HC Deb 03 December 1973 vol 865 cc1035-48

Order for Second Reading read.

9.56 p.m.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Royle)

I beg to move, That the Bill be now read a Second time.

After my hon. Friend the Financial Secretary to the Treasury has made a speech of great length and detail, I apologise if my contribution is not so impressive. This legislation is concerned with the continuation of the immunities and privileges at present enjoyed in the United Kingdom by the International Sugar Organisation in the event of the British Government temporarily ceasing to be a member of it. The organisation was established in 1969 by the International Sugar Agreement of 1968, to which the British Government are a party. That agreement expires at the end of this month, when it will be replaced by a new, but more limited, interim agreement, without economic provisions, and designed largely to keep in being the organisation as a forum where preparations can be made for the negotiation in due course of a fully comprehensive International Sugar Agreement with economic provisions.

The European Economic Community has yet to determine its attitude towards joining this interim agreement. We hope, however, that it will reach a decision soon. But there is a problem of timing. Although the Commission has recommended that the Community should join, it is not certain that the Community will reach a final decision this month. Unless it does, the British Government will not be able to become a party to the interim agreement, and, therefore, continue as a member of the organisation, as from 1st January.

It is therefore possible that there will be a gap in our membership of the organisation from the expiry of the International Sugar Agreement at the end of this month until we can join the interim agreement or a new international Sugar Agreement. We must ensure that during any such gap there is no uncertainty about the status of the organisation, which is located in London. In particular, we must still be able to extend to it the immunities and privileges which it currently enjoys.

The International Sugar Organisation (Immunities and Privileges) Order 1969, which was introduced by the previous administration, gave effect to the headquarters agreement which was signed on 29th May 1969. The interim agreement will also be administered by the organisation.

If we are obliged even temporarily to leave the organisation there will be serious doubt whether the 1969 order would continue to be effective to implement the headquarters agreement. This is because, under Section 1 of the International Organisations Act 1968, an order such as the 1969 order can be made only if the United Kingdom or the British Government is a member of the body in question. In view of this uncertainty, I am advised that the present Bill is necessary in order to ensure that the 1969 order will continue in force after the United Kingdom ceases to be a member.

The alternative to the Bill would be to terminate the headquarters agreement. Under article 29(2) of that agreement it can be terminated only by agreement or in the event of the headquarters being moved from the United Kingdom. The British Government would, however, be most reluctant to seek to terminate the headquarters agreement or to see the headquarters moved from London.

It being Ten o'clock, Mr. Speaker interrupted the Business.

Ordered, That the International Sugar Organisation Bill may be proceeded with at this days Sitting, though opposed, until any hour.—[Mr. Rossi.]

Mr. Royle

Such action would have unfortunate repercussions in respect of the other commodity organisations located in London, such as tin, wheat, coffee and cocoa. Moreover, London is the main centre of the world's sugar trade, and it is both practical and convenient to all concerned to continue to have the organisation located close to the London market. Particularly as any gap in our membership is likely to be of relatively short duration, I think the House will agree that it would be appropriate that the United Kingdom should continue to act as the host to the organisation.

10.1 p.m.

Mr. Peter Shore (Stepney)

This is a sad little Bill, but it touches on a matter of great importance—the future regulation of world trade in sugar. This is particularly of concern not only to people of this country but to the many countries in the developing world which are greatly dependent on the export trade in cane sugar. Therefore, it would be wrong for such a measure to go through on the nod and escape the discussion and scrutiny which world trade in sugar and the future of the International Sugar Organisation deserve.

It was right that the Minister in presenting the Bill should give some account of the circumstances that have led him to present it, of the purposes it is designed to serve, and of the future outlook for the International Sugar Organisation.

The Bill envisages in Clause 1 an important and unwelcome development, namely— The termination of the membership of Her Majesty's Government in the United Kingdom of the International Sugar Organisation …". That is a matter of profound regret. The Under-Secretary told us that it is hoped that this will not be a termination of more than an interim character. Nevertheless, it would be regretted by everyone if we should cease to be a member.

The first question which comes to the mind of anyone who knows the background is : why does a Bill of this kind have to be presented to the House? Clearly the Minister does not take the view that Britain should not be, with advantage to itself and to others, a member of the International Sugar Organisation. That would not be argued.

