HC Deb 04 February 1971 vol 810 cc1936-43
The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)

With your permission, Mr. Speaker, and that of the House, I would like to make a statement on the Ministerial meeting of the Conference with the European Economic Communities on Tuesday of this week.

The meeting recorded a number of agreements.

The Community confirmed that the alternatives in its 1963 Declaration of Intent should be open not only to the nine African Commonwealth countries which I mentioned in my statement to the House on 10th December but to Botswana, Lesotho and Swaziland as well, subject, in their case, to certain special arrangements which may need to be settled at a later stage.

The Community further confirmed its proposal to include Hong Kong in its scheme of generalised preferences from the date of its implementation. We accepted its proposals as settling the case of Hong Kong as raised by us in the framework of the negotiations for accession.

We agreed upon the way in which the enlarged Community would approach the problems of the Asian Commonwealth countries, countries for which association is not appropriate. The enlarged Community would continue to be inspired in its trade relations with these countries by the wish to extend and reinforce this relationship. It would be ready to examine with these countries, after enlargement, and taking account of the scope of the generalised preference scheme, the problems that might arise in the field of trade with a view to reaching appropriate solutions.

It was agreed that the Anglo-French condominium of the New Hebrides should be associated with the enlarged Community.

I welcomed a statement made by the Community on transitional arrangements in the field of industrial tariffs, which we thought should broadly meet the aim we have had in mind, in making our own proposals, of promoting as rapidly as possible the dynamic effects of industrial integration. But this arrangement, it was made clear, cannot be regarded as definitive until agreement has also been reached on methods of transition in the agricultural field.

There was an exchange of views on the question of Community finance. I cannot say that any agreement was reached. But I hope that there is now a better understanding of the issues involved in this field, which is, of course, of crucial importance to the success of the negotiations. I left the Community in no doubt of this fact.

Mr. Harold Lever

We welcome what the right hon. and learned Gentleman has said about the progress in relation to Botswana, Lesotho, Swaziland and Hong Kong, and, indeed, the remarkable novelty of Anglo-French agreement on the Anglo-French condominium of the New Hebrides; but on the crucial point of Community finance there is nothing here at all. I ask the right hon. and learned Gentleman to treat the House with as much candour as he treated the Press conference in Brussels. He should tell us what progress he has made and what attitudes were adopted, and give us a little information on this central issue.

Moreover, can the right hon. and learned Gentleman help us also on the financial discussions relating to the sterling area and ancillary matters? I do not want to put him in difficulty on this matter, because I know that some of these matters are at a confidential stage, but can he give us a rather clearer indication of what position in general principle the Government are adopting in relation to these financial sterling area discussion?

Mr. Rippon

I felt it right to report to the House the progress which was made, which was welcomed, I think. It was also very important to the countries which were affected, and I think it will be welcomed by them.

As for Government policy, we had a two-day debate in the House in which I set out the Government's position. What I took the opportunity of doing at Brussels was to reaffirm the basis of the proposals which I laid before the House on 16th December last.

As to sterling, this is not a problem directly related to the negotiations. There was no discussion about this at the Ministerial Conference in Brussels.

Mr. Turton

On Community finance, my right hon. and learned Friend is reported to have described his proposals as generous. Is not the cause of the present disagreement the fact that his original acceptance of the agricultural policy was premature and over-generous, bearing in mind that it would involve Britain in a gross contribution of over £600 million?

Mr. Rippon

I think that my right hon. Friend is referring to a figure of £670 million in the White Paper of February, 1970. We discussed that in debate. It is the upper theoretical limit, and, I think, not relevant to the figures which I have been laying before the House and which we have been discussing at Brussels. What we have been concerned about are the arrangements to be made in the transitional period where we want a balance of mutual advantage maintained between the applicants and the existing members. There is no doubt that at the end of the period we shall be enjoying very considerable dynamic benefits on the industrial side which must be offset against our contribution to the Community budget. All these factors must be weighed.

Mr. Jay

On the question of the financial contribution, does the right hon. and learned Gentleman agree that what really matters is not these temporary arrangements but the permanent burden falling upon Britain? Is it not true that on the arrangements he has already accepted the gross burden would be about £600 million a year and the net burden about £450 million or £500 million? Will he confirm that?

