HC Deb 05 December 1973 vol 865 cc1277-89

4.7 p.m.

The Chancellor of the Duchy of Lancaster (Mr. John Davies)

With your permission, Mr. Speaker, and that of the House, I wish to make a statement about matters considered in the Council of the European Communities since I last reported to the House on 24th October.

There have been six meetings—the Foreign Ministers met twice, the Finance Ministers twice, and the Ministers of Agriculture and Transport once each.

My right hon. Friend the Minister of Agriculture has already reported to the House on the meeting of Agriculture Ministers on 19th and 20th November.

At the meeting of Transport Ministers on 22nd November there was a preliminary exchange of views on the Commission's recent document on the development of the common transport policy, which was the main item on the agenda.

For the rest, agreement was reached on the substance of a measure of liberalisation in internatinal road haulage, on a small change in consultation procedures, and on the need for uniform enforcement of the rules restricting lorry drivers' hours.

Lorry weights and dimensions and the increase in the new member countries' share of the Community quota for road haulage were further discussed without conclusions being reached.

The Foreign Ministers met on 5th and 6th November and discussed a wide range of subjects affecting the Community's relations with almost all other parts of the world. These subjects were further discussed at the Foreign Ministers meeting on 3rd and 4th December.

Ministers have now agreed on the content of trade agreements to be concluded with Brazil and with India.

The Council made progress on agreeing improvements for 1974 on the generalised scheme of preferences which it offers to imports from developing countries and on its offer of tariff concessions to third countries under the GATT as a consequence of the enlargement of the Community.

Further discussion took place on the mandate for the Commission to negotiate agreements with certain Mediterranean countries. In the expectation that such agreements are unlikely to be concluded by the year end, a satisfactory understanding was reached on the handling of interim arrangements.

There was a detailed discussion of the main aspects of the Regional Development Fund to be set up by 1st January 1974 as provided for in last year's Summit meeting in Paris. This resulted in a clarification of the position of the various member States which should help in finalising the arrangements to be concluded by the year end.

At their meeting on 9th November the Finance Ministers discussed the progress of the Community's anti-inflation programme and the move to a second stage of economic and monetary union.

On Monday and Tuesday of this week the Finance Ministers agreed a resolution on short-term action against inflation. They also made useful progress in further consideration of economic and monetary union and agreed to resume the discussion on 17th December.

Opportunity was taken of the meetings yesterday and the day before to have an extensive exchange of views on the Community's current energy problems.

It was recognised that the united approach to a political solution in the Middle East still constituted the primary field for Community action.

It was also agreed that the consultative arrangements instituted at meetings in November should be maintained.

Mr. Peter Shore

After that pathetic catalogue of non-agreement, will the right hon. Gentleman agree that it adds up not exactly to the kind of astonishing progress that he told us about last week, but indeed, that it is evidence that the Community has virtually ground to a stop?

On the first of many major matters about which we need to ask him, I refer to the question of oil supplies in the EEC. The right hon. Gentleman will have seen a statement by the managing director of Royal Dutch Shell, Mr. Wagner, that supplies are being allocated between Community countries regardless of the particular views of the individual companies involved. What the House wishes to know is whether the right hon. Gentleman knows about these arrangements and is simply accepting them; whether he approves of the action of the Royal Dutch Shell Company in allocating supplies and behaving like a good European company, or whether he disapproves of that action and thinks that the company should be stopped and rebuked. [HON. MEMBERS: "What is your view?"] My view is that the consumer nations of the West should get together as consumer nations—

Mr. Speaker

Order. This is not the time for the right hon. Gentleman to give his views. He should be ascertaining the Minister's views.

Mr. Shore

Does the Minister at any rate think that it is virtually irrelevant to what short-term measures the vulnerable Community of nine decided to take together in dealing with this strong and immediate threat?