The argument, such as it is, would be that it would be tolerable for Britain not to be a member—I personally do not find this a very attractive argument, but I have heard it advanced—if Britain as part of the organisation of the European Community were to retain through the organisation of the EEC a kind of collective membership or were to be still a part member of the organisation through the EEC. As I understand it, that was the original intention.

When the Minister of Agriculture, Fisheries and Food reported to the House in July of this year on his discussions in Brussels on the future sugar régime he said, speaking of the proposals for a new régime which had been put forward by the Community : … they would enable the Community to participate constructively in the resumed negotiation for a new International Sugar Agreement. It was clearly the expectation of the Minister of Agriculture and of many others that the Community would be able to join the International Sugar Organisation before the end of 1973. We know what happened to that. The countries of the EEC could not agree among themselves, and, therefore, could not present a collective mandate to which the Commission could speak in the councils of the International Sugar Organisation when the organisation met to consider a possible new agreement in Geneva in October this year.

Apparently, the major bone of contention among the members of the EEC was whether or not the EEC could agree to be a net importer of sugar, and could thus take a position in the International Sugar Organisation as a net importer, on the Commission's suggestion, of some 600,000 tons of sugar, a total which many of us thought was inadequate from the point of view of the net imports of the Community, and very generous in terms of what that represents in exports of beet sugar from the Continent. So we are clear that the Community could not agree collectively to join the International Sugar Organisation for the reasons I have mentioned.

That being so, I do not understand why the United Kingdom should now envisage its withdrawal from the International Sugar Organisation, and I hope very much that the Minister will explain why he is still persisting in what might have appeared a reasonable strategy if the EEC had joined the International Sugar Organisation. Is it his view that, since we became a member of the EEC, we have, as it were, lost the right to belong in our own name to the International Sugar Organisation, and that if we were to join the organisation after the end of this year, or remained members of the existing organisation after the end of this year, we would be in breach of the Treaty? I hope that when he replies the Minister will let us know the answer, because it is clearly a matter of very considerable concern.

That is the first part of my concern with this little Bill, and I now come to the second part.

It is clear that the Bill envisages that the International Sugar Organisation will continue to exist, even if Britain does not continue to be a member of it. But in what form it will continue to exist, what kind of presence it will have and what kind of functions it will exercise are not at all clear. We should know the facts before we consider giving this measure our approval. We know that from 1968 until the end of this year the International Sugar Organisation will have been a frame into which the very important international sugar agreement of those years has been fitted. What I and, I am sure, the House want to know is what the Minister now expects of the International Sugar Organisation. Does he envisage that it will be an administrative organisation with, perhaps, a secretariat for research and statistical purposes, as I have heard it described, or does he believe, as he led me to believe by his remarks, that a further international sugar agreement will be fitted into the International Sugar Organisation if it is left, as it were, as an empty frame? It would be interesting to know, if he does expect that a further international sugar agreement will be reached, what obstacles he envisages have yet to be overcome.

There is here a point that the Minister might help to clear up. When we last debated sugar on 24th October his right hon. Friend the Minister of Agriculture, Fisheries and Food was quite categoric about, in his view at any rate, what were the causes of the breakdown or the failure to agree a new international sugar agreement. He took the view that it was due to differences between major consumers and major exporters of sugar, and that but for their disagreement—and, in particular, I think he bad in mind Cuba and Canada—an international sugar agreement might well have been reached.

On the other hand, there is the alternative explanation which the Minister of Agriculture was very anxious to rebut, that it was impossible to get an international sugar agreement in October because the EEC was totally unable to reach any agreement on what its policy was going to be and what its position would be in a future ISA. Although, as I say, the Minister of Agriculture rebutted strongly any such explanation, it was interesting to read Commissioner Soames giving his address to the European Assembly on 17th October when he said : The Commission believes that the exclusion of Europe from these important talks "— the International Sugar Agreement talks— was not good for Europe, it was not good for the approach of the world powers in trying to reach an international agreement … It remains the hope of the Commission that when this question is taken up again, the Community will be able to use its influence and that the next conference will come to a satisfactory conclusion. I think a reasonable interpretation of those words indicates that Sir Christopher Soames, at any rate, took the view that the major obstacle to getting the International Sugar Agreement renewed was the absence of the EEC. I think we shall all remember with considerable sorrow that the representatives of the United Kingdom who were there just sat there, gagged as it were, unable to make any contribution at all to the solution of this problem.

