide alternative jobs. The answer is that we have to find a balance between the perfectly legitimate national interest of safeguarding jobs in one's own country and the difficulties faced by other countries  with a much more difficult unemployment problem. These include Portugal and Third world countries. This is an issue which a number of Select Committees have been looking at recently and which the Government have been closely examining. There is no easy answer. It is a question of trying to balance the different claims.

Mr. Skinner
Does not the Foreign Secretary understand that the British people, quite apart from a few anti-Marketeers on these Benches, take the view that what is really happening as a result of our entry into the Common Market—and we have had five years in which to examine it—is that British taxpayers are seen to carry on their backs not only all the underdeveloped countries but also, it seems, the West Germans and all the others as a result of the recent report? Would not it make sense, even political and economic sense, even for Euro-fanatics, to delay direct elections while the other three countries joined the EEC?

Dr. Owen
I am not certain that great changes would be made in the economic balance between ourselves and the existing Community by delaying elections to the European Assembly. I know my hon. Friend's views on that. He has had ample time to argue his case. He opposed the Act through all its stages, but he was unable to succeed—

Mr. Skinner
We shall win one day.

Dr. Owen
I do not believe that it will be for the benefit of this House or our country for us to debate the issue of enlargement without facing up to the blunt economic facts. One of them is that the three applicants, especially Greece and Portugal, are likely to receive more from the Community budget than they put in, and this will mean an increase in our contribution.

Mr. Heifer
That is what we were saying two weeks ago.

Dr. Owen
My hon. Friend must not be too surprised if every now and then a Minister speaking from this Box agrees with him. That is perfectly possible. I hold strongly that the House should not enter blind into this commitment to enlargement. We should not make these decisions on the basis of trying to hood-  wink the House of Commons. There was a lot of legitimate complaint in 1972 and before when people felt—rightly or wrongly—that they were not being given the full facts. It is extremely important that we should have these facts now. The question is, how do we make the calculation? It is difficult to make anything more than speculative calculations of the amount, but, on the basis of various arbitrary assumptions, including no change in Community policies or in the levels of agricultural production in the three applicant countries—and that is a fairly major assumption—the extra budgetary cost to the United Kingdom would be of the order of£90 million to£115 million a year at 1977 prices. This cost has to be seen against the net£660 million which is the current estimate of our contribution to this year's budget. Those figures give some idea of the proportions. As my right hon. Friend the Prime Minister made clear last night at the Guildhall, the United Kingdom has the third lowest per capita gross domestic product in the Community and yet we are the second highest contributor to the Community budget. This cannot be good for the Community any more than it is for the United Kingdom. There are other anomalies, for example in the case of Italy as a net contributor on the one hand and Denmark and the Netherlands as substantial net recipients on the other. Some would argue that the figures we quote of our net contribution leave out of account the monetary compensatory amounts paid on the food we import from Europe. But these are not a resource transfer to the importing countries. It makes more sense to see them as a benefit to the exporting countries since they allow producers there to export at higher prices than would be obtained in an uncontrolled market. But even if all MCAs on our imports were added to our receipts, we should remain among the highest net contributors. For instance, if the calculations were done on the 1976 figures we should fall only from second largest to third largest contributor. We shall be working to achieve a better balance, especially in relation to agricultural expenditure, to curb the excessive United Kingdom net contribution. It is  now a serious problem to us, irrespective of enlargement. The budget generally is likely to come under strain after enlargement. More calls will be made on the Regional and Social Funds. The United Kingdom's share of these funds may therefore diminish. The integration into the Community of three economies each with an important agriculture sector will lead to more CAP expenditure, unless by negotiation we have already reduced CAP expenditure. In particular, we are trying to do that by reducing current surpluses.

Mr. Douglas Jay  (Battersea, North)
My right hon. Friend has told us, as did the Prime Minister last night, that our budget contribution is excessive and that it will rise even further if these additional countries join the EEC. Will my right hon. Friend say, therefore, whether the Government will now be putting forward to the EEC concrete proposals for remedying this situation?

Dr. Owen
We have already done so. We are in almost continuous negotiation over this whole issue. There is, first, the question of the price level, which comes up annually in the negotiations. Second, there is the question of the application of MCAs. Third, there is the whole question of the way in which one examines the budget. The Commission is at present considering the distribution of the budget and the way that it is financed, and it is coming up with some interesting proposals. There is also the question of the size of the Regional Fund, the size of the Social Fund and the value of them to the individual member States. This is being examined as part of the discussions on the European monetary system, with which I shall deal later, as part of the concurrent studies promised in the European Council at Bonn. The Commission is due to put forward proposals at the Brussels meeting in December. We shall then have some idea of whether it is prepared to advocate radical changes in these areas. Since my right hon. Friend the Prime Minister wrote to the general secretary of the Labour Party in September 1977, when he made a commitment to put as one of the Government's highest piorities a fundamental change in the distribution and the effects of some of the  financing of the CAP, we have been actively pursuing the matter. My right hon. Friend the Minister of Agriculture in particular has had some notable successes on the question of price.

Mr. Heifer
Will my right hon. Friend indicate, if we are not successful—it is a year since my right hon. Friend the Prime Minister wrote that letter—in getting some fundamental change which will benefit the British people, what we are to do? Is it not time that we said to the other EEC countries that, if we are unsuccessful and fail to secure the fundamental changes we seek, we shall renegotiate ourselves out of the Common Market at the earliest possible moment?

Dr. Owen
I do not think that that is the way to achieve the negotiating objectives that we have set. There are ways of achieving them within the Community. The first way is to make more of the other member States aware of the arithmetic. Until about a year ago, very few of the member States were aware of the disproportionate effect of the existing Community budget. We shall have to try to persuade them. If we find that we cannot, we shall have to use our negotiating strength in the many different forums in which it is possible to exercise it so that we see substantial changes. That is how the Community works. But I do not believe that we shall achieve success by threatening to come out of the Community.

Mr. Neil Marten  (Banbury)
Does not the Foreign Secretary realise that for the past 11 years attempts have been made to reform the CAP and that nothing fundamental has been reformed? We therefore want to know, should that state of affairs continue, as it is likely to because of the vested economic and political interests in the Common Market, what the Government will do. Surely, to state now what they would do would fortify their negotiating position.

Dr. Owen
I do not agree that it would fortify the negotiating position if we did that. One of the factor emerge is that some of the assumpt that were made it 1972 have been shown to be false. For example, it was said at the time that the proportion of the total budget devoted to agriculture would steadily fall, whereas it has steadily risen There will also be the stimulus of enlargement to make the Community rethink the consequences of the CAP. The integration into the Community of the three economies of the applicant States, each with an important agricultural sector, will lead to more CAP expenditure unless we make changes, and those changes will have to come by negotiation. We shall also have to try to reduce current surpluses. It is important, too, that surplus production by the applicant States is discouraged now, and it would be unrealistic and wrong to expect the expanded South of the Community to accept indefinitely the predominance in the budget of expenditure on support for northern agricultural products. Even in the existing Community it is noticeable that the Italian Government are becoming much more openly critical of the impact of the current CAP. The House must understand, therefore, that it is not only Britain that is beginning to realise that there will have to be structural and fundamental changes in the impact of the CAP. It would carry very little support in the Community to argue that the CAP has to be scrapped. That is not the Government's position. We are arguing that its impact on the individual member States needs to be changed radically and the balance altered. We must try to ensure that the disproportionate spending on northern agriculture is reduced. We simply cannot afford to increase expenditure on Mediterranean products in addition to the existing percentage devoted to northern agriculture. CAP expenditure already distorts the whole budget. It now accounts for 70 per cent. of spending. It is unacceptable to us for the distortion to be made worse. On the other hand, it is far to make economies, savings and reductions in subsidies to rich, prosperous sections of the agriculture industry. The House must recognise—with respect, some of my hon. Friends must recognise—that the agricultural sector in the Community contains some of the lowest paid workers in the whole of the Community. It is unrealistic and unsocialistic to expect them to make all these changes overnight without any adaptation machinery. It is of fundamental importance that the changes are made in a way  that especially protects the poorer peasant farmers. They should be given a period of transition and adaptation. We would expect that for our own agricultural workers were they to need it, but they do not, and our own industry were it to need it. We must enable the peasant farmers in the Community to have a period of adaptation. We must act generally in a Community spirit in the way that we deal with agricultural change, but change there must be.

Mr. Frank Hooley  (Sheffield, Heeley)
My right hon. Friend has been extremely patient, but he does not seem to appreciate that what is at issue is not prices or subsidies but the fundamental principle of intervention—the commitment to buy even if there is no market. Until that system is scrapped, my right hon. Friend and all the members of the Community may fiddle with prices and subsidies until they are blue in the face and they will make no difference. It is that fundamental fault that has to be overcome. The applicant countries will be trapped in exactly the same way as we are by that principle.

Dr. Owen
There is a difference of systems. We used to have the whole deficiency payments system. We preferred it. Very few people, whether on the pro or anti side of the Community argument, have denied that it would have been better to retain the old deficiency payments system. At least, that applies to many of us. I know that I do not take some Opposition Members with me. However, it was a fact of life that we could not get the deficiency payments system. The existing system of agriculture in the Community is not all at fault. The problem is that its application has allowed large surpluses to occur. It is not inherent in the CAP.

Mr. Hooley
It is.

Dr. Owen
I do not believe that to be so. In agricultural production we shall never achieve a perfect match between supply and demand. That is a fact of life. There will always be troughs and peaks. We must direct our attention to flattening them out and achieving a fairly even spread of production that is met by demand. It is unacceptable to any reasonable, rational man, of whatever country  or member State, that we should be increasing the prices of commodities that arc already in surplus.

Mr. Hooley
And production.

Dr. Owen
Yes, and production. That is an obvious fault in the existing CAP system, apart from the more fundamental issue raised by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley).

Mr. Leslie Spriggs  (St. Helens)
Is my right hon. Friend aware that many British people who voted to enter the Community did so on the understanding that the advice they were given on the CAP was correct? We were told that if we were inside we could change it from the inside. The basic economies of Spain and Portugal are based upon agriculture. Is it fair for the rest of the Community to tell Spain and Portugal that before they enter the Community they must change the basis of their economies? What are they to do?

Dr. Owen
That is a potential problem. That is why the House has devoted much attention to it. The support for Mediterranean products is at present extremely small. In entering the Community, Spain and Portugal will not be adding a very heavy commitment to the existing CAP. However, it is an open secret that they will wish to argue for a more generous support system. The question that we have to face is whether that is necessarily against our interests. Many of the products concerned are products that we import. If they can be produced efficiently and at low cost, that may be in Britain's interest. We should not believe that an efficient Mediterranean agricultural section, as part of a more balanced form of Community agricultural production that would come from the Community of 12, is necessarily against our interests. I do not believe that it should be. What is dangerous is that we shall carry into the Community a commitment greatly to increase expenditure on southern, Mediterranean products and no reform of northern agricultural products. If we do so, before we know where we are 80 per cent. of the Community budget will be devoted to agriculture. That will be in no one's interests.

Mr. Helier
That is right.

Dr. Owen
There are ways in which we can use our negotiating strength to prevent that.

Mr. Heifer
Such as withdrawing.

Dr. Owen
The threat to withdraw is one of the worst negotiating weapons to use. There are many other weapons. There are many aspects of the negotiating procedure where one member State can hold up progress in the Community. I do not advocate adopting a veto system. However, if it becomes of national importance that a change is made, we may have to consider taking that position. Other countries have acted similarly in the past. At present, we hope to be able to make progress by rational debate and discussion on the basis of a Community effort. I believe that we are making some progress. I am not claiming that progress is dramatic. All I am saying is that over the past few years the Government have made more progress on this issue than was made for a decade or more. It we hold to our approach, there is a good prospect of making change. Another problem will be the economic impact of enlargement on the Community's trading partners in the developing countries, especially in the Mediterranean. The latter will inevitably find the relative advantages that they enjoy under the overall Mediterranean approach eroded—for example, Maghreb and Mashraq countries. There is a need for the Community to work out with the countries most affected a strategy to overcome the difficulties that this will cause. It is necessary that the Commission recognises that we cannot continue making commitments all round the world and raising expectations, only to find that we are unable to fulfil them. That creates a serious problem. It is easy to start new policy initiatives, to open up new prospects that carry with them the belief that dramatic Community benefits will come to the countries concerned, only to find that they cannot be delivered. That is a recipe for frustration. It often damages our relationships with other countries. Commitments lightly entered into have a tendency to swing back on those who enter into them. As it is often the  Commission that is involved, it is often the member States that feel the backlash. It is difficult to say at this stage what will be the impact of enlargement on the Community's policy towards the developing countries generally. I know that that is a subject of concern to many hon. Members. However, opposition to the Community's generally liberal outlook may grow since the three newcomers have been traditionally more protectionist than the Community. In addition, they may see themselves as having a claim on aid funds. We have seen that in the discussion over textiles. They may see themselves as having a claim at least comparable with that of some present recipients. The new Lome arrangements that are being negotiated and decisions that we are seeking to increase aid to non-associates should ensure that no harm is done to the Community's development policy over the next few years at least, but the picture in the long term is less clear. The institutions of the Community will also need to be examined to improve their efficiency. I do not personally believe that that will be resolved simply by increased use of majority voting, which has often been claimed by some other member States as a magic cure for all the problems of the Community. Effectively, there is already a system of informal majority voting. Member States in a clear minority have to have regard to the interests of others. The Community in fact functions by a complex series of implicit trade-offs. Eroding this by putting issues to the vote on frequent occasions could lead to much more widespread invocation of the Luxembourg compromise. Much more important, it could lead to an erosion of the spirit to seek compromise, which is one of the cements of the existing Community. The real need is for the Community to be able to work out decisions informally, with proper regard to the political realities of the Community. Decisions cannot be forced through mechanically. We shall be sceptical about making any formal changes in the institutions, particularly as regards majority voting.

Sir Anthony Meyer  (Flint, West)
I do not in any way dissent from what the right hon. Gentleman has just been saying, but will he admit that the Commission has a valuable role to play in initiat-  ing a constructive compromise that would take better account of the long-term interests of the Community than a mere process of horse trading? Does the right hon. Gentleman recognise the distinct role of the Community in that area?

Dr. Owen
Yes, I said that I did not think that we should change the balance of the institutions, and. I am going on to describe this. But I see the role of the Commission as the guardian of the treaties, so to speak. The Commission holds an overall responsibility, and by its very nature it has to be somewhat legalistic in its interpretation of Community obligations and to hold the Community close to the treaties. That is a Commission obligation. But there is satisfaction about the efficiency of the Community, and the French proposal for a committee of three to look at the efficiency of the Community could be valuable, particularly if the people chosen are practical, political realists and not theologians. The institutions need streamlining. We made several suggestions for improvement during our presidency. Most of the Community's problems are already there and need solving anyway, irrespective of enlargement—the budget. which is top-heavy with agricultural spending, the inadequate regional policies, the traditional industries already in difficulties, relations with the Mediterranean countries already under strain, and the decision-making process, which is at times slow and cumbersome.

Mr. Douglas Hurd  (Mid Oxon)
It might save time if the Foreign Secretary, before he leaves this point, could tell us exactly what is the state of play on the French President's proposal for the "three wise men".

