THE GREAT DEBATE (2)
The White Paper
A SENIOR CONSERVATIVE
The recurring annual cost of EEC entry to the balance of payments after the transitional period will be £500-£600 million.
that is to say, it will be more than the record surplus of 1970, which was achieved at the cost of unparalleled stagna tion and inflation. Unless substantial and indeed record growth is achieved during the transitional period we will have to run at least as hard as we have done in the last five years, not merely to stay in the same place, but to prevent the country going into deficit. And this transitional period is recognized, even by pro-marketeers, as the one in which we will suffer the other costs ' of entry most severely. The resulting situa tion would frighten any government. Labour's failure from 1964 onwards can at least be attributed to trying to do too many generous and popular things on too narrow an economit base with too little expertise. The Tory failure that would be produced by entry into the EEC would destroy for a generation, in a way most certain to embitter the electorate and impair national morale and identity, the party's claim to good economic management, on which much of its electoral success in the past has depended.
The £500 million cost to the balance of payments was the figure used by Mr Rippon when he pleaded unsuccessfully with the Six for help in easing Britain's position in the transitional period. A few weeks ago Mr Heath authorized Mr Whitelaw to mention that figure in his lobby briefings, giving the Lord President of the Council the impression that the cost would be openly acknowledged in the White Paper, which would also spell out the counter-advantages. In the event, of course, the figure did not appear in the White Paper — on the specious ground put forward by Mr Rippon that barefacedly to insist that the cost would not be unbearable would be a cleverer trick than to give a £500 million hostage to fortune.
No such consolation as is available to Mr Whitelaw can be found for those people who will suffer most from the extra twist EEC entry would give to the inflationary spiral. For some time the Gov ernment has been aware of he fact that some of the deepest worries about entry were coming from the constituencies, especially the southern constituencies, which contain large numbers of pensioners. Naturally, therefore, a promise was made that pensioners would be protected from inflation caused by EEC entry, and this Promise duly appeared in paragraph 90 of the White paper. As phrased, it is simply not true.
The White Paper talks about "retirement pensioners." In fact what it means is state pensioners." A third of the retired People of Britain are occupational, or Private, pensioners, Contrary to the impression left by the White Paper, no plans have been made to help them. Yet they voted solidly Tory in the general election because the Tories persuaded them, rightly, that the Labour pension scheme would damage their interests. One of the fundamental Conservative objections to the Crossman pension plan — which was abandoned at the election — was that it did nothing to help existing pensioners. The Tory alternative was designed to remedy that defect. It was to be put into legislation next year, but Sir Keith Joseph has now been told it will have to wait indefinitely in order to leave most of next session free for EEC legislation. Because pension legislation takes a long time to become effective the best friends of Conservatism at the last election will have to wait a very long time for help. Nor are state pensioners safe. The White Paper stresses that the Government are " committed " to review the level of state pensions every two years. But that commitment, as expressed in the Manifesto, was to make a two yearly review statutorily compulsory. That pledge, too has been abandoned, for there is no provision in the current pensions Bill for statutory review. Which, of course, is why Sir Keith Joseph had to insist on paragraph 90 of the White Paper being re-written.
If, in spite of this, the promise is kept, workers' insurance contributions will have to be increased in order to pay for it. In addition food prices will rise by 16-20 per cent, over the transitional period, on top of the current inflation, as the White Paper admits. Yet, and this is the really extraordinary feature of the White Paper, the Government believes that money wages will not rise significantly during the transitional period. How this can possibly be so it is impossible to see. Does the Prime Minister really think that the Government's policy of wage restraint will have spectacularly more success over the next six years than it had in the last year, in spite of increased costs to the ordinary consumer? It is difficult to suppose that he does. But, if he does, one can only say that there has never, since Canute, been so remarkable a triumph of hope over experience.
There has, nevertheless, been very little questioning of the long-term benefits of entry. It is certainly the case that really big British industry — the parts of it that can be absorbed into European, continentbased companies — will do very well, eventually. But the consequences of transition will certainly be such that the British community will be the last to share in their increased wealth. This is because, given the economic and social disruption that will follow entry, their investment emphasis will switch to the continent, with the result that, once restrictions on capital movements are removed, Britain will be drained of the capital funds so badly needed for investment as the Tory shakeout of industry continues. This was why, naturally, the Six demanded the abolition of British safeguards on capital exports and got it. It was for this reason that they refused to give Mr Rippon alternative safeguards, when he asked for them. For this reason, naturally, the White Paper is wholly silent on this subject.
Such is the reality behind the windy rhetoric of the first sixty-six paragraphs of the White Paper, which could so blandly combine silence and deceit because, unlike the White Paper of the Labour government, it was not a composite of the drafts from different departments, so much as an individual concoction by Mr Heath and Mr Michael Wolff, formerly his speech-writer, and now assistant to Mr Whitelaw, but still the Prime Minister's watchdog in the Lord President's office, The Cabinet were placed, when discussing it, not in the normal position of men defending the views of their departments, arrived at by ministers and civil servants in common, but of trying to alter an entirely idiosyncratic draft.
Anyone who doubts the truth of the ac count given in this article needs only to look againat the various prevaricatory statements made by the Government about the future of the British steel industry. First Mr Rippon told the House that there was no question, in the negotiations, of any change in the British Steel Corporation. Then the Prime Minister repeated and amplified that statement. Then, following a newspaper leak, Mr John Davies inserted at the last moment into a speech in the House the fact that the Government would lose price and managerial control over the corporation, the rise in whose prices during the transitional period would be a major cause of the death of the industry as a result of European competition. Then the Government insisted that the British Steel Corporation's plans for expansion would not be affected by entry, which could in fact be true only if it retained its present position in the market. Of course the White Paper does admit that "no question of unfair subsidization " may arise, but this means only the Government's present relationship with the industry, which is antithetical to the EEC system, must end and that, whatever happens, the British government will be unable to protect it.
In spite of all this, Mr Heath insists that there is no difference between the situation now and his attitude to it and the situation in 1967 and Mr Wilson's attitude to it. This, however, though announced in the House of Commons, is manifestly untrue. For, in December 1969, a new factor was added to the situation, when the Six announced, after their Hague conference, that Britain, if she wanted to come in, would have to accept, not merely the Treaty of Rome (which was Mr Wilson's position), but "options made in the sphere of development" as well. Among the documents on the future of British industry which the Government have declined to publish, there is set out our acceptance of these options, which are far more onerous than the terms of the Treaty itself. Needless to say, the ' options are nowhere discussed in the White Paper. But any MP will fail in his duty who does not, in the ' take-note ' debate, insist on a supplementary White Paper to spell out the obligations entered into through Britain's commitment to the ' options ' over and above the commitments entered into under the Treaty (not least because it is at this point that the real secrets of the Rippon negotiations are to be found).
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