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Order. I think the right hon. Gentleman, who referred to this as a little Bill, is straying beyond the object of the Bill, which is about Section 1 of the International Organisations Act 1968.

Mr. Shore

I fully realise that one must not stray too far into these matters, Mr. Deputy Speaker. I am, at the same time, confronted with a Bill which seeks to make quite a radical change. It envisages the termination of the membership of Her Majesty's Government in the International Sugar Organisation, and I think we are right, first, to interrogate the Minister as to why this is so, and, secondly, to interrogate him, as I have been doing, about the kind of international sugar organisation to which Britain will no longer adhere at the end of this year, and how it differs from the International Sugar Organisation which we have known so far.

Mr. Anthony Royle

If the right hon. Gentleman will excuse me, I think I am right in saying that the Bill relates to diplomatic immunity—and that a gap may occur. It does not cover in any way the longter-term arrangements of the International Sugar Agreement.

Mr. Shore

What we are concerned about—and I am not pursuing this much further, Mr. Deputy Speaker, as I am coming towards the end of my remarks—is to question the Minister a little more on how long the gap which he is expecting will be, and what factors in the situation, in his view, have to be resolved before the gap can be closed. That is why I asked what were the major reasons why the International Sugar Agreement had not been renewed last October.

If it is due mainly, as Commissioner Soames plainly thought it was, to disagreement among the Nine, we should like from the Minister a reasonable assurance that every effort will be made in future to reach agreement, and to reach agreement on membership of the ISA by the European Economic Community, as a major net importer.

Finally, may we have from the Minister this assurance? If he is unable to get the EEC to adhere to a new international sugar agreement, will he then have no hesitation in himself recommending to his right hon. Friend the Secretary of State that he come to the House and put to us that the United Kingdom should itself adhere to the new agreement as a full member of it?

10.15 p.m.

Mr. Frank Judd (Portsmouth, West)

My observations on this little Bill, as it has been called, will be brief.

For once, if he will forgive me saying so, my right hon. Friend the Member for Stepney (Mr. Shore) has been unduly lenient with the Government in what he had to say about the significance of the Bill. I believe that what the House is asked to do tonight reaches the ultimate in the Government's cynicism towards our wider responsibilities in the third world and towards the wider economy of the world as a whole, for which they like to express so much commitment in terms of their membership of the EEC.

I say that because, at the very time when we are asked to support a Bill which envisages the continuation of the International Sugar Organisation and its privileges within London, the Government know full well that within the European Economic Community a struggle is taking place between those who advocate that we should adopt an outward-looking policy on sugar and towards the needs of the developing world and one of the most ruthlessly powerful sugar beet lobbies one has ever seen within the Community which takes the view that the first responsibility of the Community is to sugar producers in Europe.

The House is asked to say that we are prepared to see this organisation stay on in London and, as it were, we wish it well for the future, before we know with any certainty that we shall be able to fulfil our obligations as we have always stated them towards the wider world community. This is a most unhappy situation for the House.

Although we are asked to rush this piece of legislation through in as uncon-troversial a fashion as possible, we see in the Bill the very contradictions which some of us have spelled out in the whole thesis of membership of the EEC. On the one hand, we are told that we are entering Europe to enable us to make a more important contribution to the wider world. On the other, we put in caveats right, left and centre and say that if, because of the nature of politics operating within the Community, we are unable to do that, we must find gentlemanly ways of going forward without causing too much disruption on the surface if it can possibly be avoided.

I almost wish that it were possible to divide the House tonight to show our contempt for the Government's double-dealing as manifested in this Bill.

10.18 p.m.

Mr. Nigel Spearing (Acton)

My right hon. Friend the Member for Stepney (Mr. Shore) described this as a sad little Bill. It is sad because, as my hon. Friend the Member for Portsmouth, West (Mr. Judd) said, in presenting it to the House the Government are trying to look both ways. This was illustrated by the Minister's opening remarks. He used such words as "in the event of the United Kingdom ceasing to be a member", and he constantly referred to matters of uncertainty.