Mr. Rippon

The right hon. Gentleman is exaggerating the position, as I explained in detail in the debate, and as I think he well understands. He must not always talk about the eventual burden without having given thought to the eventual advantage. If, as I told the House in the debate and as the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) told the House when he was Chancellor of the Exchequer, there is a result of our joining the Community of just ½per cent. increase in our G.N.P. over five years, that is a benefit of £1,100 million. It is also important to have regard not just to what is called the gross burden but to the net contribution we make having regard to our net receipts. Therefore, I have been raising in Brussels the question of the size and shape of the budget in the years ahead.

Mr. John Wells

I welcome what my right hon. and learned Friend said about some of the overseas territories, but when can he give us some assurance that the best interests of the Channel Islands will he safeguarded?

Second, my right hon. and learned Friend touched only momentarily on agricultural matters. Can he give us any early indication of squaring the remarks made by himself and my right hon. Friend the Minister of Agriculture, Fisheries and Food about cheaper fruit and vegetables when at the same time he assured British producers that their position will be safeguarded?

Mr. Rippon

What my hon. Friend must have in mind as regards the last part of his question is that there will be a very long transitional period up to 1978 in which there will be a great deal of opportunity to discuss how these arrangements will work out in practice.

On the general question of the cost of living, certain items, as we know, are more expensive in the Community and other items, such as fruit and vegetables, are cheaper.

I have been in touch with representatives from the Channel Islands. This matter has not yet been raised in the negotiations, but we shall certainly have to deal with it.

Mr. Mackintosh

In view of the statement of the German Foreign Minister that he expects British membership by 1st January, 1973, and in view of the greater support for our position among many members of the Community, would the right hon. and learned Gentleman think it helpful to set a date for a summit conference of members at The Hague if by that date progress had not been made, with a view to getting the negotiations pushed through?

Mr. Rippon

I do not think that it would be appropriate to do that. We are making reasonable progress at this moment and there is certainly a greater understanding in the Community of the British position and the basis of the proposals we have put forward.

Sir D. Walker-Smith

As the figure of £600 million at the end of the transitional period is a correct one based on the continuation of the present workings of the Community budget, will my right hon. and learned Friend say what progress has been made in securing agreement to a substantial modification of the pattern of that budget after 1980 so as to reduce the net sum for which we should be liable?

Mr. Rippon

We have put forward our calculations, as I explained to the House, on the basis of a budget of either 3,000 million units of account a year or 4,500 million units of account, and on the basis of getting 6 per cent. of receipts. In the reply which it put forward, the Commission talked in terms of a budget of a different size and shape, of which our contribution might, at the end of the day, be of the order of 20 to 25 per cent.—it thought that 20 per cent. was more likely to be nearer the mark—with net receipts of 10 or 15 per cent. We cannot go into detail on the figures until we have reached a further stage in the negotiations. The House should bear in mind that there are many factors to be considered.

Mr. Cledwyn Hughes

The Chancellor of the Duchy has referred in his statement to agreements reached in connection with 12 African Commonwealth countries and also Asian Commonwealth countries. He has said nothing about Caribbean Commonwealth countries, or about associated territories, which are heavily dependent for trade on this country.

Mr. Rippon

All the other territories which we have referred to at various times are still under consideration. It was agreed that we should consider the position of association for the Caribbean countries in the context of the Commonwealth Sugar Agreement. I am taking the opportunity next week to visit the Caribbean to discuss with the Ministers concerned and the sugar producers the problems raised. As to the territories elsewhere—in the Indian Ocean, the Pacific, Mauritius, Fiji, Samoa and Tonga—we have still to settle the position about them. I also took the opportunity, in the course of discussing this matter, to raise the special position of Papua and New Guinea. They cannot be directly associated with the Community because of their special position. Papua is directly administered by the Australian Government. New Guinea is a United Nations trust territory. But we have agreed to exchange information about that problem also.