My next question concerns regional policy—[Interruption.] The Minister dealt with regional policy and it is a matter of some importance to hon. Members on both sides. Can the Chancellor of the Duchy confirm that the Government proposed that there should be a regional fund, larger than that about which we heard before, of about 3,000 million units of account? If that is so, will he say what reactions came from the other eight member countries of the EEC?

Can he say whether it has now been decided by others that the agreemeent on the regional development fund should be linked with simultaneous agreement on the imposition of rules over State regional aids in the so-called peripheral areas? Is the regional policy free from the other agreement that it would come into effect only if and when the second stage of economic and monetary union was agreed?

On economic and monetary union—[Interruption.] Mr. Speaker, I have some sympathy for the House, but if I may make this observation to you, we have heard a statement, seven pages long, covering not only matters of fuel policy, not only regional policy, not only the second stage of economic and monetary union and the pooling of currency reserves and so on, but, in addition, matters of common transport policies and the whole future relations of the Third World with the general preference scheme of this country.

Mr. Speaker

Order. My only comment would be my fear lest the right hon. Gentleman should take up so much time that he may prevent some of his hon. Friends from being heard.

Mr. Shore

I am bound in duty to make some comment on these matters and particularly before the Government come forward with, it is hoped, more sensible proposals so that this House can discuss European affairs in a more orderly and considered way.

My last question—it will be the last because of the sentiments expressed, Mr. Speaker—is whether the right hon. Gentleman will now undertake, since one cannot even ask him sufficient questions on his long statement, since so many matters are coming up for decision by 1st January and since those decisions will not be able to be altered by the House, to come before the House on all those separate matters with precise proposals to get our comments, advice and approval before he signs on the dotted line in Brussels?

Mr. Davies

The whole House will be grateful to the right hon. Member for finally having ground to a standstill.

Hon. Members

Disgraceful.

Mr. Speaker

Order. One thing which does perplex me about the House sometimes is that those who are not very backward in making criticisms of other people seem to resent similar criticism of themselves.

Mr. Davies

The right hon. Gentleman asked me in the first place whether it was the case that there was a diversion of supplies by the major oil companies to European markets. The major oil companies, in my understanding, are obliged to—and do—strictly observe the injunction given to them by the Arab States about oil destinations. There is no question of the diversion to which the right hon. Gentleman referred.

The right hon. Gentleman asked me about my attitude to the international companies, having regard to remarks made by Mr. Wagner, of the Royal Dutch Shell Group of Companies. I do not know what the attitude of those companies may be. It is not my business. But I imagine that he would agree with me that most international companies would regard their primary responsibility as being to respect their contracts. I am sure that that is what the companies are doing. They would naturally be obliged to comply with instructions given them, which were legally binding upon them, so that they would have to do that, but in other terms they would certainly comply with their contracts. I hope that both sides of the House would regard that as being the normal and moral attitude of British business.

I was asked about regional policy. I proposed that it would be right for the regional development fund, which is proposed to be set up on 1st January 1974, to provide for the sum of 3,000 million units of account over a three-year period. That proposal did not receive instant agreement in the Council of Ministers. However, there was a considerable body of support for my proposals, as there was a certain body of antagonism to them. But these matters remain for further discussion and negotiation. It is impossible for me now to reply to the right hon. Gentleman's question about the relationship of the setting up of the regional development fund with that of the controlling of national aids. The matter is still under discussion and, therefore, I cannot tell the right hon. Gentleman of any such decision.

As for setting up the regional development fund and its relationship to the second stage of economic and monetary union, it is confidently believed that both of these recommendations of last year's Summit meeting in Paris will be brought to effect by 1st January 1974.

When the right hon. Gentleman makes reproaches on the subject of how these matters are handled in this House, my mind goes back to the time when the Select Committee, on which I believe the right hon. Gentleman served with distinc- tion, was not able for a long time to get down to its business through the actions of the Opposition. It has not been the case that the Government have been dilatory in handling these matters. By and large, the right hon. Gentleman's general strictures, which we have grown accustomed to hearing and have at times become rather tired of hearing, wear very thin.