But at no stage did the Minister question the need for an international sugar agreement. How could he? We know that, without such an agreement, the free market for sugar varies by, I believe, a factor of nine. The fact that the futures market is in London, and the need, which the Minister stressed, for the organisation still to be based in London and still to be given the facilities of the previous Act shows just how much the Government realise the importance of this organisation in the world market for sugar.

The Minister did not give any indication whether he thought the Bill would need to remain on the statute book for very long in the event of Britain ceasing to be a member of the agreement. I should have thought the answer was that it would be there for a short period. That answer can be derived from the summit communiqué published in HANSARD in October last year where it said the EEC should involve itself in —the promotion in appropriate cases of agreements concerning the primary products of the developing countries with a view to arriving at market stabilisation and an increase in their exports."—[OFFICIAL REPORT, 23rd October 1972; Vol. 843, c. 812.] which is precisely the objective of this organisation. Therefore, I suggest that when the Minister replies he should say that if the legislation is to be used at all it will be for only a short bridging period, because, as I understand it, its objectives are also the objectives of the organisations to which my right hon. Friend the Member for Stepney referred.

My hon. Friend the Member for Portsmouth, West, referred to the question of quantities in Europe. I understand that in 1968 the EEC applied to become a member of the organisation. However, it was offered an export allocation of about 300,000 tons a year, which I understand was not regarded as sufficient. Perhaps this is understandable as the EEC has guaranteed prices of 134 per cent. of what I understand to be its requirement. Therefore, it seems that the Government, in having to introduce the Bill, are saying, on the one hand, that this is a friendly organisation which fully conforms with the EEC objectives but that, on the other hand, there has been a hitch in the negotiations. Agra Europe in its October bulletin summarised the matter in a headline saying Sugar : No international agreement likely until the EEC finalises its internal policy. There we have a reasonably objective assessment of why the Minister is having to introduce the Bill. The whole reason for the Bill is the paradox, which came as no surprise to some of us in view of the nature of the organisation.

I would, therefore, associate myself with all the remarks of my hon. Friend the Member for Portsmouth, West, in saying that not only are we not surprised that the Government are having to introduce the Bill, but some of us think it would have been necessary in spite of all the protestations of the Government at an earlier stage.

10.23 p.m.

Mr. Douglas Jay (Battersea, North)

Before the Minister asks the House to pass the Bill he should answer two simple factual questions. First, is it possible, or is it not, for the United Kingdom, while a member of the EEC, to remain in its own right a member of the International Sugar Organisation? Secondly, are the British Government, if they now have a voice and a view on the matter, in favour of either this country or the EEC being a member of the International Sugar Organisation?

10.24 p.m.

Mr. Eric Deakins (Walthamstow, West)

This is a ridiculous little Bill. It may be legally necessary but, like my right hon. and hon. Friends, I very much regret the circumstances in which the Minister has had to come to the House with it.

Will the Minister answer one factual question? Is there any other international organisation with its headquarters in London of which Britain is not a member? What a ridiculous position Britain is getting into when we can have the headquarters of one of the great international trading organisations of the world in our capital city and yet are denied the right by virtue of Common Market membership to be a member of that international organisation. That is the crux of the debate. It throws into a prominent light the objections which many of us raised during the Common Market debates last year.

I sincerely hope that it will not be necessary to put the Bill into formal operation, and that by the end of the year we shall have reached a decision that we can be members in the enlarged EEC of a new international sugar agreement and, therefore, return to membership of the ISO.

10.25 p.m.

Mr. Anthony Royle

With the leave of the House, I should like to reply to the debate. I am grateful to hon. Members for sparing the time to be in the House so late at night on such an important little Bill. I am also grateful for the questions I have been asked. I shall try to keep within the rules of order in replying, although it will be difficult. I do not possess the skill to do it as well as the right hon. Member for Stepney (Mr. Shore) does, but I shall do my best to answer all the questions.