Dr. Owen
The Council of Foreign Ministers will be discussing it at the next Council meeting, and it will come to the European Council. We had an informal discussion about it at a private weekend at Schloss Gymnich, in. Germany. I think that we shall probably reach agreement, but several different suggestions are being put around. One is that the representation should be from the members of the existing institutions. I do not think that that really meets the objective of the French, which was that they should be people who, although experienced in the Community, could take a more detached  look at the workings of the Community, rather than people who are deeply involved in it at the moment. A lot depends on having the right people. One has only to see what happened to the Tindemans report to be a little sceptical about what may happen when suddenly we have the production of a report from three people. Incidentally, I think that women could be included, and therefore I dislike the term "three wise men". The question is whether they will hold the confidence particularly of the Heads of Government of the nine member States. Will there be a response to their suggestions in a way which will lead to some reform? I think, therefore, that the key question is the people who are to be entrusted with this task. I said that I do not think that all these problems will come only with enlargement. Enlargement may exacerbate these problems and make it more urgent to solve them, but it will not of itself have created them. I hope that in practice we may find—as, indeed, to some extent we are already seeing—that enlargement may act as a stimulant. I believe that the Community functions better than most of its critics recognise. I have always held the view—and I hold it ever more strongly —that we endure in the Community a surfeit of apolitical comment, based on an unreal dream, totally devoid of reality, of how member States should act, instead of taking account of how member States are likely to act. The actual performance of the Community, judged by any other international institution which I know or have worked with, is very good. Despite all the problems of economic recession and all the difficulties that we have faced over the last four or five years, the Community has held together and is making effective decisions. I do not hold the belief that it is in collapse, and we would do a lot better if we had a little less Euro-crisis talk coming out of Brussels. The role of the presidency is increasing and will, in my view, inevitably increase. It has a key influence, for better or worse, on the handling of EEC business, both within the Community framework and in political co-operation. The Minister, or the permanent representative in the chair at any given time, has a special  responsibility to assess the development of all States' attitudes and to identify the political scope for compromise or for new solutions. That is a slightly different role from the role of the Commission. Some ideas have already been put forward, such as using the preceding and following presidencies to support the current one in a "troika" system. That is encouraging and certainly needs to be looked at carefully. It would probably help most in political co-operation, where some measures of continuity and some buttressing of an incoming presidency could be particularly helpful, because there is not the usual Community institutional framework for support and one has to rely entirely on the support of the member State. The Council Secretariat is at present a body of permanent officials serving the presidency in controlling the administrative machinery of the Council. I believe that we need some additional means of support for the presidency in a much more political way, helping with the formulation of compromises and stimulating initiatives at both Council and at Coreper level. This could be done by a small group, to keep the Council secretariat more closely in touch with the political realities in capitals. The group should be chosen partly from people who have served closely with Ministers. Such a group could make a contribution for which no part of the existing machinery, including the Commission, is precisely fitted at present. We made a start during our presidency on developing the role of the secretariat in working out presidency compromises. Properly developed, such a group could, in my view, be a factor for continuity, and it could also overcome some of the disadvantages which undoubtedly exist with a six-months rotating presidency, without affecting the need for all member States to have a term as president. I do not see any way in which that can be changed. Every member State will want to hold the presidency in its turn. I believe that this would be a natural development and that it could powerfully reinforce the presidency, without challenging the role of the Commission. It would provide an essential element of continuity in the exercise of the presidency. It is extraordinary that in recent months in Community discussions and negotiations, which are still in progress, the implications for the Community of 12—as opposed to the Community of nine—of a European monetary system have been virtually ignored. It would be a great mistake to limit the current consideration of EMS to the present members of the Community. We must look at wider needs and wider concerns, including those of the candidate members. In the EMS discussions, the British Government have throughout insisted on the need to avoid putting the weaker currencies at risk from major speculative attack or of laying the burden of adjustment only on the weaker members. This applies to those EEC countries which are not currently members of the snake. It will apply even more to the three candidate members, of whom the Greek Government have already made clear that they would like to include the drachma in any European monetary system. All that our Government have said about the need to make the EMS truly durable and comprehensive applies with equal force to the new members. We wish to see a scheme which would be capable of accommodating weaker currencies without self-defeating obligations on them and which would be accompanied by a general improvement in the Community's budgetary arrangements, so that they contribute to convergence in the economic performance of all the members. If it does not do that, it cannot be good for the Community. If it contributed to convergence and produced currency stability, we should welcome it. The issue of a European monetary system is not, in my view, an issue of Euro-principle but is one to be judged on practical, technical grounds. There is at present too much politics in its presentation. A scheme does not become viable merely by adding a dressing of Euro-terminology—EMS, EMF and ECU. The most important underlying problem facing any EMS is the fact that the economies of the existing member countries diverge, especially in their inflation and growth rates, and the working of the Community budget does nothing to promote convergence of economic perform-  ance. Indeed, it is a factor for divergence in that it transfers resources from some of the poorer to some of the wealthier member States. In the light of existing disparities of economic performance, excessive rigidity of exchange rates, which could have a deflationary impact on the weaker economies, could make it harder to achieve the convergence of performance at the highest possible level of activity which is essential for the long-term future of the Community. There is a requirement for adequate flexibility in exchange rate management within the system to guard against this danger. There is also a requirement for positive resource transfers to contribute to convergence. Currency stability is a desirable objective. Some argue that this can come only from full-scale monetary union, backed by large resource transfers. We have to ensure that a European monetary system does not fall between two stools, on the one hand imposing undue rigidity on exchange rates, with deflationary effects on the weaker economies, while on the other hand failing to grasp the nettle of resource transfers adequate to overcome any such adverse impact. In trying to establish the necessary balance between exchange rate rigidity and action to compensate the weaker economies, we have to look at the actual situation in existing member States and, I believe, look at the three applicant countries. In the past year Portugal has devalued its currency by about 30 per cent., Spain by nearly 25 per cent. and Greece by nearly 10 per cent. against the European unit of account. Germany has revalued by 2·9 per cent. That gives some idea of the market pressure for changes in cross-European exchange rates. The likely need for future changes is indicated by the differing inflation rates: Portugal 8·9 per cent., Spain 21·3 per cent. and Greece 13·4 per cent.—and Germany currently 2·7 per cent. These facts reinforce the conclusion that a narrow, rigid European monetary system modelled on the existing snake will not be in the interests of a Community of 12. The overall effects of all Community policies must increasingly be to promote convergence of economic performance between the member countries in contrast with present policies, such as the CAP, which are not designed to work for convergence.

Mr. Nigel Forman  (Carshalton)
I am trying to follow the Secretary of State's argument as closely as I can. In so far as differing inflation rates are a major factor working against the convergence, which we all want to see in the European Community, and in so far as many Governments in Europe, including Her Majesty's Government, are now using good old-fashioned deflationary techniques and credit squeezes in an endeavour to combat inflation, why is it not sensible to have a European monetary system which puts some emphasis at least on deflationary mechanisms to bring about that convergence?

Dr. Owen
I am not saying that it is impossible to bring down inflation within a European monetary system. I do not hold that view. Properly constructed, I think that if we have the flexibility which I have suggested we will need on exchange rates and the resources available, it could add to the ability to bring down inflation. I think that a measure of currency stability is helpful. For instance, when our exchange rate was under considerable pressure we saw that it was not long before the consequences of the pound falling fed through under inflationary pressures. I think that dramatic, rapid falls in the exchange rate can have a very severe impact on inflation. We have tried to approach these negotiations on a strictly practical basis. I think I can claim that my right hon. Friend the Chancellor of the Exchequer, in the way that he has negotiated and developed his argument in the Finance Council and elsewhere, has found an increasing amount of sympathy for the factual basis of his argument. I think that is also reflected in the division of opinion which is beginning to be clear amongst economists and bankers in this country. The EMS is a highly complicated, technical and economic issue. I think that from the way the Government have approached it, it is clear that this is how we see the issue. We have strongly resisted judging it in terms of whether one is or is not a believer in the European Community. Within the European Community the seriousness of our negotiating position is becoming more apparent. I think that people must also take account of the fact that very few things  would do more harm to the European Community in this country than if Britain were to enter into a badly worked out monetary system which was not viable and did not last and we then had to withdraw, as happened on previous occasions with the snake. In order to go in, in the debates in this House we would indulge in a tremendous amount of oversell. That is always the case when a controversial issue comes in. The resultant feeling of let-down in a failure would work strongly against the European Community and those who support it. I hope that those who look at these issues will do so not from a polarised European view but from an objective evaluation of whether it is in the interests not only of this country—that is obviously very important—but of the Community. I think that one of the factors—I say only one—is whether the construction of a monetary system takes enough account of the three applicant members, all of whom have considerable problems and a wide spread of inflation. I do not wish that to be construed as arguing that it is impossible to bring down inflation within the European monetary system. The Prime Minister for a long time—even before the European monetary system was advocated—argued for currency stability. Britain has always said that currency stability should come in a wider framework. It may be that the European monetary system is a start, but there is also a danger that it could close off a wider arrangement for currency stability. The more we look at the EMS, the more we believe that the arguments of the last decade or more for fundamental reform grow ever stronger. I think it is important that policy changes should be made to contribute to convengency before enlargement takes place. All the requirements which we have argued an EMS must meet in order to be lasting and effective are reinforced when considered in the context of enlargement and the needs of the candidate countries. Lastly I turn to the particular case of Portugal, since one of the two documents before the House is the Commission's opinion on Portugal's application. The Portuguese economy is still fragile. The Community must be careful in negotiating the terms of Portugal's  entry not to overstrain the Portuguese political and economic system. Too rapid an opening up of the Portuguese market to Community exports could damage agricultural production, blight developing industries, aggravate the balance of payments problem and give an upward twist to inflation. The member States must, of course, safeguard their own interests. We shall want to be particularly careful not to aggravate our own problems with textiles, which we have already discussed, and fisheries. But in the negotiations with Portugal the Community must at all times bear in mind political factors. Political and economic decision-making must not run on separate tracks. I am confident that the economic problems of integration can be overcome given sufficient awareness of Portugal's needs. One essential will be an appropriate transition period, and we shall have to bear in mind Portugal's financial needs. The members of the Community are already helping Portugal through both the two financial agreements signed since 1974 and the IMF. Portugal will also benefit through the Community budget. With the other member States, however, we shall remain ready to study ways in which the Community might complement Portugal's own efforts to rehabilitate its economy.

Mr. Nigel Spearing  (Newham, South)
My right hon. Friend mentioned Portugal and, earlier, the importance of peasant economies. About 28 per cent. of the working population of Portugal are in agriculture, and there are even more—35 per cent.—in Greece. But in none of the documents before us is there any examination of the differences in agricultural prices of those commodities which are grown both north and south of the EEC. Will my right hon. Friend undertake that there will be a study of the differences in prices so that the transitional period, to which he has just referred and which is of particular importance to Portugal, can be looked at in a realistic way which will not impose social strains on the peasant economies to which he has referred?

Dr. Owen
I should like to look at that matter. I should like to meet my hon. Friend's point, but I should like to consider whether it is more appropriate that  we should argue that it be done by the Commission so that it would be in an overall Community document. However, I am prepared to look at that matter, and I undertake to write to my hon. Friend about it. While we recognise that Portugal's entry will create special problems, our support for Portugal's application is firm. We admire Portugal's courageous efforts to break with the past and her success in sticking to the democratic path, despite some heavy buffeting. I urge hon. Members to remember that that past was not so long ago. The Community must hold out a welcoming and steadying hand. For Britain, that will be merely the continuation, in a new guise, of our historic relationship with Portugal. I look forward very much to discussing the prospects for future cooperation with President Eanes and his advisers. With the opening of negotiations with Portugal and with the crux of the Greek negotiations soon to be reached, the Community is now being obliged to face the practical consequences of its political decision to accept enlargement. There is a danger of having too much rhetoric. That must pass. We now need to look at the detail of the enlargement and its implications for this country and the Community in general. We in this country have examined our stance on enlargement dispassionately and, after the first flush of enthusiasm, we still believe that, despite the cost to us, enlargement is historically inevitable and politically desirable.

Mr. Jim Craigen  (Glasgow, Maryhill)
To what extent has that consideration taken account of regional problems within the United Kingdom? It seemed inherent in my right hon. Friend's earlier remarks that he felt that the Regional Fund within the Community was inadequate. Therefore, with the addition of the three candidate members, will there not be a far greater need in future for the development of an adequate regional policy?

Dr. Owen
It is very important to safeguard our existing share of the Regional Fund, which would argue therefore for an expansion of the Regional Fund at the time of the three applicant States joining.  Also, we can look at alternative ways of using both the Regional Fund and the Social Fund. Britain has been pretty successful in using these. However, I do not want to overstress the role of the Community in regional policy. Essentially, this will always be a matter primarily for national Governments. If one looks at the overall percentage of the budget that we spend on regional aid, one finds that by far the largest amount comes from the national budget. But this is a factor which we have to take into account. In conclusion, I say that it is important that we should discuss this issue openly. I have given way to a lot of hon. Members because I know that there are genuine concerns about this matter. We should not enter blindly into a commitment on enlargement. We should not take only political factors into account. We should take account of the economic consequences for this country and for the Community as a whole. But behind this matter is a fundamental fact. Is the European Community to be open to any democratic State in Europe which wishes to join? By making the decision to go for a Community of 12, we are saying that the old arguments of a narrow, small, tightly knit Community are over and that we are accepting that there is a historic obligation on the Community to allow the entry of any democratic applicant State which wishes to join the Community. That is a major decision. It will have an impact on the development of the Community. It will change it. I believe that it will not weaken the Community. There are some of my hon. Friends who argue at times that this is one of the advantages of enlargement. I think that it will not weaken the Community and I do not believe that it should weaken it. However, it will be a different Community.

Mr. John Farr  (Harborough)
I apologise for missing part of the right hon. Gentleman's speech. From his remarks on the European monetary system, the House recognises that the Government are being rightly cautious about the particular course they will take, with the advantages and disadvantages it will have to Britain. However, will the right hon.  Gentleman say whether any particular consideration has yet been given to the special situation of the £ sterling in relation to the Irish pound, and what research and what investigations are being conducted now into the consequences, for instance, from 1st January of Britain staying without the EMS and the Republic of Ireland going in?

Dr. Owen
I am trying to confine this debate to the enlargement and the Commission papers which we have in front of us. The Lord President has already promised the House a debate on the EMS—I know that it is hoped to have that fairly soon—in which an important element obviously would be a discussion of the effects of the EMS on existing member States, rather than on the forward projection to the Community of 12. In that, the impact on Italy and, in particular, Ireland—because of our special relationship in the currency—will be discussed. I know that my right hon. Friend the Chancellor of the Exchequer would be very happy to deal with this subject. However, if the hon. Gentleman will excuse me, perhaps I may say that it is a subject which we are discussing at the moment but it is not something on which I would like to prejudge whatever the Chancellor might wish to say.

Mr. Spriggs
Will my right hon. Friend give way?

Dr. Owen
No. In the interests of the House, I think that I have given way enough. I wish to conclude what I have to say. I think I have said enough to ensure that this debate will concentrate—I hope that it will—on the issues of enlargement. I want to make it clear that I have considered all the factors, and I still remain of the unshakable view, and the Government's view is unwavering, that we should support the enlargement of the Community and that we should plan now to move from a Community of nine to a Community of 12.

Sir John Rodgers  (Sevenoaks)
Before the right hon. Gentleman sits down, perhaps I may ask him a question.

4.34 p.m.

Mr. Douglas Hurd  (Mid Oxon)
It is timely that we should have two major debates on Community matters in this week. The Foreign Secretary ranged very widely this afternoon, although he tried to draw himself in again towards the end of his speech. I make no complaint about that, because much of what he had to say was very interesting. In our view, however, tomorrow will be the occasion, during the debate on the six-monthly report, when it will be more in order to analyse at length the question of the Government's pledge in the Prime Minister's speech last night and the story in The Guardian. When that opportunity arrives tomorrow we shall make full use of it. On enlargement, first, I join the Foreign Secretary, on behalf of the Opposition, in extending the welcome that he gave to the President of Portugal. Thinking of recent history, it is a great thing that a president of a democratic Portugal should be here on a State visit. Before going into the questions posed by enlargement, perhaps I may voice a general question about the present burden of taking and making of decisions inside the Community. For some time there was a cliché, current among critics and, indeed, some friends of the Community, that it spent its time fiddling about with little issues and never concentrated on the big ones. At the moment, however, an enormous number of negotiations and decisions are on the boil, and they are of great consequence. There are the three sets of negotiations which we are discussing today, and the documents show how complicated and difficult they are. There is the EMS proposal; there is the renegotiation of Lome; there are the continuing trade and tariff negotiations in which the Community negotiates: there are also the efforts by the Commission to make sense of the common agricultural policy. There are many other things going on, and they are all major enterprises of the Community. I am just wondering whether something needs to be done to make sure that this all happens in an orderly process. The Commision, contrary to what we are often led to suppose, is not an enormous organisation. It is about the size of a county council, and I cannot think of many county councils which are at the moment exposed to such a burden of decision making. I am certainly not suggesting that the Commission should be expanded, but there is, perhaps, a case for its being more flexible regarding the use of its manpower and resources, and occasionally shifting people into more important sectors and away from some of the fiddly little things that they are obviously continuing to do. On a subject which is, perhaps, more within the purview of the Foreign Secretary, I ask a similar question about the Council of Ministers. Does the Foreign Secretary feel that in the coming weeks and months Ministers will make the best use of the time which they have available? I was a little disturbed by a report of a remark by the present President of the Council of Agricultural Ministers—the German Minister, Herr Ertl—who said that there was no time for his Council to discuss what struck me as a highly important subject, namely, the reduction of dairy surpluses, because there was so much going on. Will the Minister who replies to the debate please comment on that? Will he give an assurance that the Council of Ministers, in examining its work load over the next few months and with all these major enterprises in hand at the same time, is setting about its work in an orderly way and is leaving aside some of the smaller matters that could clearly wait—if, indeed, they are necessary at all—and concentrating on making a success of the massive agenda of big matters which it has before it?