Mr. Peter Rees

Since my right hon. Friend told the House that no conclusion has been reached on certain transport matters, could he reassure us that the Minister for Transport Industries and he are battling robustly on behalf of the interests of my constituents to prevent an increase in the weight of lorries passing through the port of Dover, to which my constituents are implacably opposed?

Mr. Davies

My right hon. Friend, who is sitting beside me, is of course pursuing the very lines of policy about which he has formerly spoken to the House and from which, I am certain, he will not easily be distracted.

Mr. Russell Johnston

In the discussion of regional policy, were the Government in favour of the Italian and Irish suggestion of special provision for particular priority areas within the Commission's proposals?

Mr. Davies

It is true that both the Italian and Irish representatives in the Council of Ministers drew attention to the need, as they saw it, for some effort to be made in respect of areas which have suffered a particular intensity of regional decline or disarray. While, again, no decision was taken on this matter, a good deal of sympathy was expressed for these views within the Council, and, within the framework of realistic possibilities, I gather that the Council would wish to find some way of meeting these requirements.

Mr. Marten

I am sure that all hon. Members who take these matters seriously must deplore, in the kindest way, the fact that there is only one statement covering six ministerial meetings. I should like to register my strong disapproval of that. Would my right hon. Friend give an assurance that this will not be a precedent for the future presentation of reports of Council of Ministers' meetings? It has been reported in the Press that the economic and monetary union project has now been postponed until July. I did not quite understand what my right hon. Friend said about that. In the anti-inflation programme, what is new for this country, and to what extent shall we agree to it, or go ahead with it? Is it mandatory or not?

Mr. Davies

I am grateful to my hon. Friend for his kindest of reproaches. The fact is that if I come to the House more regularly than I do now, there is the kind of reception which I received from the right hon. Member for Stepney (Mr. Shore)—[Interruption.] I am told that this is a pathetic statement—

Mr. English

On a point of order. Have you, Mr. Speaker, ever before heard a Minister protest that he should not come to the House more frequently because of the reception he gets?

Mr. Speaker

It is certainly not a point of order.

Mr. Davies

It is clear that there is a real problem. I am anxious to ensure my regular attendance, and I want to ensure that the House has an opportunity to question me on these matters. On the other hand, it would take up a great deal of time of the House if I were to comply with the kind of suggestions that the right hon. Gentleman makes—

Mr. English

Is it important?

Mr. Davies

Am I to infer that the hon. Member thinks that it is unimportant? In that case, why is he raising the matter?

My hon. Friend the Member for Banbury (Mr. Marten) asked me about subjects under the heading of anti-inflation, which were dealt with by the Council of Finance Ministers. There was nothing in the various matters covered by that meeting which broke new ground in terms of the line of action that this Government have been taking, but it was a useful review among those Ministers to see the ways in which individual member countries were handling the problems and to try to get some concerted action in this field. He also asked me about economic and monetary union and wondered whether the introduction of the second phase was likely to be delayed to 1st July. No, that is not my understanding; the date will be 1st January, I understand.

Mr. Joel Barnett

Does the right hon. Gentleman understand that one does not have to be an anti-Marketeer to believe that it is a nonsense to come to the House with a statement covering so many subjects? Would he accept that we are likely to get the worst of all possible worlds if we pretend that we can get an economic and monetary union as quickly as he is suggesting until individual nations stop making national interests their paramount interest?

Mr. Davies

I am not sure that I fully follow the hon. Member, in the sense that he says that I am setting an earlier date for the introduction of economic and monetary union. That was not my intention. I simply referred to the progress being made, and I believe that some progress is being made. I do not take his point at all.