The right hon. Members for Stepney and Battersea, North (Mr. Jay) both asked an important question : why cannot the United Kingdom join the interim agreement, regardless of what the rest of the Community does? They know that now that we are members of the Community we must as far as possible move in step with our Community partners, particularly in the case of sugar, a commodity covered by a common organisation of the market. The Community as a whole should participate in the interim agreement, and we hope that in due course it will do so.

The question of how long it will be before we take part in the interim agreement has been raised. As I said in opening, the EEC has yet to determine its attitude. We hope that it will reach a decision very soon. There is a problem of timing. Although the Commission has recommended that the Community should join, it is not certain that it will reach a final decision in the very near future.

Mr. Jay

I think that the Minister says that it must be the Community rather than the United Kingdom which is a member, if either of them is. Does he mean that it is legally impossible under the Treaty of Accession for the United Kingdom separately to be a member of the International Sugar Organisation, or just that in the Government's opinion that would be politically undesirable?

Mr. Royle

I thought I had made my view plain. I was saying not that it was legally impossible but that it would be difficult to accept that as a member of the Community we should not move in step with our Community partners in such an arrangement.

Mr. Neil Marten (Banbury)

This is the key to many of the questions raised tonight. My hon. Friend said that we must move in line with the EEC as far as possible. Does he really mean that? If he does, it is quite possible that we need not move in line with it on this matter and could become members of the ISA without the EEC. Can my hon. Friend clear that up?

Mr. Royle

My hon. Friend knows perfectly well what I mean. We can all do all sorts of things in life, but we have become members of the EEC, and it has been made plain—it was made plain by my right hon. Friend the Minister for Agriculture, Fisheries and Food in the debate in October—that on such an issue we would wish to move with other members of the Community. As far as possible we wish to move in step with them.

Mr. Shore

The hon. Gentleman made a welcome and important statement, at least about the legalities of the matter. The common sense of keeping in step is one thing. If the Community moves all together in a positive direction, I can understand the hon. Gentleman's strategy, but we are now dealing with a situation in which its members have not moved. We must envisage the serious possibility that the Community will not move for a considerable time. In that case, what does the Minister propose to do?

Mr. Royle

I think the right hon. Gentleman should listen to the remainder of my remarks, because I am coming to the point that he has made that, in some way, the renegotiation conference failed because of the attitude of the Community. There is no question of that. The failure of the conference can in no way be attributed to the attitude of the Community. [Interruption.] It is all very well for Labour Members to "Tut, tut", but what I have told the House is a correct assessment of the situation. The failure was due entirely to the disagreement between the principal exporting and importing countries over price levels and other related issues, and that, too, was made clear to the House in October by my right hon. Friend.

One other important question that was asked was about the implications of all this for the developing world. It is very difficult for me to answer that. It is a question that I should like to answer if I could. But it is fair to say that the Bill which I have laid before the House in no way affects the assurances which the Government gave to the developing Commonwealth sugar-producing members of the Commonwealth Sugar Agreement at meetings in Lancaster House in June 1971, which I attended, and again in March 1973, at which meeting I was not present, about the access of their sugar into the enlarged Community after the CS A expires at the end of 1974. The Government continue to stand firmly by these assurances, and the House will recall that we have assured the Governments concerned that the Community's undertakings on sugar represent a firm assurance of a secure and continuing market in the enlarged Community on fan-terms for the quantities of sugar covered by the CSA in respect of all its existing developing member countries.

Mr. Judd rose—

Mr. Royle

I cannot go wider than that. I hope that the hon. Gentleman will forgive me, but if I go beyond what I have said I shall be in breach of order, and I should not like to incur the wrath of the Chair.

The hon. Member for Walthamstow, West (Mr. Deakins) raised a point about members of international organisations in London. I am advised that there is no other organisation of which we are not a member for which we have made an order under the 1968 Act.

Mr. Jay

Before the hon. Gentleman finally sits down, may I ask him to answer my question? Are the British Government in favour of the United Kingdom or the EEC being a member of the International Sugar Organisation? Surely we should know that?

Mr. Royle

The right hon. Gentleman heard my remarks. I went as wide as I could. I have stretched points of order and the patience of the Chair in doing so.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Jopling.]

Bill immediately considered in Committee ; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

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