Mr. Alan Lee Williams  (Hornchurch)
I wonder whether the hon. Gentleman would spell out in a little more detail his remarks about the Commission? My right hon. Friend described it as the custodian of the Treaty of Rome and said that inevitably some of its decisions were legalistic. How does the hon. Gentleman see the future role of the Commission? I think that it ought to be a little more than the description given by my right hon. Friend.

Mr. Hurd
I was on a rather narrower point. I am sorry if I have misled the hon. Gentleman. I just have the impression, from visiting the Commission and listening to Ministers, that it is rather inflexible in its use of the people it has and that it is extraordinarily difficult, even for the Commission as a whole, to switch people to a department which is under  pressure and away from something which they have been doing for years. We know of Government Departments in this country which are not famous for flexibility in this respect. However, I believe that this is something which may be for the three wise men. Perhaps it is part of a wider examination such as the hon. Gentleman suggests. My point was rather more limited. It was about the next few months and the importance of the Commission concentrating on what is important. I turn to the question of enlargement. do not intend to make a long speech because, unlike the Foreign Secretary—who I think was away at the time—I took part in the debate which we had last May on this same subject. The principles of our attitude have certainly not changed in the last few months. Therefore, I intend to be very brief indeed. In Madrid the other day my right hon. Friend the Leader of the Opposition made it clear that we support strongly and warmly the applications for membership from Greece, Portugal and Spain. We support them because we accept the political arguments which led those three countries to put their applications forward. If anyone had come to this House five or six years ago and told us that those three countries would have thrown off Right-wing dictatorships and at the same time rebuffed the effort to impose Left-wing dictatorships, we would have said that such a person was hopelessly optimistic and that the world was not like that at all. Yet that is what they have done. When, after that achievement, they tell us that in order to maintain their own democracy and achievements they need to join this institution, which they regard as the nucleus of democracy in Europe, I do not think we really can say that they do not know what they are talking about in terms of their own countries' interests or that we are so busy and uncertain about our own affairs inside the Community that we simply cannot take them on. That would be an entirely wrong and cowardly attitude to take. I was, therefore, much encouraged by the news which the Foreign Secretary gave about the pace of negotiations, particularly with regard to Spain, because there was a report that the Commission's  opinion might not be ready until next year. That would have been disappointing to the Spaniards. It is, therefore, good news that it is now expected. I hope that the Government will maintain the impetus in securing that opinion and thereafter will ensure that the Council of Ministers takes the decision fairly early.

Mr. Craigen
I am sure that we all join the hon. Gentleman in wishing to encourage the three countries in the development of democratic institutions. I wonder what his views would be should any of the applicant countries subsequently err and fall from democratic grace. Would the hon. Gentleman envisage a system similar to the Council of Europe, where the member country lapsing into dictatorship would subsequently be excluded from membership of the Community?

Mr. Hurd
That is a point that has been discussed in the House. Indeed, we pressed the Foreign Secretary on it during the early part of this year. I think it was in Copenhagen that the European Council adopted a declaration that bore on this point and made it clear that, whether one was talking about existing members or about the new members, it would be inconceivable that a member State which fell into dictatorship, either of the Right or the Left, could in practice continue as a member of the Community. The actual mechanics of what one would do would obviously be difficult, but what has been made clear—it was important to make it clear this year, before the new arrivals—is that one cannot imagine that a State practising either Fascist or Communist policies could be at home, or could remain, in the Community. I should like to follow what the Foreign Secretary said about Turkey. This is a matter that we raised in the May debate. The Minister of State, who opened that debate, talked about his desire that there should be greater and more effective political links between the Community and the Turks. Today the Foreign Secretary spelt that out a little more in terms of political co-operation. This is absolutely crucial, and I hope that when winding up the Minister will say a little more about it. It is really very important that the application of Greece, which we support,  should not have the effect of bringing Turco-Greek disputes of various kinds into the Community or alienating and turning the Turks away from Europe and, indeed, from the West. It is not just Cyprus. There is a whole range of problems, which the Foreign Secretary summed up as Aegean problems. There is also the fact that Turkey's association agreement has lost some of its importance, as the Community has gone on making agreements around the Mediterranean with other countries that produce goods that Turkey also produces. I feel that there is a danger that the Community will not pay enough attention to Turkish sensibilities. "Sensibilities" is a weak word, because one is talking about a perfectly reasonable concern by the Turks about their own interests and their place in the world. It is doubtful whether the Community by itself, however wise it is, can really answer the Turkish questions to the satisfaction of the Turks. There is a very strong case for a Western initiative and an attempt to work out with the Turks, across the whole range of the West's dealings with Turkey—economic, military and political—what kind of place Turkey wants in the Western world over the next two or three decades. This is a problem that we may neglect in this country, but it is one that we neglect very much to our own peril if it goes wrong. The economic aspects of enlargement were dealt with fully by the Foreign Secretary and there will be much to chew over in what he said. Obviously, for the applicant countries the adjusting of their economies to life inside the Community will be very complicated and difficult. Likewise for us—this has perhaps become even clearer since May—the call on resources that enlargement brings is again a major problem. I very much hope that the Foreign Secretary is right in saying that in the case of Mediterranean products we shall not repeat some of the follies that are still embarrassing us and making the Community's life extraordinarily difficult with regard to northern products. Although the economic side is difficult both for the applicant countries and for the Community, what is urgently required is not the economic answer but  the political gain and assurance. It was, therefore, encouraging to find from the information that the Foreign Secretary gave that fairly early dates now seem in sight for membership of the Community by the three applicant States. I should be grateful if the Minister would confirm that by that the Foreign Secretary means membership with full political rights, in the same way as we and Denmark became members with full political rights at the beginning, and not at the end, of our transitional periods. This is obviously a very important point for the applicant countries. It would then be entirely reasonable and, I suppose, inevitable—although the Foreign Secretary did not spell this out—to have rather long transitional periods to cope with the economic problems. There could, perhaps, be transitional periods without absolutely fixed dates. We had a rigid series of dates by which we moved to A, to B, to C. There may be a case for having a more flexible arrangement by which dates can be altered by agreement if need be. I see the dangers of that, but I should be grateful if the Minister would touch on the matter when he replies. Some of my hon. Friends, some people in the Community and perhaps some in the Commission itself are worried that enlargement to 12 will slow down the impetus of the Community of nine. of course it will. There is no point in being mealy-mouthed about this. But it is encouraging to find that the applicant States are obviously keen to make a go of it. They themselves do not want to slow down the impetus. As the Foreign Secretary said, it is simply that the Community will have to change. To some extent this will mean thinking afresh about problems to which we have not already found satisfactory answers. Therefore, it will not be entirely new thinking. It will be thinking which we would have had to do anyway, because some of the ways in which the Community institutions are at present functioning are not satisfactory.

Mr. Spriggs
Since my right hon. Friend the Foreign Secretary did not give any specific proposals for amending the CAP, will the hon. Gentleman—who speaks on behalf of the Conservative Opposition—say what a Conservative Government  would do by way of specific amendments to the CAP?

Mr. Hurd
Not today because it would not be in order for me or the Secretary of State to do so, but I hope to touch on that aspect tomorrow. I was expressing the hope, with which I think the hon. Gentleman will agree, that it could not be sensible to repeat, with Mediterranean products, the full panoply of intervention and relatively high prices, fixed year by year, which has caused so much difficulty for dairy products. Whatever side of the argument we are on, we on the Opposition Benches, and the House as a whole, have pressed throughout these European debates that the Community has to live in a world wider than its own boundaries. From time to time tests present themselves, propositions arise and there are moments when that conviction, which we all express in terms of rhetoric, has to be tested in terms of practice. It is a test of energy and imagination, and it is a little difficult for this country to summon up those virtues in respect of Europe at the moment. The applications and the proposal for enlargement are such a test, and the passing of that test by the Community should be high among the priorities of Europe.

Mr. Farr
On a point of order, Mr. Deputy Speaker. I am in some difficulty in relation to a document that we are considering. It is a letter dated 19th May 1978 from the Commission of the European Communities, signed by Mr. Natali. It is document no. S/911/78. I wish to draw your attention to the fact that nearly half the document—about 30 pages—is in French. The section is headed "Liste des tableaux" which, I presume, is a list of tables. The verbiage used in the list is most complex and difficult to understand. I should like you to consider this important point, Mr. Deputy Speaker. I fail to see how the House can properly consider the matter unless the document is translated, as it should be under the terms of an earlier instruction of the House.

Mr. Deputy Speaker (Mr. Oscar Murton)
I heard what the hon. Gentleman said, but I must tell him that the presentation of the documents to the  House was properly moved. The subject matter is no concern of the Chair.

Mr. Marten
Further to that point of order, Mr. Deputy Speaker. Does your ruling mean that if we are to consider French documents we may speak French in the Chamber? That is the logic of your ruling. Si c'est possible, je vais le faire.

Mr. Deputy Speaker
Order. That may appear to be the logic, but making a speech in French is not in order.

4.55 p.m.

Mr. Eric S. Helfer  (Liverpool, Walton)
It might be a good idea if, before speaking French, some hon. Members spoke English. That would help us considerably. I am not opposing the applications of Portugal, Greece and Spain. We have to look at developments in those countries with gratification. Only a short while ago, they were under Right-wing, Fascist dictatorships with no free trade unions or political parties. I wish that Conservative Members would understand that I am as opposed to the dictatorship of the Soviet Union as I am to Fascist countries. We are talking about three countries which were under Right-wing, Fascist-type dictatorships. That does not mean that one automatically supports the type of anti-democratic dictatorial regime that exists in so-called Left-wing dictatorships in Eastern Europe and elsewhere. If some Conservative Members would express their detestation of Right-wing dictatorships as strongly as some of my hon. Friends express their opposition to so-called Left-wing dictatorships, it would be good for democracy in this country. There can be no double standards on dictatorship versus democracy. It is regrettable that we have to say this so often before it penetrates the minds of certain Conservative Members. It is important that we should recognise the tremendous changes that have taken place in the three countries with which we are concerned, particularly in Spain and Portugal. It is also gratifying that the dictatorships in Spain and Portugal were removed without violent revolution. There was physical violence in the colonial countries of Portugal, but, while the military brought about a fundamental change in Portugal itself, there was little  violence other than that which is inevitable when such fundamental changes take place. As a democratic country with a democratic Socialist Government, we have to concern ourselves with the maintenance and development of democracy in those countries in order to sustain them against anti-democratic forces of the Right or the Left. It is important that we should declare our support in principle for the applications of those countries. That does not mean that I am now a Common Marketeer, but I believe in democracy and it is right for us to help those countries in every possible way. The point has been clearly underlined by an old associate of mine from many years back, Antonio Giolitti, who says in his report to the President of the Council of the European Communities: "The Community will find itself less homogeneous as a result of the different political, economic and social structures of the new members, and this will make it more difficult to reach joint decisions and apply them properly." I welcome that because it is much in line with the concept of the Labour Party conference of a looser type of Common Market rather than the bureaucratic structure which was designed for six countries and was changed only slightly when the Community grew to nine members. Obviously it will have to change much more when it has 12 members and, since that will be in line with the thinking of my party, I welcome that development and favour enlargement for the reasons spelt out by Antonio Giolitti. It is clear that there are major problems to be faced by the Common Market. In the very long document submitted by Mr. Giolitti, the section on agriculture says: "The Mediterranean area is by no means homogeneous as regards physical characteristics but in addition to its characteristic climate it does have a number of common structural problems. In general, cultivation methods are labour-intensive, productivity per worker is low, average farm size is very small in comparison with the average size of northern European farms and underemployment is widespread. Lack of irrigation is also a problem in many areas.Enlargement would bring into the Community three countries where agricultural accounts for a very important part of total economic activity. The number of persons engaged in agriculture in an enlarged Community context would, in fact, be more than doubled". Let us see precisely where we stand. I might well have reservations about some parts of the speech made by my right hon. Friend the Prime Minister at the Guildhall last night, but the parts dealing with the common agricultural policy were first-class. It is nice to find the Prime Minister and my Front Bench catching up with what some of us have been saying for a long time. I always think that there is room for conversion on the road to Rome and that any sinner that repenteth is worth taking to one's bosom. It is nice to think that my right hon. Friend and others of my right hon. and hon. Friends are coming round to a view that some of us have held very strongly. I should like to make an aside—I almost said "snide comment"—on this matter: what price our renegotiation of the CAP when we were coming up to the referendum? We were told then that the CAP had been renegotiated. Some of us said at the time that it was very difficult for us to see where it had been renegotiated. We know now that the renegotiation of the CAP was in the main a con. I have said that we must welcome the three new countries into the Common Market for the political reasons that I have advanced. But their entry will intensify our agricultural problems. Where will our contribution end unless there is a fundamental change in the renegotiated terms?

Mr. Alan Lee Williams
My hon. Friend says that he is arguing the political case for enlargement, which I fully support. Are he and his friends therefore prepared to accept the economic logic of their position?

Mr. Heller
I was coming to that. I have never argued that I am opposed to European unity. I think that my hon. Friend will grant me that. I have never been opposed to the Common Market on the grounds that we have to associate with Frenchmen, Germans, Italians, Belgians, Dutch, Danes and so on. I have always been in favour of an integrated, Socialist Europe, and I still am. I believe that Europe's future must be along the lines of a Socialist Europe big enough to counteract the unmitigatedly disastrous free market economy in the United States, on the one hand, and the bureaucratically controlled economy in the Soviet Union and Eastern Europe, on the other. I have always argued that. What I argued when we came to enter the Common Market—for me this was the determining factor—was that the terms of our entry into a market dominated by the Treaty of Rome involved, first, an acceptance of a free market economy based upon that Treaty and, secondly, and I think more important, that the terms were such that our people would suffer tremendous burdens because of entry.

Mr. Spearing
Would not my hon. Friend agree that there is a distinct link between the needs of peasant and subsistence agriculture in the Mediterranean and the policy apparently involved in the CAP? Does he agree that there is not an agricultural policy worthy of the name, because article 64 of the Treaty is really an agricultural produce prices policy, which will do little to sustain the human fabric of those rural areas in the South? Does my hon. Friend accept that unless that policy is changed it could well, instead of aiding their democracy, fuel social discontent if article 64 remains unamended?

Mr. Heller
I think that my hon. Friend has put the point better than I would have. I do not disagree at all. The CAP is not a genuine agricultural policy. That is the whole point. What are we to do? The Labour Party conference this year and last year, and certainly the Labour Party itself, based on the letter from my right hon. Friend the Prime Minister to Ron Hayward, have made it clear that there should be a fundamental renegotiation of the CAP. What I am concerned about is that we said that more than a year ago, and it is true. I accept what my right hon. Friend the Foreign Secretary said, that a stand has been made by my right hon. Friend the Minister of Agriculture, Fisheries and Food—up to a point. But what happens is that one is pressurised by Common Market colleagues. One makes a stand up to a point, and then the bargaining begins. One gives way on this in order to gain on that. One gains a little and loses a lot. That is what has been happening. The time has come to stop that kind of bargaining. We must bluntly tell the  Common Market countries, our partners, that we shall adopt the type of policy that was adopted by General de Gaulle and the French. We can learn from what some of our Common Market colleagues did in the past. I was on the Council of Europe when the French had what they called the vacant chair policy. I believed that when we were carrying through our renegotiation we should have had a vacant chair policy instead of participating. I hope that I am not giving away official secrets if I say that I sent a memorandum to the Prime Minister at the time urging that policy. My suggestion was not adopted. One does not always win, but a few years later one finds that people think that one's idea might have been good. If we had adopted that suggestion we should not have been in the position that the Prime Minister described last night at the Guildhall. But it is not too late. We can adopt that policy now. We can say to our colleagues in the Common Market "We shall not participate in the work of the market until there are fundamental changes along the lines that we propose." That brings me to my final point. If we do not have those fundamental changes, what shall we do? My right hon. Friend the Foreign Secretary says that it would be wrong to threaten to leave the Common Market. I remember a trade union official who once told me before going into some wage negotiations "I have both hands tied behind my back. The ground has been cut away from beneath my feet, and I feel like a blindfolded man." I said "Then there is not much point in going in, is there? You do not have much to negotiate on if you are in that condition." To some extent, we have been in that condition in our discussion with the Common Market. In such a case as that and in this present case, one has only one strength. In the case of the trade union, it is to say "If you do not negotiate within reasonable limits for what we want, we shall have to consider withdrawing our labour." In the present case, all that we can say is "If you are not prepared to change the agricultural system fundamentally and in the process help the countries in the Mediterranean area because they need assistance with their agriculture, we  shall consider negotiating ourselves out of the Common Market and withdrawing." That is what we have to say quite clearly, and, although I support the applications in principle, I think that we are at the crossroads. It was highlighted last night by my right hon. Friend the Prime Minister. On that basis, we have to be clear about where we go from now.

