§ The Lord Privy Seal (Mr. Edward Heath)With your permission, Mr. Speaker, and that of the House, I wish to make a statement on the progress of the Brussels negotiations.
The ministerial meeting which began on 20th July was concerned with two 958 important aspects of the development of the European Economic Community's common agricultural policy—arrangements for annual reviews and the provision of a further assurance for farmers in the Community.
The arrangement worked out at this meeting contains the following elements: First, there will be an annual review of agriculture in the Community as a whole —a Community annual review. The information which member States will have to provide to enable the Commission to prepare this comprehensive review of the situation and the economic prospects of agriculture in the Community has been agreed between us in detail. In addition, member countries of the Community which wish to do so will previously carry out their own annual reviews.
The results of such reviews, together with any observation which member States concerned wish to put forward about them, will be forwarded to the Commission and taken into account by it in preparing the Community annual review. The Commission will also carry out consultations with representatives of interested organisations, particularly of farmers.
Secondly, the arrangement sets out explicity what the Community annual review itself is to cover. This includes trends in the profitability of the agricultural industry, trends in prices and costs within the Community and an assessment of their implications for production, consumption, imports and exports.
Thirdly, the arrangement covers the use to be made of the annual review when completed. The Commission must report to the Council of Ministers the results of the Community review and make appropriate proposals to the Council, particularly in the light of these results. The Council will also use the results of the annual review in taking decisions in the implementation of the Common agricultural policy.
Fourthly, the Community has accepted in this arrangement that, if the annual review shows that the remuneration in the agricultural industry does not ensure for the farmers of the Community or of particular areas of it a fair standard of living, in conformity with the objectives defined in Article 39 of the Treaty, the Commission will take up the question 959 either on its own initiative or at the request of a member State. The Commission will then submit to the Council of Ministers proposals to remedy this situation, and the necessary decisions will be taken by the Ministers.
To sum up, an arrangement has been reached for the establishment of a comprehensive Community review incorporating the results of those undertaken by national Governments. Its results will be applied by the institutions of the Community in the construction of a developing common agricultural policy. The Community has also accepted that there should be a general assurance with regard to farming incomes and has agreed upon the procedure by which this assurance must be implemented.
These are very important parts of our negotiations affecting domestic agriculture. Tomorrow, in Brussels, we shall return to other aspects of them, namely, certain commodities and horticulture. The ministerial meeting will continue for the remainder of the week and will deal with other important issues in the negotiations, in particular, those concerned with Commonwealth trade. I expect to make a further progress report to the House next Monday.
Mr. H. WilsonIn the light of his most recent visit to Brussels, will the right hon. Gentleman say whether he is still confident that we shall have a general outline of the shape of the agreement by the end of the month?
Does the right hon. Gentleman recall that, in the Common Market debate last month, the Minister of Agriculture, unlike the Lord Privy Seal himself, went into great detail as to what he would require in the negotiations? Have the conditions expressed by the Minister of Agriculture in that debate been met, recognising, of course, that the matter of horticulture has still to be settled?
Will the right hon. Gentleman say what he understands would come out of the annual price reviews? Are they, as in this country, to be a determinant factor in the settling of the level of farmers' incomes? If they are, does that mean that they will have a direct effect on the prices to be settled by the Community?
§ Mr. HeathIt remains the objective of all seven Governments in the negotiations to work for this outline in the coming series of meetings this week, and I have every confidence that, if it is necessary to do so, we shall continue thereafter in order to try to complete the outline.
My right hon. Friend the Minister of Agriculture said in the debate in the House that there were a number of things which were required in order to establish a comprehensive common agricultural policy. The two parts in the arrangement we negotiated last Friday are very important parts of it. The remaining parts, apart from horticulture, are, of course, the individual commodity arrangements which we are to resume discussing tomorrow.
As regards the effect of the review, I described in my statement how action will be taken following the review by the Commission and the Council of Ministers. This will be in all the developing aspects of the common agricultural policy, including price policy. The right hon. Gentleman referred to the price review in this country as being a determinant. It is not correct to say that there is any automaticity about it. [HON. MEMBERS: "Withdraw."] Although it cannot be withdrawn from the OFFICIAL REPORT, I hasten to withdraw it from the cognisance of the House. No automatic process follows the price review. The Government of the day have to take their decision in the light of that and of a number of other factors. In the same way, the Commission will make proposals and the Council of Ministers will take the decision.
§ Sir H. Legge-BourkeWill my right hon. Friend say what is meant both by Her Majesty's Government and by the other Powers by providing farmers with "a fair standard of living"? Does it mean what we in Britain consider to be a fair standard of living, or the common mean of the whole Community?
§ Mr. HeathIn dealing with incomes one has to use a phrase of this kind. We ourselves in our Agriculture Act, I believe, use the phrase "proper remuneration". This is a phrase which has to be interpreted and, in this case, the Treaty of Rome always uses the phrase "fair standard of living". In 961 this arrangement, it is linked with Article 39 of the Treaty which points out, first, that the object is a rising amount of individual incomes and also, as a connecting phrase, of the relationship between agriculture and the rest of the economy. It is in the light of Article 39 that our own particular situation must be assessed.