Mr. Blaker

Is my right hon. and learned Friend aware that the agreement which he has reached about Hong Kong is an important one and will be much welcomed in the Colony? Would he not also agree that this is not the end of the matter? Would he give an assurance that he and his right hon. Friend will be pressing to make sure that the widest possible range of products would be accepted by the Six as falling within the U.N.C.T.A.D. agreement scheme?

Mr. Rippon

I cannot say that the agreement we reached with the Community would cover all the requirements which Hong Kong might put forward. But it represents a great step forward. It also gives us an opportunity of trying to persuade the United States and Japan to give similar treatment to Hong Kong, which would be a help.

Mr. Shore

Would the Minister stop playing with the House? On the critical issue of how much we shall be contributing, we have had a hundred times as much information in every newspaper as the right hon. and learned Gentleman has offered us this afternoon. This is a disgrace. Would he say, first, what the range of argument and disagreement on figures in the transitional period has been, and then would he kindly answer my right hon. Friend's question as to the percentage of how much we are expected to pay at the end of the transitional period? Will the Minister kindly not assert that he does not know, because one of the main arguments in Brussels is the difference between his 13 to 15 per cent. at the end of the transitional period and the jump that that would mean as we move into the post-transitional period?

Mr. Rippon

The size of the jump depends upon the discussions we have on the likely size and shape of the budget. It is important to bear in mind that all these matters are speculative when looking that far ahead. I must pro- test at the right hon. Gentleman's suggestion that the House has not had information which is available elsewhere. On 16th December I explained the basis of the Government's proposals and the implications, in financial terms, of those proposals as far as one could make an assessment of them. Furthermore, we had a two-day debate in the House on 20th and 21st January, when we went into it in further detail. An inhibiting factor is that there are certain proposals appearing in the newspapers resulting from reports of what the Community is thought to be thinking. Sometimes these are helpful and sometimes they are not entirely accurate. But I can give the House only information about the British Government's position, which I give fully to the House as soon as possible, and I report the Community's reactions to our proposals.

Mr. Speaker

Order. I must protect the business of the House. I am prepared to call only one more hon. Member from each side. Mr. Neil Marten.

Hon. Members


Mr. Marten

In order to satisfy both sides of the argument, would not my right hon. and learned Friend accept that this is a very suitable occasion for him to confirm that the proposals which he put forward in the negotiations last Tuesday about our opening contributions were put forward in absolute sincerity and were not, as the French tried to imply, a joke? If they were put forward in sincerity, would he not retreat from them in the future?

Mr. Rippon

I do not quite follow the purpose of the questions. I can certainly assure my hon. Friend that the British proposals were put forward as a fair and reasonable basis of negotiation.

Mr. Milne

Will the right hon. and learned Gentleman undertake that in future statements he will give the same amount of information to the House about the negotiations as he gives to Press conferences after those negotiations have taken place? Second, does not he realise that associate membership means different things to different countries, and will he give an indication of the effect on the East African States of associate membership compared with Mauritius and some other countries which are entirely dependent on a single product? To tell the House about associate membership only is to give us no indication about how the negotiations are proceeding.

Mr. Rippon

I assure the House that I answer questions just as freely here as I answer them at Press conferences. I cannot control the quality of the questions. As for associate status, we have negotiated on the same basis as in the period 1961 to 1963, urging the Community to offer to the independent developing Commonwealth countries the same alternatives as they were prepared to offer in the period 1961 to 1963. They are independent Commonwealth territories. We are not negotiating directly on their behalf. In due course, they will make up their own minds which of the alternative courses they would prefer—either associate status or a trade agreement, or some other special trading arrangement. We must leave this to them. Bearing in mind that there are enormous variations in the problems between the various countries, we are trying to see that arrangements are made which will protect the particular member of the Commonwealth concerned.

Mr. Barnett

On a point of order. I thought, Mr. Speaker, that you intended to balance the debate. You appear to have called two anti-marketeers immediately following your last remarks.

Mr. Speaker

The Chair is in difficulty in this matter. It does not always know how hon. Gentlemen's minds are working. It tries to obtain a balance. But the right hon. and learned Gentleman is able to look after himself without further assistance.