5.10 p.m.

Sir John Rodgers  (Sevenoaks)
If the Foreign Secretary had still been here I would have apologised for missing the beginning of his speech. In any event, I did not intend to speak on this subject today and in view of that I shall not detain the House for very long. However, I wanted to ask the- Foreign Secretary two questions. I am sure that we are all delighted at the stance that the right hon. Gentleman has taken about the enlargement of the Community, not just on political grounds but on much wider ones. We must encourage the growth of democratic societies. The democratic countries are in a small minority in the world. Of 170 nations, about 25 are democratic. This is the Western ideal of good government, and anything that we can do to encourage the growth of democratic, pluralistic, parliamentary Governments should be done. One of the greatest ways to encourage that is to enlarge the Community, bearing in mind especially that although we talk about the European Economic Community, Europe is a much bigger entity than just the Nine, the 12, the 14, or whatever it may be, and that we should look much wider than that to embracing eventually the whole of Europe in it. If the Foreign Secretary had been present, I should have liked to ask him to explain the criteria used in selecting the timetable for the admittance of the various countries. As I understand it, the timetable is that Greece comes in first, Portugal second, and Spain third. I do not know the criteria that have been used to make Spain come last in that admittance. I want also to support what my hon. Friend the Member for Mid-Oxon (Mr. Hurd) said a moment ago, that in talking about the admittance of those three countries we should never forget the claim  of Turkey eventually to be admitted to the Common Market on defence, political and all sorts of other grounds. We should not make a false step by appearing to be pro-Greece and anti-Turkey, or pro-Turkey and anti-Greece. It is very important that we should understand that. I know from talks that I have had with Turks that they do not think that they are yet in a position even to apply for membership. However, they very much want us to extend a hand of friendship to them and to hold out the idea that they will be admitted as soon as their economy can stand the strain of coming in. The much more pertinent question that I wanted to ask the Foreign Secretary is somewhat on the lines of what the hon. Member for Liverpool, Walton (Mr. Heffer) said. The Foreign Secretary made a very constructive speech, which will not have displeased either side of the House. However, he dodged some of the major issues, one of which concerns the position of the European Economic Community after direct elections. I agree with the hon. Member for Walton that the common agricultural policy simply cannot be allowed to continue along the lines which it has followed to date, giving two or three countries enormous aid. I do not blame the constituent Six of the Common Market for it; I blame this country for being slow to get into the Common Market. I cannot conceive that had we joined the talks—

Mr. Spriggs
The hon. Member criticises this country for not joining the Common Market at the date of its inception, but is he aware that when Britain made application, to join General de Gaulle vetoed our application until, of course, the French people had obtained a common agricultural policy? Then France gave the word to allow Britain to enter. But that was too late.

Sir J. Rodgers
I agree with the hon. Member. However, if I may go back a little in history, in.1955 I was one of the signatories to a motion on the Order Paper of this House urging the then Prime Minister, Mr. Harold Macmillan, to join the talks that led to the Treaty of Rome. Had he done so, and had we been present at the formation of the EEC, I think that the common agricultural policy would not have been framed as it  has been, which undoubtedly has been to the advantage of French and German agriculture. I do not disagree with the hon. Member for St. Helens (Mr. Spriggs); my point is that having formed it themselves they formed it for their own interests, and it is our fault that we were not there to form it in another way. I hope that we shall soon have another chance. Next year we shall have direct elections. It would have been interesting to hear from the Foreign Secretary whether he felt that the role of the three bodies was likely to change drastically. We have the European Parliament, with very few powers at the moment. We have the Council of Ministers, which makes the final decisions. The initiation of all policies comes from the Commissioners. This is tantamount to saying that in this country the Treasury and the Civil Service get out the policy for the Government, it is discussed without any powers by this House, and then the Ministers have the right of veto or the right to suggest changes. That is exactly the present position in Europe. In my view, we should make it clear that when we hold direct elections, we ourselves have the right to go to the basis of the EEC and question these three institutions and the powers that have been given to them. It may not be popular with the EEC to think that from the word "go" we shall be trying to change some of its institutions and their powers. However, I do not think that the questions that the hon. Member for Walton asked can be raised, because in my view we should never threaten to get out if we do not get what we want. We are just as good at bargaining as is anyone else. Once we have direct elections to the European Parliament, we can make our voice heard and, we hope, get others to see our point of view and in a democratic way progress along these lines. But to threaten to leave the EEC just because it does not do exactly what we tell it is not the right approach. It would be very counter-productive in Europe if we took that stance. We are already accused of beginning to take that stance. I do not think that we should do that in an international organisation of this kind. Those are the two matters about which I should like to hear more. In my view,  the question of the powers of the Corn-mission and what are to be the powers of the new democratically elected Parliament in Europe form the basis of getting the policy right.

5.19 p.m.

Mr. Alick Buchanan-Smith  (North Angus and Mearns)
Like my hon. Friend the Member for Mid-Oxon (Mr. Hurd), I welcome the proposals to enlarge the Community. One of the interesting features of the debate so far is that, although individual hon. Members have spoken about some of the problems and challenges facing the Community and this country as one of its individual members, in political terms, regardless of our attitude to the Community generally, any enlargement and greater formal co-operation between the countries of Europe is to be welcomed. Equally, in political terms, as my hon. Friend the Member for Mid-Oxon and the Foreign Secretary both said, the more mutual support that we give the emerging democracies in Europe, the better it will be for the cause of democracy, not only in Europe but in the Western world as a whole. In that sense, I would very much welcome enlargement of the Community. However, many of us have our reservations about enlargement because of the difficulties faced by the Community and because of its inability to tackle and solve them. We wonder whether enlargement will mean that solution of the problems will be delayed or made more difficult, and therefore we need to know what are the implications of enlargement. From that point of view, it is perhaps easy to say that perhaps we should delay enlargement until some of the internal problems in the Community can be resolved, or at least until we are able to reach a wider agreement upon them. The common agricultural policy is one such problem, and the European monetary system is another. I have my doubts whether it is right to go ahead with enlargement while these great problems are still unresolved. I reach a somewhat different conclusion from that arrived at by the hon. Member for Liverpool, Walton (Mr. Helfer) and others. We should not merely regard these difficulties as an obstacle to  enlargement but should set as our higher objective the enlargement of the Community. I hope that the mere fact of enlargement will help to stimulate a much speedier and more thorough approach to problems such as the CAP and the EMS in an effort to reach solutions. Therefore, we should seek to use enlargement in that sense rather than as an excuse for delaying such moves. As somebody who has taken a great interest in the workings of the Common Market from the point of view of the common agricultural policy, I am somewhat sceptical about the effectiveness of the introduction of a European monetary system, because we all know that in the one area in which a common currency has been tried, in agriculture, it has led to the greatest number of artificialities. As a person who has consistently supported Europe, I am uneasy, because of my experience with the CAP, about how effective the introduction of the EMS will be.

Mr. Hurd
Is not one difficulty with the green currencies the fact that, even when one begins to remove problems by realigning currencies, one finds that the basic currencies have varied as against one another and that all one's good work has been undone? That happened only last year. Would not the situation be somewhat improved if the basic currencies were more stable against one another?

Mr. Buchanan-Smith
I agree, but one of the prerequisites to enlargement must be the resolution of some of these problems. Equally, it is important to carry out a reform of the green pound before we advance to a wider area of activity. If we could advance in that wider way in respect of the EMS, I believe some of the problems would be solved. We are to some extent in a chicken and egg situation. If we wish to see broader acceptance in this country of the EMS, it is important that we should try to remove some of the artificial elements in the agricultural system, because the present artificialities make nonsense of any form of common policy. I wish now to deal with the possible accession of Spain, Portugal and Greece and to consider what the effect of that would be on the CAP. Too often on these occasions we embark on unlimited  criticism of the CAP. I admit that the policy has its faults, but let us not forget that it has had its successes. Since the policy came into being, we have seen a considerable increase in output and in the prosperity of those involved in agriculture. I agree that there are problems of surpluses because output has gone too far, but there is no doubt that in many areas of agriculture in Europe there has been an improvement in the standard of living. At the same time, we have seen an increase in trade in agricultural products. It is most significant that this great increase in output has been achieved by using roughly half the number of people who were involved in agricultural production when the Common Market was set up. Because we may dislike certain aspects of the CAP, let us not simply hark back to the old deficiency payments system. Any farmer will underline the fact that certain aspects of the policy are good. I should like to see operating the best aspects of both systems. Perhaps intervention buying and deficiency payments could be merged, because that might be the best system of all. Let us not forget that the deficiency payments system also led to surpluses. We have only to remember the period from 1962 to 1964 when standard quantities had to be introduced in this country to hold back our agricultural production. They were introduced not only because agricultural production was increased to a level higher than that which the Government thought right but because the cost to the Exchequer of the deficiency payments was thought to be too high when weighed against the resources available or the support of the economy generally. Therefore, the deficiency payments system threw up the same stresses, strains and surpluses as we now experience with the CAP system. We must try to deal with the fundamental problem of surpluses within the CAP. Because of the climatic factors which affect agriculture, there are bound to be surpluses. Indeed, surpluses are inevitable in any agricultural system. What matters is how we deal with them when they arise. I am concerned that, despite all the problems of the CAP, that system is still running. We now propose to enlarge  the Community by bringing in three countries in which proportionately agriculture has a far greater part to play when compared with the other Community nations. The CAP is undoubtedly creaking. If we merely seek to enlarge the Community without carrying out a reform of the CAP, the system itself may break up. For that reason, we must use the fact of enlargement as a stimulant in trying to bring about reform of the CAP. What is basically wrong with the CAP, as was underlined by the Foreign Secretary, is that its pricing policy deals not only with economic matters, such as the amount of production that is needed in Europe, but with social and regional problems. As a result, the more efficient sectors of agriculture in Europe are getting higher prices than is absolutely necessary in order that those in poorer areas and in less efficient sectors get a living as well. One thing we have to do before enlargement takes place is to carry through reform of the CAP to make sure that we distinguish much more clearly than at the moment the objectives of the policy. The prices policy that is agreed every year must be used in relation to the food needs, in relation to the Community generally and in relation to what is needed to sustain a healthy agricultural industry throughout the Community. We have to deal separately with, and distinguish, the social and regional problems, the problems of small farmers and of backward areas of the Community. If we do this before these other countries come in—the Foreign Secretary acknowledged that many of the agricultural problems of these countries are more appropriate to be dealt with through the Social Fund or the Regional Fund—we simply must make sure, before those countries came in, that we reform the CAP to the extent that we make this distinction not only in the general policy but also in the way we devote resources to agricultural purposes. I think that where local social problems or regional problems are concerned we need much more flexibility so that national Governments can provide their own answers within the Community for particular local problems. We must look for much more variety and flexibility within the CAP to deal with specific local problems which do not happen to be of a Community nature. I turn now to the question of fisheries. The hon. Member for Walton made passing reference to this, but I think that the Foreign Secretary did not mention it at all. I hope that when the Minister of State replies he will deal with the question. I should like to put a direct question to him. Precisely what effect does he expect enlargement of the Community to have upon fisheries? We see from the Commission documents that, with the enlargement of the Community by the three countries, the EEC fishing fleet would double in size. That would be a dramatic increase. We also have to remember—it is far too often overlooked —that Spain, one of the applicant countries, has the third largest fishing fleet in the world, behind the USSR and Japan. We have to realise that, so far as the common fisheries policy is concerned, we are greatly increasing the size of the fleet and the size of the problem facing us. I should like to ask the Minister of State directly what consideration the British Government are giving to the common fisheries policy, which is being hammered out at the present time, and what consideration the Council of Ministers is giving to the fisheries question. We have to make sure that whatever solution is thrashed out takes some account of what may happen when these other three countries join the Community. We do not only double the size of the Community fishing fleet if these three nations become involved. We do not only bring in the third biggest fishing fleet in the world. In the accession of Spain we bring in a country that already has a big interest in fishing in United Kingdom waters. I know that fishermen in Scotland and elsewhere in the United Kingdom are asking—I have had the point put to me—what effect this will have. I hope we get an answer in this debate. As one who was involved in the original negotiations, I think that we have to remind ourselves that when we entered the Community in the early 1970s—particularly in relation to fisheries, which has proved an intransigent and difficult problem since—the Community cobbled together its fisheries policy at the eleventh hour immediately before Britain's formal application to join. That was a very  short-sighted and stupid thing to do because Britain, Denmark and Norway introduced a completely new dimension to fisheries so far as the Common Market is concerned. We have an analogy now with Spain, Portugal and Greece applying to enter Europe. We have again a completely new dimension coming into Common Market affairs in agricultural policy and fisheries policy. All I would ask is that in preparing for this enlarged Community we make sure that, in the reform of policies, whether in relation to the CAP or in thrashing out a new policy for fisheries, we do not make the original mistake of the Community in cobbling together a policy at the last minute. We should use this opportunity to make sure that the new policy for fisheries and reform of the common agricultural policy take account of what enlargement means for the future.

5.37 p.m.

Mr. John Farr  (Harborough)
I want to refer to what my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) has said, but I should like first to refer to an intervention I made a moment ago on a point of order and formally call the attention of the House to the fact that a large part of one of the documents that we are considering is not in English. I would not say that it is a contempt of the House but it is very inconvenient, and a certain amount of inefficiency is involved. The document I am querying, document S/911/78, is headed "Translation", yet the last 21 foolscap pages are not in English. It is very irritating because there are many references in it to "Royaume-Uni", which I understand is the United Kingdom, but I do not know what on earth these references are. There are many technical headings to many of the tables in this document, of the meaning of which, again, I am ignorant. Indeed, the second half of table 13 is entirely addressed to us in French. We are supposed to be approving this document today, but I would not mind betting that probably nobody in the Chamber has appreciated the full meaning of the second half of table 13. Perhaps the Minister, when he replies, will have a ready translation immediately in mind, but most of us are not blessed with his linguistic gift. I should like to draw your attention, Mr. Deputy Speaker, to this matter, which I think is most improper. I hope that never again will we have to consider a significant document which is not, in its entirety, translated. The pity of this lack of translation is that the document deals entirely with Portugal's application to join the EEC. All the tables on the 21 pages to which I have referred deal with various important points relating to Portugal's capacity and performance as a nation. Indeed, they are all facts that we ought to know about and appreciate properly before we can come to a meaningful solution. Luckily, however, I am not entirely reliant upon these tables because, until January this year, with my hon. Friend the Member for Sevenoaks (Sir J. Rodgers), I was a member of the Council of Europe. He and I were at Strasbourg at the time of Portugal's transition from a dictatorship, in the difficult year or so before she was persuaded, thanks entirely initially to the efforts of the Council of Europe negotiators, to see the benefits of a parliamentary form of democracy. To begin with, rather tenatively, Portugal toyed with the idea of joining the Council of Europe and sent delegates to Strasbourg to see what went on and how a parliamentary democracy worked, because that had never been appreciated before in the country's history. Later, I am glad to see, Portugal became a fully-fledged member of the Council of Europe. Like my hon. Friend the Member for Sevenoaks, I was lucky enough to make many good friends among the Portuguese Members of Parliament. The Council of Europe has played an important role. Portugal, Spain and Greece each ended one form or another of non-parliamentary government but had not decided which way to go. They have been nursed by delegates from the Council of Europe who have explained the full benefits of a parliamentary democracy and those countries have gradually come to appreciate it themselves and become full members of the Council. An hon. Member asked the Foreign Secretary what would happen if a member of the EEC were to become a dictatorship. I know that a country cannot belong to the Council of Europe unless  it is a parliamentary democracy and that any country which evolved into a dictatorship would have its membership automatically suspended until it returned to parliamentary ways. I am not an expert on the Treaty of Rome, but I thought that the same applied to the EEC. As I have said, I particularly welcome Portugal's application for membership of the EEC because its people have a great affinity with this country. It is appropriate that we should be debating this matter on the day when the President of our oldest ally—the treaty stretches back 603 years—is visiting London. From what I know of the Portuguese, I warmly, endorse the proposal to add them to the Community. I have equally warm recollections of Members of Parliament from both Greece and Spain, who played and are playing a useful and constructive part in the Council of Europe. When they come to join the EEC, as I think they will, I believe that they will play an equally invaluable and constructive part. Yesterday, the Prime Minister made a speech about the need to reform the common agricultural policy. My hon. Friend the Member for North Angus and Mearns thought that a slight tinkering with the CAP before enlargement might do the job. It is at the moment so hopelessly lopsided and disadvantageous to Britain that, before we can consider enlarging the Community, we shall have to restructure the CAP almost entirely. In this connection, we must have two significant and important aims in mind. First, it is important that we maximise our own, and indeed European, food production. That must be the first aim of the CAP. The second aim is linked to the first, because maximising production must not be diverted, as it is now, into building up fantastic surpluses, the disposal of which is creating tremendous cash burdens for the Community. Most sensible Members of this House would fully endorse the Prime Minister's statement yesterday that it would be intolerable for Britain to remain in the EEC with the CAP in its present form, since it means that by 1980 we shall be the biggest single net contributor. I welcome enlargement, but before it takes place the CAP must be entirely restruc-  tured. Expensive surpluses must not be allowed to accumulate, but at the same time the maximising of agricultural and food production in Europe should be encouraged, particularly in our own national interests. At the same time, of course, one must remember the needs of emerging countries in the Third world. We must be careful when the Community is enlarged that it does not take up any of our market for semi-tropical foodstuffs which at the moment is supplied by exports from Third world countries which need the foreign exchange. I am thinking not so much of sugar cane, which is not produced in Europe, but of the many other commodities produced in Mediterranean countries. There is a risk that our imports from the Third world would be diminished as a result of the enlargement. The Foreign Secretary also referred to European monetary union. I am glad that we are to have a debate on this important matter in a week or two. When considering enlargement, we should also consider the performance of the Community to date. It is no secret that many people are not pleased by it. We should also remember the effects of the Community's future performance—that is, the probability that on 1st January next year some members of the Community will form a European monetary union.