Mr. Rost

Referring to the discussions on the energy crisis, was the question of co-ordinating a pricing policy discussed? Is my right hon. Friend aware that there is a strong suspicion that oil supplies are being diverted from this country to one or two of our European partners because they are prepared to pay a higher price? If we are to prevent a free-for-all and get some harmonisation, should not this matter be looked into?

Mr. Davies

All these aspects of the problems of energy supply, particularly oil supply, to the Community countries were raised. As I said in my statement, it is the conclusion of that meeting that we should continue the relatively close consultative process which we already have, which covers this and other items.

Mr. Frederick Lee

Is the right hon. Gentleman aware that among redundant steel workers there is still considerable apprehension, especially among those at the Irlam works, where redundancy came early, as to what they are entitled to expect under the EEC arrangements? Could he issue any statement which would help to elucidate this problem?

Mr. Davies

These matters are of course carefully detailed. If there are members of the industry who are in any doubt in this matter, if they would consult either their own managements or their unions, I think they would be well informed of the provisions made by the Community for help in this connection.

Mr. Bruce-Gardyne

My right hon. Friend has reminded the House that the Finance Ministers have twice identified the curbing of inflation as the Community's first priority. In what way will a large regional fund such as he has suggested, or any regional fund, contribute to the achievement of this objective?

Mr. Davies

It would contribute in this way, I think—that one of the features of regional imbalance is, of course, to procure a degree of over-heating in some areas which is the counterpart of a degree of deflation and inadequate industrial activity in others. If the regional fund could bring about what it is intended that it should bring about—a greater parity of prosperity within the whole Community—that would be a substantial contribution to the improvement of inflationary tendencies.

Mr. Sillars

Is the right hon. Gentleman convinced that a regional fund of 3,000 million units of account over three years is adequate to the task of creating a better balance in a Community of Nine? Is he not aware that many people—pro-Market and anti-Market—regard that sum as a derisory funding of an adequate regional fund?

Mr. Davies

I would ask the hon. Gentleman to remember that this fund, like the whole policy that surrounds it, is a new venture for the Community. It is very important that this new venture should be of a growing character. That is the most important thing, not only that it should be substantial but also that it should be capable of growth and should be seen to be growing. I am sure that in the end this is the right way of introducing it—at a level which by all means must be regarded as substantial but which none the less has the capacity for growth and continued development.

Mr. Adam Butler

Referring to transport, can my right hon. Friend say more about the question of general licence quotas for road hauliers? Would he not agree that the present United Kingdom allocation is grossly unfair and restrict- tive? Will he ensure that in the coming year we get our fair share of allocations?

Mr. Davies

Yes, I agree that we all think that the quota which we have hitherto managed to procure is quite inadequate. My right hon. Friend the Minister for Transport Industries, who is here, and I will certainly be acting as hard as we can to try to secure an improvement.

Mr. Deakins

Can the right hon. Gentleman assure the House that the Asian Commonwealth countries will be in no worse a trading position with the enlarged Community on 1st January 1974 than they are at present?

Mr. Davies

I should like to be able to give an entirely unqualified answer, but I obviously cannot, and for very sensible reasons—that, although agreement has now been concluded, for instance, with India, there is still an outstanding arrangement to be concluded with Bangladesh, which I believe will be satisfactory from their point of view.

It is also true that, although, to a large degree, improvements in the Community arrangements under the generalised preference scheme have been finalised, there are still elements to be completed. If that were done, I could unqualifiably say that the arrangements in relation to the Community as a whole for the countries in Southern Asia would not be subject to criticism and would not be anything but an improvement in total on the arrangements which they currently have.

Mr. Bitten

Can my right hon. Friend confirm that it was concluded by Her Majesty's Government that British national interests would be served by a Community regional fund 20 per cent. to 30 per cent. higher than that recommended by Commissioner Thomson? Further, can my right hon. Friend say which countries were most evident in the Council of Ministers in opposing the view that he put forward?