§ Mr. PeartThe other week the right hon. Gentleman gave the House, in the form of a White Paper, the text of his speech to the Council of Ministers, dealing with Euratom. Would it be possible to have a similar White Paper on the Government's approach to agriculture? Can we have a statement by the right hon. Gentleman and the views of the Minister of Agriculture in relation to what the right hon. Gentleman has said this afternoon? The House should be informed not only of the general approach of the Government, but of the details of what our people put forward in Brussels.
§ Mr. HeathIt has become the practice that the opening statement of each series of negotiations with the Economic Community, Euratom, and the Coal and Steel Community should be published as White Papers, and the political statement to Western European Union, but we have not published individual conference documents nor statements made by the Ministers taking part. But I think that the hon. Gentleman, on reflection, will realise that, since these negotiations went on from quarter to seven in the evening until ten to four the following morning, this was a question not of making a prepared statement but of detailed and continuous negotiation over the whole field.
§ Sir H. HarrisonI should like to thank my right hon. Friend for his statement, which is encouraging in the beginning. Is he aware that farmers as a whole and all those associated with them await the details which we may have next week because they want to be quite certain that before we enter the Common Market they will have the chance, to which my right hon. Friend referred, of an expansion of their industry as well as of industrial industry?
§ Mr. HeathWe will make the information available at the same time as the other detailed information about the negotiations is given to the House.
§ Mr. GrimondCan the right hon. Gentleman say whether in these latest discussions anything further was said about schemes such as the marginal production scheme? Has there been a discussion of schemes similar to that and their treatment? We appreciate the right hon. Gentleman's difficulty in coming back to this country and speaking English after his long sojourn abroad, but can he be more specific about the review? Does it include all agricultural produce—for instance, mutton and lamb?
§ Mr. HeathThe answer to the first part of the right hon. Gentleman's supplementary question is that we have not yet dealt in detail in the negotiations with the particular form of grants to which he has referred, although, of course, that is obviously a matter of great importance. Secondly, the reviews deal with all commodities.
§ Mr. FarrCan my right hon. Friend tell me what will be the value of our domestic price review if our Government are to have only advisory powers on its implementation? Is not there a real danger that when the Council of Ministers comes to consider the recommendations it may concentrate its improvements on some of the less qualified areas in Europe, such as the peasant farmers of Italy or, indeed, of France, to the detriment of our own farming community?
§ Mr. HeathNo, Sir. First, the review will, in exactly the same way as it does at the moment when held nationally, give a full account of the existing position and of prospects and so on. It is, therefore, of great importance in that respect on its own. Secondly, it enables the Government to form their own opinion about the state of the agricultural industry. Thirdly, the Government are not in an advisory capacity. They have their full membership of the Council of Ministers, which takes the decisions. Fourthly, the undertakings of the Community are treaty undertakings to which this will be a protocol and which the Community is therefore bound to carry out. There are the normal institutions of the Community for seeing that they are carried out.
§ Mr. NabarroWhile congratulating my right hon. Friend on significant progress during the last few days, may I ask him whether he will bear in mind later this week in Brussels two very important things? The first is that the acceptance of the principle of an annual price review does not necessarily mean adequate support prices for British farmers. The second is that we would dispose of a very great objection by the farming community to entry into the Common Market if horticultural products could be brought within the ambit of the annual price review which, although it has always defeated us in Britain, has been found practicable elsewhere?
§ Mr. HeathMy hon. Friend is. of course, right that the price arrangements for the individual commodities are of the greatest importance. That was why I said that we are returning to the matter of the individual arrangements when we start negotiations again in Brussels tomorrow. At the same time, I hope that my hon. Friend and other right hon. and hon. Members of the House will recognise that there has to be a balance in price policy in a community between its own domestic production and its imports. This applies to us as a country and to the enlarged Community, and it is of the greatest importance for Commonwealth trade in these foodstuffs.
My hon. Friend raised a very important point about the horticultural industry. That we shall discuss tomorrow, but it is not included in the present arrangement.
Mr. H. WilsonWhen the annual review has been done in each country and the results reported to the Community, when there has been the Community review and the Commission has made its recommendation to the Council of Ministers, will a decision on those recommendations be by a simple majority, a qualified majority or a unanimous decision? Secondly—this matter was raised by the right hon. Member for Orkney and Shetland (Mr. Grimond)—are we right in understanding that production grants can continue while deficiency payments cannot, that they have to be Community-wide in their arrangements, paid by the Community, and that there cannot be any nationally organised production grants?
§ Mr. HeathAs I have said, we have not yet had discussions in the negotiations about the future arrangements for these grants. Neither has the Community as a whole finally fixed its policy on this matter. The voting procedures at all stages come under the normal voting procedure of the Community, which is, broadly speaking, a unanimous vote up to the end of the second stage and thereafter a qualified vote. But it will depend on particular items of policy with which it is dealing as a result of the statistics and information in the reviews.
§ Mr. Emrys HughesIs the right hon. Gentleman aware that there is great concern among the farmworkers in Scotland as to whether these negotiations will result in a reduced standard of life? Can he give us an assurance that throughout all these negotiations he will defend the standard of life of our agricultural community and will not agree to anything which will mean a reduction in the standard of life of the agricultural workers?
§ Mr. HeathYes, Sir. As I have said, that is particularly referred to in Article 39 of the Treaty. That refers to
increasing the individual earnings of persons engaged in agriculture".That was why the question of earnings was coupled with the assurance about a fair standard of living.
§ Mr. SpeakerOrder. I realise that this matter raises very wide and interesting topics, but we cannot have a debate without a Question being before the House on each of them.