The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd)
I am sorry to interrupt, but it is important, on this essential issue, that we do not confuse our phraseology. The discussion is about a European monetary system, which is rather different from European monetary union.

Mr. Farr
I am grateful to the Minister and, of course, I appreciate my mistake. I shall refer to a European monetary system instead of European monetary union. That system is likely to come into effect on 1st January. At the moment, I understand, the Government are making up their minds whether Britain should go in and we on this side appear to be making up our minds whether we are in favour. With all these considerations—no doubt all this will be aired in the coming debate—we must remember that in one part of the United Kingdom,  Northern Ireland, any decision nct to enter will have a significant impact. If the Republic of Ireland joins the EMS while the United Kingdom stays out, it will be the first time in monetary history that the Irish pound is no longer in parallel with the£ sterling. I believe that, a few months after 1st January, the Irish pound will stand at about£1·30 instead of£1 sterling, at par. We must debate the implications of such a change. This is just one side effect of our not joining the EMS. It will probably be disadvantageous to Northern Ireland. Those of us who basically do not favour an EMS and hope that Britain stays out must also take into account the real effect of such a radical and historic change, which will take place whether we like it or not. Like my hon. Friend the Member for North Angus and Mearns, I am sorry that the Foreign Secretary did not refer to fishing policy. As my hon. Friend said, it is significant that Spain has the third largest fishing fleet in the world. The Minister has been robust in protecting Britain's view of fishery policies. The hon. Member for Sheffield, Heeley (Mr. Hooley) is laughing; I do not know why. Perhaps he does not agree with me, but I believe that the Minister has been robust. He has been doing a necessary job by protecting the rights of Britain, which has the largest coastline in the Community. After enlargement, Greece will have a larger coastline and the size of our fishing fleet will be approached, if not equalled, by that of Spain. On balance, I hope that enlargement takes place. We must assume that a future Minister of Agriculture, from whichever side of the House, is equally robust in looking after Britain's interests. Unfair demands have been made on Britain and our fishermen as a result of our membership of the EEC. Any Minister must resist such demands as vigorously and strongly as possible. Whatever side of the House the Minister represents, if he adopts that robust attitude most hon. Members will support him. I support enlargement. On balance, I was against Britain joining the EEC. I advised my constituents to vote "No" in  the referendum. I accepted wholeheartedly the result of the referendum. My view now is that I should not mind it another three or four nations joined tomorrow. The more that we enlarge the Community, the more opaque the monster becomes, the less grasping its tentacles and the more chance there is of common sense prevailing.

5.52 p.m.

Mr. Frank Hooky  (Sheffield, Heeley)
If enlargement from nine to 12 takes place, it will represent another stage in a historical cycle. In the immediate postwar period, from 1945 to 1951, the Labour Government worked with great success towards diplomatic, political, economic and military co-operation in Western Europe. This was done through OECD, the European Payments Union, the Western European Union, the Council of Europe, the Treaty of Dunkirk and eventually NATO. We built success fully a highly sophisticated system of co-operation among Western European nations. We should have embraced Eastern Europe also but for the obstinacy of Stalin and Stalinist Russia. That co-operation grew successfully on a pragmatic basis without the ideology of supranational institutions. Unfortunately, between 1951 and 1966, when the Conservatives had charge of our affairs, what had been achieved was thrown away. The Conservatives ignored the views and trends of opinion which were developing in Germany and France in particular and to some extent in Italy. They allowed a chasm to develop between the Six and what eventually became known as the seven in EFTA on economic affairs in particular and to a lesser extent on political lines. Instead of adopting a vigorous diplomacy designed to reconcile the supranational notion with our own more pragmatic intergovernmental approach to international co-operation, they simply allowed the two sides to drift apart. Consequently there was a diversion between the Six and the Seven. Even among the Six the supranational idea created serious strains. It was the idea of an international bureaucracy, of international laws and regulations dominating purely national institutions and the idea that a centralised bureaucracy could legislate on every fiddling detail of social,  political and economic life. At one time France boycotted the Council of Ministers for six months so that she could get her own way or block whatever her fellow members wanted. The Six co-operated with considerable success in those spheres which were of special interest to them—for instance, in economic matters. In political matters France was inclined to go her own way. No doubt she will do that in future. On economic matters there was a fair degree of common ground between the dominant partners—Germany, France and Italy. The lesser members fitted in reasonably successfully. However, stresses and strains arose. They caused crises from time to time even within the Six. Today the supranational concept is causing even more serious strains. It is giving rise to even greater stress within the Community now that there are nine members instead of six. My view is that if we admit another three members the system will, by its nature, become unworkable. I do not see how anyone can argue that there will be a convergence in 50 or 100 years between the economies of Portugal and West Germany. The proposition is not on. We have seen how far the economy of an advanced sophisticated country such as the United Kingdom can diverge fairly drastically from the economy of West Germany or Holland. I cannot see that there will be convergence between the economies of Portugal and Greece, on the one hand, and Holland and West Germany, on the other. The idea of convergence, which is part of the Common Market philosophy, is an essential and practical part of the system. In order to achieve a common agriculture policy, even in name, all sorts of weird monetary devices had to be used. The green pound, monetary compensatory amounts and so on are necessary to make the system even look as if it is working. I do not see how one can achieve an effective single economic unit for countries which are as widely disparate as Holland, Belgium and Denmark on one side and Portugal and Greece on the other. Spain falls somewhere in between. I cannot see that the principle of harmonisation, which seems to be the basis of central bureaucracy in Brussels, will be effective among 12 countries which are so widely divergent in their economic structures and their political and social backgrounds as the 12 which are to come together in the next few years. This does not mean that I am opposed to enlargement. On the contrary, I should like to see enlargement. It will demonstrate the total impracticality of the structure. This is being demonstrated now with the Nine and will become staringly self-evident once a serious attempt is made to integrate the three Mediterranean countries. The problem that will confront the United Kingdom and the other major partners in the EEC is whether they will push their structural arrangements, their ideas of harmonisation, the power of the central bureaucracy and the notion of the convergence of economies to a length which eventually will lead the countries which have joined latterly to walk out, or whether they will modify, if not totally abandon, this supranational element in their thinking and move back towards the concept of intergovernmental co-operation on which the great international institutions—the genuine international institutions—are based. I refer, of course, to the United Nations and the vast apparatus of agencies under its auspices which work perfectly happily on the principle of intergovernmental co-operation without the obsession of supranational regulations, harmonisation at every end and turn, and, of course, any view about convergence of economies, which would be totally impracticable, in the world. I believe that this dilemma is facing the United Kingdom already and in a sense has come to a crunch with the issue of the proposed European monetary system, because there is no doubt that such a system cannot possibly work if we have economies which are as divergent as those, say, of Italy and Ireland, on the one hand, and West Germany and Holland, on the other. The stresses and strains will defeat it. If anyone doubts that, he need only look at the history of snake 1 or snake 2—I forget how many snakes we have had—which were built up and abandoned over a period of months, if not years. I cannot see how any European monetary system will work unless we accept the political impossibilities of paying an enormous price in deflation, unemployment and other social disasters in order to remain within the European ideology of a single monetary union and a single economic unit. Therefore, although I welcome the expansion of the Nine into the 12, I do so candidly on the ground that it must destroy the present narrow structure to the Community as it is now conceived. Those who think that they can retain that structure and expand successfully to 12 are either being dishonest—which think that they are not being—or are making an error of judgment as massive as that made by this country when we joined the Six. There are one or two specific problems to which I am not entirely satisfied that the Government are giving sufficient attention. There is the problem of steel. The city part of which I have the honour to represent is world famous for steel—not for millions of tons of bulk steel, but for high quality, high alloy special steels. Within the past two years, we have been and are suffering considerable difficulties because of dumping, not from Japan, although that has been a problem, and elsewhere, such as Sweden, but mainly from West Germany and partly also from Spain. Ministers in the Departments of Trade and Industry have been vigorous and careful in the matter of dumping from Spain, Japan and Sweden and have taken action to restrain it, but they are helpless about dumping from West Germany. They are now in the depressing position of having to go begging to Mr. Davignon and saying "Please help us. We are in a dilemma. Our industry is being undermined by the very partners in the Community who are supposed to be part of our economic strength." If we have to cope not only with West Germany and France, and partly with Italy, but also with Spain in relation to steel production and dumping, the situation will be very serious. It poses an immediate dilemma. One cannot honestly say to the Spaniards "Come in. We want democratic Spain as part of this great Europe" but add in the same breath "If you come in and try to sell steel to  us, we will not allow you to do so. You will have to make up your minds which minor markets you take." Then there is the problem of wine. Hon. Members have talked about the agricultural problems of the Mediterranean countries. The most formidable problem is that we shall be admitting to the Community two of the greatest wine producers in the world, Spain and Portugal. We already have in the Community two of the other greatest wine producers in the world, France and Italy, not to mention West Germany, whose wine production is by no means small. Simply to admit these countries on the basis of the present arrangements will put an intolerable strain on the wine-producing industry unless something drastic is done. Hon. Members have referred to the problem of the fishing industry. There again, there will be serious problems because of the size of the Spanish fishing fleet and its importance to the economy of Spain, and because Portugal and Greece are themselves not insignificant in fishing. I am not convinced that Her Majesty's Government have sufficiently taken on board, if I may put it that way, the problems which will arise in achieving a fishing policy which will satisfy all the interests not only of the Nine, which has been difficult enough already—it is still not resolved—but of the two other great maritime countries, Spain and Portugal. Then there is the question of relations with the Third world. There is no doubt that some of the products of Portugal, Spain and Greece will compete quite severely with products from the Maghreb countries of North Africa, and that we shall find demands within the 12 for discrimination against certain Third world products on the ground that partners in the 12 can produce them more efficiently and in greater quantities, or to an extent which means that Third world countries' produce will no longer be required. An example of this problem arose when we joined the EEC and wanted to protect our former Empire sugar producers against the pressures of the EEC's internal producers such a France and Belgium. We shall run into more formidable difficulties and stresses with citrus and other products of Spain, Portugal and Greece in competition with the products of Third world countries with which at present  we have reasonable economic and trade arrangements. Although no one should assume that enlarging the Community will not make not only quantitative but also qualitative differences in its future development, if we are honest we should make clear to our partners that the kind of stresses, strains and problems that we have encountered through our membership in the expansion of the Community from the Six to the Nine will be multiplied many times if the Community insists on retaining its present structure and ideology and tries to fit into that structure 12 countries as diverse as Greece, Ireland, Portugal, Holland and the rest. I believe that we should put it honestly to our partners either that they must contemplate a drastic revision of the provisions of the Treaty of Rome, a drastic overhaul of the structure and ideology and even of the obsessive "Community spirit" about which they are always talking, or that they should face up to the fact that, while a Community of six worked with difficulty but with reasonable success, and a Community of nine is working with much greater difficulty and even less success, a Community of 12 will not work at all on the basis of the present structure.

6.11 p.m.

Sir Anthony Meyer  (Flint, West)
For diametrically opposite reasons to those given by the hon. Member for Sheffield, Heeley (Mr. Hooley), I support the admission of Spain, Greece and Portugal to the Community. But I do so with an uneasy feeling that the hon. Member could conceivably be right. If I had to choose between maintaining an effective Community and enlarging it, I regret that I should have to choose the former. I do not believe that the choice is as stark as that, however. The hon. Member for Liverpool, Walton (Mr. Heller) made an interesting contribution. It is always a pleasure to agree with him, and there have been strange occasions when I have done so. I remember one occasion on which he was almost alone in denouncing the hysteria that was being whipped up about our attitude to the fishing dispute with Iceland. The hon. Member took a highly courageous stand on that matter, and I  very much admired his courage at that time. I wish to agree with the hon. Gentleman strongly, without seeking to make political points, that we were conned over the renegotiation. I strongly agree with him, too, that the issues should have been put much more fairly than they were at the time of the referendum. I believe that it should have been made plain to the people that the decision to remain in the EEC was not based solely upon economic advantage. At the time much unscrupulous play was made with the figures of our contribution, which at that time looked highly beneficial The political advantages of being a member of this group should have been very firmly and fairly explained to the British people. In the same way I believe that at present, in view of the furore which is proceeding over the price of our membership of the EEC, it should be pointed out that£15 per person per year—that is the price of 30 cigarettes a week —may be a lot of money, but it is not an extravagant price to pay if, as I firmly believe, membership of the Community is vital not just to our economic well being but to our future political security. The hon. Member for Walton is one to whom such arguments can be addressed, even though he may not accept them. I believe that it is possible to argue the issue with him in these terms and not purely in terms of the cash cost of being in or out. It is pretty clear from the massive documents with which we have been presented for this debate that enlargement of the Community will damage the short-term economic interests of the existing members. Nowhere is this clearer than with textiles for the United Kingdom and Mediterranean products—wine, fruit, olive oil, and so on—for other existing members. It is little wonder that the campaign in France against enlargement has assumed a particular virulence, or that the French Communist Party should be conducting a hysterical campaign against enlargement, with posters all over the country saying that not one vine shall be torn up in France in order to accommodate the massive inpouring of wine from Portugal and Spain. In these circumstances I believe that all the more credit is due to the French  President, who, for no direct political advantage to himself or economic gain for his country, still senses the political advantages of enlargement so acutely that he is prepared to press ahead in favour of it. The economic price for all existing members of the Community will be high. It therefore follows that if the political advantages are to outweigh that they must be great. The Foreign Secretary talked about closer ties which enlargement of the Community would bring with countries of Latin America and with some countries in Africa which have hitherto been outside the Community's sphere of influence. These advantages are real, but the basic advantage, surely, is that of enlarging the area of freedom in Europe. I am referring not just to an enlargement of the base of anti-Communism in Europe. The issue goes much wider than that. In an age when the two great Communist Powers are at each other's throats it would be most unwise to base the whole of our future security purely on erecting a strong anti-Communist alliance, although that must play a part. We are compelled to do what we ought to do anyway, which is to think more positively, although not just in terms of erecting an anti-Communist alliance. We should think also in terms of giving freedom a more secure base. On these grounds it is of great importance that Europe as a whole, beginning with Western Europe and ultimately leading, one hopes, to Eastern Europe, should be the home of economic and political freedom. Freedom is in danger, not only from Communist external pressure and Communist internal subversion but from the advance of technology. We have had held before us the prospect that within as little as 30 years, according to an expert who spoke recently, some 90 per cent. of our population will have no useful work to do. The rapidity of this transition could pose a formidable threat to our democratic institutions. If we are to survive such events without disaster, I believe that we need a strong and solid base upon which to stand political freedom. The question which therefore arises is whether an enlarged Community will increase the chances of economic and poli-  tical freedom surviving the threats of Communist pressure and of technological change. I believe that it will do so provided that it does not water down too much the capacity of the Community to take decisions. I do not think that that necessarily entails more supranationalism. A wider role for the Commission will be important, I believe, and perhaps even vital in enabling the Community as a whole to take effective decisions. I accept, however, that there are other answers. I was a little disappointed at the hesitant reply I received from the Foreign Secretary when I put to him the question that the hon. Member for Horn-church (Mr. Williams) also put, namely, supranationalism or not, does he envisage a more constructive role for the Commission as the initiator of compromises which are more far-seeing and less short-term than the kind of compromises that emerge from the horse trading that goes on around the conference table? That is an argument that my right hon. Friend the Member for Sidcup (Mr. Heath) always used to put forward most strongly. The concept of the Commission is that it is the initiator of long-term European policies. The Commission proposes and it is for the Council of Ministers to dispose. Without the role of the Commission, I believe that that forward motion would become extremely difficult. From the more narrow British point of view, it seems that enlargement of the Community necessarily entails a shakeup of the Community. Therefore, it is a chance to rearrange the pieces, and to rearrange them more to our national advantage. If we are not seen to be too greedy, we can use the shake-up to gain long-term advantages for ourselves. If so, we must be prepared to put something into the pool as well as always being ready, apparently, to grab something out of it. Above all, we must he prepared to put into the pool our immense resources of energy. For that reason it is disturbing that the present Secretary of State for Energy should adopt so totally negative an approach to the idea of a Community energy policy. A constructive, forward-looking energy policy could bring benefits to Britain in the very short term provided that we did not, as it were, sit in our manger refusing to allow anybody to come near it and growling when he did. We must not persist in the idea of maintaining our vital national interests—no one would suggest for one moment that we should surrender those—and refusing to make any changes whatsoever. For example, it is disturbing to see the Secretary of State for Transport—there is no better European than the right hon. Gentleman—being put in the position of having to defend a refusal to accept the decision of the Community over the installation of tachographs. That is an alarming experience. No one can conceivably maintain that tachographs represent a threat to the British way of life, or that to keep them out of cabs is a vital British national interest. It is merely the demand of one trade union that wants to continue practices that even from the narrow safety point of view are totally indefensible. It seems that there is a totally ludicrous disproportion between such objections to closer co-operation with our European partners and the prize that is now nearly within our grasp, that of a European Community extending to cover the whole of free Europe and a base on which political and economic freedom may ride out the storms of the rest of the century.

6.23 p.m.

Mr. Bruce Grocott  (Lichfield and Tamworth)
It is a pleasure to follow the hon. Member for Flint, West (Sir A. Meyer), if only to say that I disagree with almost everything that he said. I found myself waiting anxiously for him to spell out exactly what he meant about making a greater contribution to the Community, being prepared to put more into it. Surely one of the major problems at the moment is that we are putting far too much into it and enjoying far too small a return. If by putting in more of our energy resources the hon. Gentleman meant losing such control as we have over our energy policy, that would be an interesting proposition to develop. I think that it would find little support among those who are concerned about long-term British interests. I suppose that the hon. Gentleman and I are in agreement—it is a curious feature of the debate—on our general position of support for the enlargement of the Community. However, my position is very much that of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), who made it plain, if I may para-  phrase his argument, that he supports enlargement because he thinks that with a bit of luck the enlarged Community will break up. Why is it that those who are in favour of the Community are so strongly in favour of its enlargement? It seems that at least two subconscious factors are at work of which some may be aware but of which most are not. The first factor is the assumption that size means success and that larger means being more successful. There is mindless support for that notion. It probably exists among industrialists, local authority managers and supporters of the EEC. The view is taken that there must be something successful about the organisation because countries keep applying to join it and because it is demonstrably covering a larger area now than when it started. There is a more sinister reason for those in favour of the Community supporting its enlargement. It is one that hinges on the oldest foreign policy trick in the book, which is to deflect attention from one's own vast internal problems by concentrating attention on a foreign adventure. To a large extent the preoccupation of those in the Commission and elsewhere with the enlargement of the Community is precisely for that reason. They hope that attention will be deflected from the pressing internal problems of the Community. The internal problems will not go away. The Prime Minister's speech last night, which spelt out the effects of the internal problems on Britain, is only the beginning of what will be a developing argument. That is so to the extent that even British pro-Marketeers seem to be adopting a basically Gaullist position. A Gaullist position would have been considered pretty dangerous from the point of view of the future and success of the Market only a few years ago.

Mr. Alan Lee Williams
My hon. Friend has made the charge that many pro-Marketeers are now adopting a Gaullist position. Out of courtesy, will he spell out his charge? I am not following that part of his argument.

Mr. Grocott
The position now is very much as de Gaulle and his party would have described it about 10 years ago. Even those strongly in favour of the European Community are no longer emphasising any federalist element in Europe.  They are no longer emphasising the unimportance of national or self-interest. They are playing down the communautaire arguments that were always advanced by pro-Marketeers and Europeans. I suggest that that is a growing spirit within Britain, within the House and within the Labour Party. The Prime Minister's letter to the NEC would have been unthinkable three or four years ago. It clearly represents a Gaullist position. I draw the attention of the House to three problems brought about by enlargement. These are problems to which pro-Marketeers, and those in favour of enlargement should direct their attention, bearing in mind that they think that enlargement will strengthen the Community and that it is part of the Community's objectives. The first problem will be to cope with the increased language difficulties brought about by enlargement. Language has proved to be more of a problem for the Nine than for the Six. The problem of language will make for difficulties in negotiations and in the mechanics of meetings such as the Council of Ministers and the Commission, not to mention the European Parliament. The second problem— in my view it is much more important—is that of accountability in a larger European organisation. I am thinking especially of the accountability of politicians to electorates, of Members of a European Assembly to the constituents that they represent. I can claim a certain qualification in speaking on this topic because I represent the fourth largest parliamentary constituency in this country, including Northern Ireland. I understand that it is proposed, because of the onerous duties involved in being a Northern Ireland Member, to make conditions easier for them by making their constituencies smaller. I sometimes wish that more thought were given to other Members. I notice that on the Government Front Bench there are two Ministers with a very similar problem. Mine is the fourth biggest constituency in this country, and I represent about 130,000 people, with an electorate of about 100,000. As my hon. Friend the Under-Secretary of State remarks, it is done very efficiently. But  my mind is overwhelmed by the problems that the new Members of the European Parliament will have, even given the Community's present size, in trying to represent 500,000 people. We may use the same words, when we talk of representing people's interest or of speaking for them in an Assembly or a Parliament, but the words cease to have any real meaning in relation to numbers of this sort. They can have whatever meaning the so-called representative wishes to attribute to them. We all claim to speak on behalf of our electorate, even when we are not quite clear what our electorate feels on a particular issue, but the larger the base gets, the greater is the freedom for the representative to claim exactly what he wants to claim on behalf of the people whom he is supposed to represent. Any kind of link between the representative and the people who elect him is, in my view, very thin with an electorate such as I have. Much as we may do our best for our constituents, it is pretty difficult to sustain or maintain any personal contact with 130,000 people. When we talk of a figure of 500,000, I think that any such concept of representation is really meaningless. It is a fairly well-established philosophical argument that democracy can operate successfully only at a certain level of population. There are many reputable names associated with that argument, including people such as Rousseau and Plato. Beyond a certain size, is it manageable at all, and does representation really mean anything? With the prospect of the enlargement of the Community, one can envisage a day when Members will have 750,000 constituents, or perhaps 1 million constituents. It will require a re-writing of the language if we are not profoundly to abuse the terms that we customarily use. It is almost a contempt of the language to use the same term, "representing", when talking of 1 million people, as when talking of 60,000 people, the size of the average constituency. A further problem associated with enlargement is that of decision-making within the Council of Ministers and within the Community. Those who are in favour of enlargement and who are also supporters of the concept of the Common Market are not being very honest about this matter. They know well  enough, surely, that the present decision-making system, particularly within the Council of Ministers, hardly works at all. The fact of having a system under which there are vetoes over essential national interests—a principle which I entirely support—makes it extremely difficult to reach decisions on many of the matters which come before the Council of Ministers in its present state. If we want a larger Community which will work—and I do not, as I have made plain—it seems to me to be absolutely inevitable that we shall have to resort to a system of decision-making which has nothing like the same safeguards for member States as exist in the present system. I appeal to those on the other side in this argument to be absolutely clear en their position, because this question is absolutely crucial to the long-term interests of Britain. To fudge the issue, to accept enlargement and then later to say that we might as well have majority voting, or some other system, just to get the ball rolling—even if it is rolling in a direction which is damaging to Britain—would seem to me to be inconsistent with honesty in politics. Those who are in favour of the Community and of its enlargement should, therefore, make their position plain now. There are many unanswered questions about enlargement. At the beginning of his speech my right hon. Friend the Foreign Secretary said that this was a momentous issue for the Community. Judging by the interest shown in the debate, it would not appear to be a momentous issue for the House of Commons, and the House of Commons, in my judgment, has a far bigger and more unhealthy interest in the Common Market than my electorate has. If this is indeed a momentous decision, that fact has not yet permeated through to our consciousness. But, if it is a momentous decision, it is up to those who are in favour of the Community to spell out clearly, particularly on the issues of accountability and decision-making, exactly how the system will work. The onus is on them.

6.35 p.m.

Mr. Peter Mills  (Devon, West)
I apologise to the House, Mr. Deputy Speaker, for coming in late, but I was  delayed. Hon. Members may laugh, but I have a very great interest in this question, being a member of the Scrutiny Committee and having recommended it for debate. I do not see any need for hon. Members to laugh. This was, I believe, one of the most important questions to come before the Scrutiny Committee, of which I have the privilege to be a member, for a very long time. As we on the Scrutiny Committee have to deal with very many instruments, Mr. Deputy Speaker, I can assure you that I mean very sincerely the words that Ihave just said. I want to deal with the effect that enlargement will have on food and on agriculture. My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) has, I understand, covered this aspect— he and I have had the privilege of working together on many of these matters—but I want to emphasise them once again, because they are very important. I welcome the enlargement of the Community because of the political implications involved, certainly from a defence point of view, although I am not very skilled in matters of that sort. I believe that enlargement will present many very real challenges and problems to us in this country, particularly in relation to agriculture and food production. These problems are emerging now, and with two or three more countries in the Community, the situation will, I believe, get worse. It is necessary to make really radical changes now in the common agricultural policy. Even without enlargement, I do not believe that the Community can carry on in the way that it is going at present. I speak very much as a pro-European, but I believe that for a variety of reasons changes are needed, and needed desperately, as has been shown in practice. When the CAP means so much and is of such importance to the politicians in France, in Germany and in other countries, it is very difficult to get them off the hook, so to speak, but it is necessary to do this. If there are to be changes, there must be some fundamental excuse for them. I believe that we have that excuse now, for with enlargement the CAP just will not work. The mind boggles. for example, at the idea of having a milk regime which stretches from the  Baltic to Gibraltar. One has only to think of the tremendous variation in the types of farms. Although I think that there is a very real need to have this outward protection and control of farming, I believe that it will be very difficult—in fact, almost impossible—to get common regimes throughout the whole of the Community. If the proposed enlargement takes place, it will give the politicians the opportunity to make the decisions that they ought to be making. I hope that there will be very real preparation for this, so that we do not make any further mistakes such as we have made in the past, and so that we do not get into even more difficulties than we have at present with the common agricultural policy. It will give the politicians the excuse needed to make radical changes. There is no point in going through the list. Prices are obviously important, as are surpluses. The structure problem is clearly mentioned in the consultative document: "Structure problems of agriculture in the enlarged Community will at the same time make it necessary to continue and strengthen the effort begun in the Community of Nine and to apply wide ranging measures in the applicant countries." I believe there are real structural problems, and surpluses developing from them, which need to be dealt with. I repeat, it is important that these matters are looked into with the will to change and to learn from our mistakes in the past on the CAP so that they are not extended and made worse in future. The consultative document states: "It will inevitably lead to a significant reduction in the number of people employed in agriculture or rather unemployed and make it necessary for them to be absorbed in other sectors of the economy." It is about time that the Community started to spend more time and money on dealing with alternative work. The Regional Fund should be strengthened and activated far more than it is now. I usually make a tour of farms within the Community in the summer. During the summer I saw a French farmer and his wife cutting grass with a hook, putting it on to a horse-drawn cart, taking it back and feeding it to the cows in the cowshed. That man can get a living out of doing that only because of the  price of milk. Compare that with the modern methods on our farms. It should not be done. Therefore, many such people will not be able to continue in agriculture. That means that we must make a real effort to find alternative work for them. I do not think that the sons of those farmers will 20 on in the same way. That would be true of Spain, Greece or any other country within the Community. Therefore, it is about time that we put a real effort into finding alternative work where possible. I do not know whether hon. Members have read the article by Herr Ertl in which he sought to defend agriculture and the prosperity of farmers in Germany. However, he touched on an important point—namely, the maintenance of the rural scene. We cannot disregard it. We cannot allow it to weaken. We cannot allow farmers to go out of business. The Community as a whole—in particular the urban members—looks upon the rural scene as not only important but as part of the heritage. People travel to the rural countryside when they take their holidays. Therefore, we cannot abandon the rural scene. Herr Ertl said that, while it may sometimes be costly to retain that rural scene, it was important for the rural areas as a whole and for the urban areas. I suggest that even those who are violently opposed to the Community and perhaps somewhat opposed to farmers—a lot of nonsense is talked about wealthy farmers —would agree that the rural scene must be preserved, because it has advantages for the community as a whole. I believe that we must proceed with the enlargement of the Community. It will present enormous problems. However, I hope that those concerned with these matters—the Ministers in Brussels —will have the courage to start to make the radical changes and improvements which are necessary in the CAP. Some of us have been putting forward these views for a long time. It is about time that we had the courage to make these changes. I hope that this will be the excuse for getting many European politicians off the hook and enabling them to make the necessary changes. The CAP must and can be more realistic and not so expensive to the community at large. This may be the opportunity for which we are looking

6.45 p.m.

Miss Betty Boothroyd  (West Bromwich, West)
I was not aware that the hon. Member for Devon, West (Mr. Mills) was a member of the Scrutiny Committee of this House. Perhaps he will forgive me if I refer to another Scrutiny Committee—the Sub-Committee in the other place which took evidence and looked at the documents, particularly on social policy, emanating from the EEC. That Sub-Committee heard a good deal of evidence relating to the enlargement of the Community. There was evidence from a number of groups—particularly the trade union movement, which produced a great deal of important evidence. All the groups expressed concern at the effects that enlargement would have on our already fragile and vulnerable domestic problems. But, despite the many anxieties which were bluntly expressed, out of that Committee's report came a strong recognition of the need for enlargement. The trade unions particularly made clear that, in the interests of strengthening the democratic institutions of Europe, they had the will to overcome the many real problems which the entry of countries from the Mediterranean region would present. I want to refer to two or three issues concerning social and economic policy which worry many of us. The countries which are now seeking to join us admittedly have lower standards of living for the great majority of their people than have the rest of us in Northern Europe. Therefore, it follows that the three applicant countries would, in the first place, have strong claims on the Social Fund of the EEC. I am sure that the Minister who will be winding up the debate tonight will correct me if I am wrong, but I believe that the total of all loans and grants from the EEC to the United Kingdom is about£2,000 million. Of course, there are those who believe that the demands on the Social Fund from these new member countries would greatly diminish the money which is available for those who feel that we should have greater drawing rights on those resources. The same attitude can be said to exist towards the Regional Fund. There is a considerable economic gulf between the three candidates for member-  ship. Though I look upon Spain as being to some extent the odd man out because it has a degree of industrialisation which the others do not have, nevertheless all three will be entitled to draw heavily on the Regional Fund. I do not think that there is any simple answer to this problem. Indeed, I do not pretend to come here today with a foolproof answer to it. However, I suggest that we must seek changes which go towards improving the living standards and the quality of life of other people in our hemisphere. We cannot and should not turn our backs upon them. It is right that such countries should be able to make adequate requests for these resources. It can only mean that the Community as a whole must look again at the resources that it allocates to the various funds. We must examine the budget and there must be a rebalancing. I do not accept the attitude of many hon. Members who say "Let us renegotiate and, if we do not get what we want, let us come out." That is the stance not of a negotiator but of a bully. Therefore, I say that we should look at the various funds and go on working towards seeing not only that our own people get a fair crack of the whip but that others do. Surely we are in this world to ensure that others are also given assistance when it is needed. When it comes to enlargement, therefore, we should ensure that resources are available to assist newcomers, so that it will not mean that demands from this country are met with a negative response. I hope that I am not misquoting the Secretary of State. He said that we have to make other members of the Community aware of the arithmetic too. However, one of the real fears of many of us is that the labour costs of those in the Mediteranean region are much lower than those that exist in Britain. The end result, of course, could be a very considerable threat of further job losses in the United Kingdom. It is a threat that we take very seriously. I certainly view it with genuine concern. There is a natural desire in most of us, therefore, to safeguard the very fragile employment situation with respect to imports from new member States. Whether or not that fear that I have expressed is well founded, I think that it  means that the hostility which already exists—I suppose that it is natural that it exists—will increase if it is seen that unemployment becomes greater in Britain as a result of the accession of low-cost countries. Again, there is no simple one-line answer to all this. But I think that there are two ingredients involved in aiming at a solution. First, a very frank statement on the part of those who are negotiating for the Community is essential. It is very important that those who are negotiating for the Commission are totally honest in their negotiations with the three applicants. It must be said that there is already considerable difficulty over such items as consumer durables, such as textiles and footwear, over surplus production of these products, that there is no room for surpluses within the Community, that industries producing these types of durables and consumer goods cannot continue to be subsidised, and that the rules of competition must be looked at much more closely in the context of negotiations. In other words, honesty must be paramount in the whole context of negotiations and all member States must be aware that the rules of competition need to be very closely scrutinised and constantly monitored. There is a second ingredient, too. That is the challenge that enlargement presents to us in Britain—an admission, it seems to me, that some of our industries might not, even at this stage, be competitive, and that we, too, have to face the inevitable facts of life. Therefore, there is a responsibility on us also to be selective and to develop those of our own industries which can hold their own and will continue to do so in spite of severe competition from others. I think that we also have a duty to move with even greater urgency and speed to develop new opportunities, to train for higher techniques, to move into new processes and to adapt our industries to meet the needs of a rapidly changing world. That, too, is essential. We must do the things that we can do best with skill and technology. Throughout the years there have been calls in this House daily for reappraisal of the common agricultural policy. Never  has the time been more ripe, I think, than it is now. Perhaps the past 48 hours have made that abundantly clear. We were not in membership, of course, when the CAP was formulated. Too bad. But the other member States did not join us. We joined them. We had to accept what was there. But I do not think that that means that the CAP is necessarily a static thing. It is there not to serve one section of the Community but to serve it all. Although it was devised to serve the Six, it leaves a lot to be desired in terms of serving the Nine. How much more vital will the restructuring be when it comes to serving the needs of the 12.

Mr. Spriggs
I have taken on board very carefully what my hon. Friend has said about the CAP. I have listened to the comments about what the Prime Minister said last night on the subject. It has been said that the CAP will have to be changed. Nothing is more urgent than that. However, does my hon. Friend believe that the main recipient of benefit from the CAP within the Community will allow Britain or any other nation to change the rules? It has the power of veto.

Miss Boothroyd
I put it like this. The Community is a grouping of people. What we have to do is to use powers of persuasion in order to get what we want. Surely we as a nation can hold up our heads and argue with those in the Community. I feel that if we go there with good will and say "We are here. We shall stay here. We want it to work out right ", that will be good will and a much better method of getting changes than being dragged in by our coat tails at the last moment to make it clear time and again that we do not really think that we ought to be in the Community. If we were really internationalists and Europeans, that would go quite a way towards getting the sort of renegotiation that we want. As I have said, the opportunities for change are greater than they have ever been. That is admitted by all sides of this House. Finally, to me it is a matter of major political importance that we should welcome people who have moved out of the era of a dictatorship. That is a personal matter for me because some of my family and many friends of an earlier generation,  years ago, joined with the Spanish democrats, who made it known that they wished to live in freedom. Two or three years ago, as a member of the European Parliament, I had the opportunity of meeting Social Democrats from Spain who came over the frontier by very unconventional methods to talk to some of us. I do not mean to say that they put their lives at risk, but I think that they put at risk the degree of freedom that they had. The message of those Social Democrats was fairly clear. They did not come to say "We want to know about the price of butter. What will you do about our wine?" They did not come to say "How much shall we get out of the Social Fund?"—although, perhaps, they had some idea about those matters. The entire wisdom about such matters does not rest with the British Parliament. Others have also looked carefully at the problems with which they would be faced. However. I think that these people came to say, basically, "You know that we are now moving into an era of freedom but that our institutions are very weak and fragile whereas yours are very strong. The greatest contribution that you can make to us is not, perhaps, in regard to wine, cheese or the Social Fund"—although they will have a right to that sort of assistance. "The best type of assistance you can give is to help us to strengthen our institutions and help us to move into a free society in the world and to play our part." I was very moved by these people. These were not formal meetings. They could not be formal meetings, and I should not have called them meetings. They were gatherings of a handful of Social Democrats from Spain who were at that time very anxious—they still are—to see whether we could give them a helping hand into a free world. Of course, there are enormous problems, and no doubt some of the solutions may well be painful. I think that we ought to have a combination of two things: speed, on our domestic front, to meet the new challenges, and good will: and we must have thoroughness and determination so to arrange our affairs as to resolve the daunting problems ahead. Most important of all, however, I think that the Labour Party, in particular, should certainly give a warm welcome and a helping hand to those Socialists and  democrats who so very much need our assistance at this time.

6.59 p.m.

Mr. Charles Fletcher-Cooke  (Darwen)
Without exception, everyone has welcomed enlargement. It is true that very often it has been for totally conflicting reasons, and that was highlighted when my hon. Friend the Member for Flint, West (Sir A. Meyer) followed the hon. Member for Sheffield, Heeley (Mr. Hooley). The hon. Member for Heeley was in favour of enlargement because it would, as it were, show up the impracticability of the EEC. Others have also said that. My hon. Friend the Member for Flint, West treated us to his usual informed, almost lyrical praise of the EEC and saw this great step as a further strengthening of it. I hope that my hon. Friend did not share the criticism of the hon. Member for Lichfield and Tamworth (Mr. Grocott), who thought that there might be a subconscious feeling among pro-Marketeers that biggest is best and that that was the motivation behind some of them. Apart from the overwhelming political reasons for enlargement, I thought the most interesting reason was the fact that if we were to reject these applications the chances of democracy surviving in the applicant countries were considerably reduced. Another interesting reason was that given by the Foreign Secretary himself. It was very much echoed by my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith). That was that the CAP, which has very few friends, must be changed as a result of enlargement. Once one presents, at an interface, the present paralysis in the CAP—because of the votes and strength of those interested in the preservation of the system for Northern European agriculture—with the challenge of Mediterranean agriculture, the present system has to alter. There is the sanction, which other people think can be provided only by the threat of British withdrawal from the whole thing. That argument comes from the Foreign Secretary himself as well as from the great authority of my hon. Friend the Member for North Angus and Mearns. I think that it is a very compelling argument. Of course, we all have fears as well as hopes. My fear is whether the applicant  States will be able to keep up with the column. Their present economic position, as set out by Commissioner Giolitti in the document we are discussing, gives some alarming figures of their backwardness. For example, in 1975 the per capita gross domestic product of Portugal, Greece and Spain was 32 per cent., 44 per cent., and 54 per cent. respectively of the average per capita GDP of the Community. The low level of per capita GDP in the applicant countries is a sign of their development lag. Agriculture accounts for 36 per cent. of total employment in Greece, 28 per cent. in Portugal and 22 per cent. in Spain, compared with an average of 8·7 per cent. in the whole Community. The productivity of this sector is particularly low—45 per cent. of the productivity of the other sectors in Greece, 53 per cent. in Spain and between 30 per cent. and 40 per cent. in Portugal. The same is true throughout the industrial sector. Productivity there is incredibly low, and, as Commissioner Giolitti says: "These average data in fact conceal the profound duality of the industrial sector in these countries. Alongside modern undertakings there are often subsidiaries of foreign companies. There are innumerable unproductive and mainly artisanal undertakings which are ill-suited for growth and are in great danger of suffering from Community competition. The employment rate of the population is 35·4 per cent. in Spain, 35 per cent. in Greece and approximately 33 can, that is sometimes half the battle. Those, along with others, are alarming figures. It is difficult to see, even with derogations and with all the apparatus of transitional matters, how some of these, if not all, applicant States can hope to keep up with the column. Perhaps I am wrong and I hope I am. Perhaps they are right in thinking that they can keep up. They all think they can. If one thinks one -can, that is sometimes half the battle. It is rather like ourselves and EMS, only we do not think we can join the proposed European monetary system. We fear that we cannot keep up with it. Perhaps, having had some experience of the difficulties, we are right to shy away. But these applicant countries, not having had experience of the difficulties, think that they can keep up. All I can say is that I hope they are right. I do not view with any favour, any more than does the hon. Member for West Bromwich, West (Miss Boothroyd), the  idea that the employment situation of this country is to be put at risk by helping them to keep up. I hope that it will not be, although I was rather alarmed by the Foreign Secretary, who, in mentioning textiles, said that we have got to adapt our own industries to the requirements of the new markets in textiles which will be presented to us after enlargement. I do not know what he meant by "adapting our textile industry". It has been adapted until it is one of the most modem in the world. All that it cannot do is to compete with low labour costs. We see that already in the case of Greece, where, in spiite of the close arrangements with Greece, T-shirts and other textiles have already been halted by the Community for the rest of the year. I am alarmed if the Foreign Secretary really thinks that the textile industry of Lancashire can do any more to adapt itself to modern conditions in such a way as to be able to compete with such low-cost products. As I have said, there will clearly be demands made upon the public purses of all nine existing members. There is no doubt about that. That, too, will have a salutary effect on the matter which exercises all hon. Members today, the effect of a growing burden upon the British and a proportional lack of burden upon other members of the Community. All one can say is that if the universal new burden which will have to be borne for overriding political reasons upon the existing members highlights the inequity of the way this burden is to be distributed among Community members in the future, so much the better. As the Foreign Secretary said, these are matters which, far from being hindered and frozen by enlargement, will, in fact, be provoked by enlargement. Enlargement will provoke us to consider the monetary system, the CAP and many other things where the shoe is pinching badly upon the British foot and which, therefore, will make it easier for us to solve because they will have to be solved. They have got to be solved fast. The most important thing which has come out of this debate is the rather surprising announcement that the Foreign Secretary thinks it is possible that all three applicants may be full members of the Community by the end of 1982. That is almost a shock announcement.  I am not saying it is wrong and I am not saying it is unwelcome, but it is much earlier than one had thought. That will have various consequences in concentrating people's minds, particularly on the financial aspect and the amount of subvention and sharing of financial burdens. It will also have some interesting side consequences on other institutions of the Community. My hon. Friend the Member for Harborough (Mr. Farr) raised an interesting point about language. The problem of language is certainly acute among the Nine. It is manageable in the Commission and the Council and just manageable in the Parliament, but it is already almost unmanageable in the European Court. In matters of litigation, the exact and immediate meaning of words, particularly technical words, is important. It is already almost impossible for a judge to ask counsel appearing before him interlocutory questions because of the difficulty of translating the exact nuances—even between well-known languages. If we are to add to that the difficulties of Greek and so on, it will be a tremendous, though not insuperable, burden. There will also be an enormous burden upon the European Parliament. It is not just a question of another three languages, though that will cause tremendous problems for the translators, who are already overworked, and the interpreters. There will also be accommodation problems and immense problems of expense. I hope that my next points are not regarded as trivial. I have to mention them. For some reason—I hope that it is only coincidence—these debates seem always to be arranged when my colleagues on both sides of the House are at the European Parliament in Strasbourg or Luxembourg. This is not the first occasion on which this has happened. It seems to be almost a feature. I do not believe it to be deliberate, but it is unfortunate. I wonder whether my innocence is shared by all other hon. Members, but let us assume that it is an innocent accident. On behalf of the Members of the European Parliament, I have to say that, if these three nations are to become full members, in the political sense, by the end of 1982, considerations about the  venue of the European Parliament must take that fact into account. We already know that after June next year it will not be possible to have meetings in Luxembourg because of the size of the hemicycle there. It will only just be possible to meet in the Palais de 1'Europe in Strasbourg. It is thought that just over 400 Members can sit there, but certainly no more than that. If there are to be another 100 or so Members arriving within three years, it is clear that a new site for the Parliament becomes an urgent matter. I know that this is a delicate subject, but we must also consider that, although it is difficult for us and others to get to Luxembourg and Strasbourg because there are not many flights to those cities —special arrangements often have to be made—it will be even more difficult for the Greeks, the Portuguese and the Spaniards. Indeed, it will not be possible for the European Parliament to meet anywhere except in a large European capital with sufficient regularity and frequency of communications with the capitals of the three applicant States. Neither of the present sites of the European Parliament can boast those attributes. I hope that the Minister of State and his colleagues will realise that the desire of the European Parliament to find a permanent resting place, preferably in the same place as the Commission, will be bolstered by the fact that the present two sites are even more inconvenient for the new applicants than for us. In those circumstances, it will not be possible, on grounds of size and location, for the European Parliament to continue as it has been doing.

7.16 p.m.

The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd)
My right hon. Friend the Foreign Secretary has asked me to apologise to the House for his inability to be with us now. I am sure that hon. Members will appreciate that he is meeting the President of Portugal and talking in practical terms, no doubt, about many of the matters that have occupied us in the debate. A couple of practical issues were raised by the hon. Member for Harborough (Mr. Farr). I hope that he recognises that the introduction of French, if not directly to our proceedings, at least to the activities  surrounding our proceedings, is not an entirely new development. For example, I am assured that a number of official communications between this House and another place are still conducted in Norman French. However, I take the seriousness of the point raised by the hon. Gentleman. I think that the presentation of so much of a document in French was wrong, and I shall draw that fact firmly to the attention of those concerned so that the mistake is not repeated. This has been an interesting debate. My hon. Friend the Member for Lichfield and Tamworth (Mr. Grocott) suggested that the significance to which the Foreign Secretary referred had not penetrated down to the population as a whole, or even to the House, as well as it might have done. It is an interesting reflection on the processes of democracy that often the significant issues of the future are not those which attract a great deal of attention at the time when we are in a position to influence future events. By contrast, when events have moved forward and we are meeting the consequences of developments, it becomes virtually impossible to find time for all the hon. Members who wish to speak about them to make their views known. That says something about the procedures of the House which many of us would need to think about carefully if we had the opportunity. However, I am trespassing on matters which are not directly my concern. It has been a wide-ranging debate and has sometimes pushed pretty hard at the edges of what was in order, though it is none the worse for that. I should like to deal with some of the themes that have come out of the debate, though I start by agreeing with the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) that it is important that we should try to arrange our debates so that those who attend the European Parliament can be here. I have listened attentively to what the hon. and learned Gentleman said about the need to face up to some of the practical problems that will confront directly elected Members of the European Assembly. My right hon. Friend said that we had to realise that, whilst it was fairly easy to talk about the political dimensions of enlargement and our attachment to its political objectives, it was essential that we  face up to the detailed practical problems. The range of practical problems was well illustrated in the interesting speech of my hon. Friend the Member for West Bromwich, West (Miss Boothroyd), who, with her first-hand knowledge of European affairs, went over a number of the specific issues with which we must deal. The hon. and learned Member for Darwen also dealt with some of the practical problems, not only from our standpoint but from the point of view of the applicant countries. He talked about the difficulties that they might encounter in keeping up with the process of enlargement in joining the Community. No one should underestimate the difficulties. I remember being very struck when I went on an official visit to Portugal last year on discovering how in their priority plans for the future of their economy the Portuguese were laying great stress on the future of their textile industry, shipbuilding, steel and petrochemicals, not to mention agriculture. Each of those areas is already a problem area within the Community. This clearly underlines the need to achieve a rational strategy for the Community as a whole as we move forward. The hon. and learned Gentleman also mentioned, I think with some apprehension, the problem of adjustment. He spoke tellingly about the difficulties that have confronted the textile industry in this country. I am not one of those who believe that we shall serve the interests of those who work in any of our well-established, traditional industries, let alone of their children or their children's children, by not facing up to the realities of the changing pattern of economic and industrial activity throughout the world. That goes beyond the Community. It must be evident, even to those who are sceptical, that if we are trying to devise comprehensive international policies that are to be just and fair as widely as possible—not least to our own people whose jobs and livelihood are at stake—it is a definite advantage to be able to work together with a number of other nations, as recently happened in the multilateral trade negotiations. We have a better opportunity to look to the interests of our own people if we are working with others in Europe than if we are a lone voice.

Mr. Jay
Are not my hon. Friend and some other speakers in the debate forgetting one fact about Portugal—that it has been a member of the European Free Trade Association for at least 10 years and has been very largely, with some qualifications, in an industrial free trade relationship with this country? For the past three or four years, like the other EFTA countries, it has enjoyed, largely, industrial free trade with the rest of the EEC. There are certain qualifications to that. Nevertheless, Portugal is not a new problem. The problem has been with us for some years and has been reasonably well overcome.

Mr. Judd
My right hon. Friend, who has a great deal of personal, direct experience in this area, has put his finger on a real point. He has emphasised that whether or not Portugal was contemplating membership of the Community we should have the same sort of problem. All that I am saying is that, right or wrong, while the Community exists and tries to work out rational policies for itself in these areas, the difficulties of reconciling the different interests of member countries are well illustrated by that problem, even if it existed in the framework of EFTA in any case. I listened with my usual interest to my hon. Friend the Member for Liverpool, Walton (Mr. Heller). I hope that he will realise that this is not merely a kind ministerial pronouncement but a genuine observation. I listened with interest to his views about how we achieved our objectives in the Community. My hon. Friend has always been extremely candid about his own thoughts, and even extremely honest and candid with the House about his change of mind in the process of evaluating the significance of the Community. I do not feel the slightest bit sceptical about my hon. Friend's vision of the democratic, Socialist Europe, as he described it, in which everyone would be co-operating in trying to achieve social and economic priorities of significance to all the people of Western Europe as a whole. Before the referendum, my hon. Friend and I campaigned together. I believed, and still believe, that that referendum was a deciding point in our political history, and that after it the whole nature of the game had changed, because—though  we can argue about the fairness of the referendum—the British people had said by a convincing majority that they wished Britain's future to lie within the context of membership of the Community. I hope that my hon. Friend will respect my conclusion, which is different from his. If one thing seems clear to me, as a practical politician, it is that one cannot run a country of our kind on a basis of indecision, and that once the decision had been made the challenge was to get on with the job, even if some of us might have felt that it might be more difficult in the new situation. What has struck me, working in this area—my hon. Friend the Member for West Bromwich, West, who had a different attitude and reached a different conclusion, has put the matter very fairly tonight—is that our negotiating influence has been undermined. It has been undermined because of a tendency—not an opportunist tendency, I think, but a real and understandable tendency—for some of our colleagues in the Community to look at us rather anxiously and ask "But have you made up your minds? When you ask us to adjust to what is your priority, how convinced can we be that it is your priority in the context of ongoing membership of the Commuity, or how far is it a priority in the context of having only one foot in the Community?" What I shall say next is a difficult point, and I do not ask the House to accept that it is necessarily the right conclusion, but the argument is worth considering and has my support. I believe that we should have more self-confidence. For example, I say to my hon. Friend the Member for Walton, with his commitment second to none to the cause of democratic Socialism, that there are many committed democratic Socialists in Western Europe who would be only too anxious to respond to his arguments, priorities and initiatives and to work with him in trying to shape the Community's future. That is a matter that we must take particularly seriously in the context of enlargement. At this juncture we should be spelling out to the three applicant States that we are not asking them to sign on the dotted line to join a closed society that there is no hope or chance of changing. I know that some people hold that view, but I think that it is  absurd. It is a denial of everything that open, democratic society is about. We are saying that if they wish to come into an organisation they have the opportunity to join us in shaping our future destiny and priorities within that organisation.

Mr. Grocott
I have heard many times before this argument, that if we were more communautaire the other eight would be dramatically more likely to accede to our wishes in various matters. Will my hon. Friend tell us what proposal, what further statement or concession he would make or what policy we should adopt in order to convince the other eight that we are more communautaire? We are already paying the second biggest part of the budget. We are paying for our membership card. What further concrete concessions should we make to demonstrate that we are communautaire?

Mr. Judd
I listened to my hon. Friend with great care, and I have often talked with him privately about these matters as well as in the House. However, with respect to him, he has made a classic mistake, because he swung in his intervention from one position to the other extreme. It would be quite ludicrous to argue that suddenly, if we changed our stance, there would be a dramatic change of attitude in response from our fellow members of the Community and that everything would change overnight. I am not saying that at all. But if my hon. Friend refers to the letter last year from my right hon. Friend the Prime Minister to the secretary of the Labour Party in which he spelt out the priorities for the future of the Community as he saw them, I believe that he will realise that the arguments which we were advancing on each of those fronts would be more persuasive if we could say without hesitation that we were trying to mobilise our colleagues and friends in Europe to share the same priorities.

Mr. Heffer
I do not know whether my hon. Friend is aware that the Labour Party is associated with the Confederation of Socialist Parties in the EEC. Is he aware that we have been trying desperately to get our fellow members of the confederation to come up with some serious Socialist proposals for Europe and  that until now we have been handed back some wishy-washy proposals which would be very good for Catholic social teaching, about which I also know quite a lot and which has a certain affinity but is not very close to our concepts as Socialists'? We have tried and we are trying, but until now we have not been very successful.

Mr. Judd
I know that my hon. Friend never gives up on matters about which he feels strongly. I am sorry if the initial experiences outside the formal political context at governmental, ministerial and parliamentary level have not yet been more productive. However, my hon. Friend, with his tremendous passion and power of persuasion, is only underlying the potential role which he and those who feel like him have to play in giving a political lead in the European Community. I want now to turn to some of the specific issues which have been raised, and I deal first with fisheries. This was referred to by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) and by the hon. Member for Harborough. In our deliberations about the future common fisheries policy—deliberations which we hope we can bring to an end with British interests at heart before very long—we shall have very much in mind the implications for the future and what enlargement will bring. A great deal of the debate inevitably concentrated on agriculture. We had contributions from the hon. Members for Devon, West (Mr. Mills), Flint, West (Sir A. Meyer), North Angus and Mearns and Harborough, and my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), amongst others. We should remember that there has been progress, and the hon. Member for Harborough was right to pay tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food because the progress is demonstrable in what he has achieved already in price fixing. That again illustrates why to talk of the possibility of shaping the future of the Community is not just theory but can be demonstrated as a goal which is already being achieved. It is not just that my right hon. Friend has managed to make progress in the area of price fixing. It is  important that already he is making sure that throughout the Community the voice and the interests of the consumer are being more readily recognised and that the arguments on behalf of the consumer are becoming more respectable than they were previously. As enlargement takes place, it is clear that there will be some contradictions. Some of them will be quite absurd in character. I do not want to stir up unnecessary trouble by the way in which I put this, but we shall have situations where we are confronted with the tradition of the common agricultural policy in which we are encouraging, quite expensively at times, the production in parts of Northern Europe of horticultural produce when the same produce will be available much more cheaply and readily and equally if not more deliciously from new applicant States. There will be important issues to be resolved in that context. My hon. Friend the Member for Heeley talked about wine. The hon. Member for North Angus and Mearns talked about how we should approach the process of enlargement. and he made a significant and useful point here because he said it was not as though we looked at the future of the CAP in isolation from the process of enlargement itself but that we used the two realities in the life of the Community to try to reach for the rational solutions which we were all seeking because it would be impossible to continue along the present road once enlargement took place. I am very glad that the hon. Member for Harborough and my hon. Friend the Member for Heeley spoke about the problems of the developing world. It would not have been a speech for my hon. Friend if he had not made this point. I have seen for myself the anxiety which exists in certain Mediterranean countries and North Africa about this problem. They are worried already about the Mediterranean dimensions of the CAP in the existing Community of nine. Incidentally, we have no intention of repeating in the southern part of the Community the mistakes which have been made in the North. More than 70 per cent. of the Community budget going on the CAP is bad enough. We cannot contemplate its rising any higher. But if we face up to the difficulties which exist for certain countries in North Africa, to look no further afield, which have in the past geared their economic life in many ways to servicing the market of the countries which are members of the Community, I think that we have a very heavy moral responsibility in the Community to ensure that we work out together with them strategies for their future which mean that we do not benefit at their direct expense. There are some quite traumatic experiences in those countries at the moment, where they find that agricultural techniques and priorities which they thought were secure are suddenly of no value. The hon. Member for Devon, West gave us an illustrative anecdote about the way of life in France and how the CAP helped to maintain a certain kind of picturesque social existence in rural areas. I had a very happy family holiday in France this summer, and I came to the same conclusion. I saw that the average number of cows per farmer seemed to be about five. It appeared to be a very attractive way of life, although not a very prosperous one. But, when compared with the tensions and hardships of urban existence for many people in other parts of Europe, it seemed to be a very attractive way of life. I compared this in my mind—not that I have any direct knowledge of agricultural matters—with the knowledge that one of the achievements in Britain of which we should be proud is that we have probably the most efficient system of agriculture in the world, with very high productivity. At a time when people like to talk about the imperfections in British society, I wish that this was more generally recognised. We have a problem as we approach the future of the CAP. We are really saying not that we shall cynically turn our backs on people in other parts of the Community but that there is a need for a relevant social policy, although it is nonsense to finance it directly out of an agricultural policy. The institutions of the Community have been mentioned at some length. This matter was raised by the hon. Members for Mid-Oxon (Mr. Hurd) and Sevenoaks (Sir J. Rodgers). Two issues arose. One related to the efficiency of the Commission and the  Council of Ministers. The other related to the relative roles of these institutions and also embraced the European Assembly. In regard to the efficiency of the Commission and the Council of Ministers, I am always sceptical about bureaucracies. I do not use that phrase pejoratively. However, it is possible for bureaucracies to become institutionalised and there is a tendency for them to order their affairs in a way that is convenient to them. Therefore, it is important for us to have elections from time to time so that Ministers may challenge those bureaucracies in order to give the younger generation a chance to come into their own, to express their frustrations and to set out their priorities about the existing order. I am not suggesting that the Commission has always worked in the most effective way possible, but it has shown some flexibility. This issue should be examined in the context of enlargement when we consider how large the Commission should be and whether we should take the opportunity to streamline and rationalise. On the subject of the role of Ministers, there is one issue that goes to the heart of the problem of democratic control within the Community. On the one hand, it is tempting to argue that we should put more of the work of the Council of Ministers into the hands of the Committee of Permanent Representatives so that Ministers can concentrate on the serious and key political issues. I worry about that matter, if I may be candid with the House. In implementing agreed strategic policy, there appears to be a thin dividing line between policy and administrative technique. Although it is wrong for Ministers to be preoccupied with matters that are not of the political substance to require their being on the agenda of the crowded meetings of Councils of Ministers, we should, nevertheless, be a little cautious that we do not give officials in that committee more political responsibility than they should have. This brings me to the point of the relative strength and place of the various institutions in future. I see the future of the European Assembly as falling within strictly defined terms as a consultative review body in terms of political control.  I believe, as do Her Majesty's Government, that political accountability must be through the Council of Ministers to the domestic home Assemblies and Parliaments from which they come. I have every confidence that that is how it will be in future. If that happens, I believe that, although there may he a tendency for the Commission—not maliciously but almost inevitably—to try to play off the European Assembly against the Council of Ministers, and through the Council of Ministers the domestic Parliaments, I do not think that that will happen. I believe that rapidly Ministers will see where their roots lie and where their accountability rests and that the Parliaments and national Assemblies to which they are accountable in their home countries will be clear about the subject of accountability. In that sense, I believe that the continued tendency towards the ascendancy of the Council of Ministers in the Community will continue. The question of criteria was also mentioned in respect of the order in which we admit candidate nations to the Community. There is nothing very special, highfalutin or sinister about the way in which this is done. It simply reflects the order in which countries have applied for membership. That is the way in which we are proceeding. On the subject of the transitional period, I do not agree with the hon. Member for Mid-Oxon. I believe that there is value in having an approach which envisages a timetable with target dates. This means that people have to get on with the task. They cannot go on prolonging the agony and try to play for advantage as the date is put off and readjusted. On the topic of languages, I believe that there are some interesting points to be considered. In a practical sense, we shall face all the difficulties of simultaneous translation, with all the expense involved. But in a genuine community of nations one has to give due weight to the right of any Minister or representative of a member nation to participate fully in his own natural and native language. It is likely that we shall see a practical, pragmatic solution to this problem in which people will have this right and some of them will regularly exercise it  However, a great deal of the work carried out in committees and elsewhere will be carried out in a few working languages, thereby achieving the economies that we all want to see. I wish now to deal with the subject of political co-operation. As soon as any applicant nation becomes a member, it has the full right of membership automatically—just as we had. We look forward to that aspect because we place importance on the subject of co-operation. The other anxiety mentioned by several hon. Members relates to the worry in respect of Western Europe being larger than the Community and how we should tackle this matter. In my responsibilities, in which I look to our relationships with Western Europe as a whole, not simply connected with the EEC, I have found this anxiety reflected among non-member and non-applicant States. They have put to me a realistic attitude. They have said "We understand that it is inevitable in the process of the life of the Community that Ministers will get used to thinking together and working together and of having automatic recourse to consultation about the wider international issues. However, will that be at the expense of our being able to influence events when they affect us equally strongly?" It is most important that the Community can reassure others that, however well political co-operation may be going, it must never be at the expense of a good dialogue and co-operation with other members of Western Europe. This is true not only in a wider political sense but even in the context of defence alliances. There are those in NATO who are not members of the Community, and they have every right to influence the policies of NATO, as do those countries which happen to work together in other respects within the EEC. This point needs to be watched carefully. It is right that Turkey has been particularly mentioned in this context. As realists, we know that there are special problems about Turkey. There are special problems at present between Turkey and Greece, and these centre not only on Cyprus. It would be sad if the problems between Turkey and Greece were to become problems between Turkey and the Community as a whole. From  that standpoint, we must work hard to solve these matters. At the same time, we should not overlook the case of Norway, Switzerland, Austria and others.

Mr. Spriggs
Will the Minister give the House some vital information about the trading surpluses between the United Kingdom and Community countries with which we are in membership, and will he say whether those surpluses compare with the previous two years?

Mr. Judd
I think, with great respect, that my hon. Friend's question will be more appropriate to the debate tomorrow, in which he may have the opportunity to speak. We are dealing today specifically with the question of enlargement. I stress that, as enlargement takes place, the dividing line between the countries in the Community and those outside will in some ways become even more significant than it is at present. We shall have to be even more conscious about the need to find effective political relationships with those not part of the Community. It may be that the Council of Europe has a very important part to play in this respect. I know that the hon. Member for Sevenoaks and others in the House worked very hard in the Council of Europe to achieve just this. What is this endeavour all about? In this context, the recurring theme throughout our debate has been a general recognition that we are not talking just about economic and social mechanisms. We are talking about the whole concept of free and open democracy, although there are variations in the way that it is applied in individual countries. It is about the quality of democracy that we are concerned, whether we are in favour of the Community or against it or in favour of enlargement or against it. This brings me back to the point about institutions. I always put it to those who are genuine and sincere federalists, who have a commitment to a closely integrated, centrally governed Community that this is a denial of the different character that makes Western Europe worth living in. It seems to me that it is almost a tendency to want to create in Western Europe, perhaps with a few more human rights and a bit more freedom, a reflection of the society that we all criticise in Eastern Europe, which  is run on a highly-centralised, bureaucratic basis. If we are talking about a society that is worth having, a society which we believe must have the economic strength which is essential to survive, we have to recognise that its inherent qualitative difference is that it cannot operate on a basis of over-centralised bureaucracy. It must operate only on the basis of maximum decentralisation, maximum individual integrity and responsibility for people individually and in groups throughout society. If we are talking about this redistribution of power in society and within the Community, I think that we in Britain have a message for our colleagues in the Community. It is this. It may at times become very frustrating that the pace of the Community cannot be more rapid. It may become very frustrating for them. There may be a temptation to try to take short cuts. There may be a temptation to try to work out on a piece of paper solutions to all our problems and then to rally support behind those solutions. That may work well in elitist types of political systems but we are a pluralist, mature democracy, and in our system it is a matter of winning support for our objectives and priorities. The hon.  Member for Mid-Oxon was right to talk about the possibility of slowing down as the whole process of enlargement takes place. That is not something to fear. If we are really building a community of individual nations as distinct from trying to impose an authoritarian system on Western Europe, this must take time. It must take enough time to absorb the differences and the creative traditions in the various parts of the European Community. I believe that what we are talking about and what enlargement gives us an opportunity to strengthen is the building of a community—I emphasise that word once again—and not a homogeneous bloc. A community draws its strength from a variety of traditions and, if it does so, part of its responsibility is to nurture those traditions. In that sense, I think, the process of enlargement will help us forward practically to the fulfilment of the only kind of viable political community in Western Europe that makes sense if we are genuine democrats.

Question put and agreed to.

Resolved, That this House takes note of Commission Documents Nos. S/763/78 and Addenda 1 and 2, and S/911/78 and Addendum I on enlargement of the Community.