Mr. Davies

I do not think that it would be proper for me to give an account of the attitude of the representatives of individual countries. My reply to my hon. Friend's first question is that I sincerely believe that a fund of the size that I have recommended, coupled with other arrangements that will need to be defined in terms of the apportionment of the fund, will prove to be to the advantage of this country.

Mr. Judd

In view of the far-reaching implications of the current discussions in Brussels about a relationship between the Community and the Third World, may I ask the right hon. Gentleman to consult his right hon. Friend the Leader of the House and ensure that there is an opportunity for the House to debate all these aspects of policy in some depth—which it has not done so far—before any irrevocable decisions are reached?

Mr. Davies

I am aware of the hon. Gentleman's motion on this subject. All I can say is that my right hon. Friend is listening to the discussion. These are matters of great importance. I agree with the hon. Gentleman about that. It is right to say that the House has received full information about them. The House has been told how things are proceeding. The matter of time for a debate is for my right hon. Friend and not for me.

Sir Harmar Nicholls

Whether the reaction to the omnibus nature of my right hon. Friend's statement is real or stimulated, ought not the Leader of the House to consider coming to some arrangement by which proper priority can be given to the various subjects that have to be reported upon? I hold views different from those of my right hon. Friend about general policy connected with the Treaty of Rome, but I feel that now that we are in the Community it should be discussed sensibly. The sourness of the exchanges every time we have a statement can only detract from that and is not in the best interests of the eventual outcome or of the House.

Mr. Davies

I applaud my hon. Friend's fair and reasonable statement. It will, I hope, prove to be an improvement to our general arrangements when a response is made by the Government to the Select Committee's proposals, and I know that my right hon. Friend intends to afford time for a debate on the matter before Christmas.

Mr. Lawson

Is the right hon. Gentleman aware that, together with a small group of my hon. Friends from this side of the House, I recently visited Brussels and was very much impressed with the obvious intelligence and dedication of the British team there, both the civil servants and those employed by the Commission? Almost universally we found the team dedicated to the work of the Community but, equally, we found continuing doubt and disappointment that the building up of the parliamentary side of the European institutions had lagged so far behind. Is the right hon. Gentleman prepared to do all that he can both to build up what exists there and to persuade some of my right hon. and hon. Friends that they, too, should participate in these institutions?

Mr. Davies

I think that the hon. Gentleman is right, and I am grateful to him for saying what he said about the officials in Brussels. They have an extremely onerous task to perform, and they discharge their duties with admirable competence.

With regard to the parliamentary aspects of the problem, I can tell the hon. Gentleman that certain measures are now being considered for improving the position and strengthening the powers of the European Parliament, and I favour the extension of the improvements as fast and as far as possible.

Mr. Shore

Will the right hon. Gentleman consider carefully the suggestion that has been made about the frequency and orderliness of his reports back to the House? If we sound slightly angry at times during the exchanges, very often it is due to, or at any rate is helped by, the frustration that we feel at receiving such enormously lengthy statements and not being able to get at them in the way that we feel we have a duty to do. I hope that the right hon. Gentleman will give that further consideration.

Finally, will the right hon. Gentleman give us a firm promise that, as far as it lies within his power, because of the timetable to which we are working, and because so many of these matters have to be resolved and come into effect by 1st January 1974, he will do all that he can to ensure that we get proper time to consider and probe these matters?

Mr. Davies

I think that the situation will be helped by any steps which it is decided should be taken as a result of the Select Committee's report, and I shall welcome the changes that will take place. The right hon. Gentleman referred to the length of my statement running into seven pages. Perhaps I may tell him that they are fairly short pages consisting of rather large type. It was not a very long statement.

Several Hon. Members rose—

Mr. Speaker

If I may make a comment, I wish that this statement had been made on a day when there was not another statement to the House. We have been going for one hour and five minutes since the end of Question Time. There are important matters to be debated, and I cannot allow any more time of the House to be taken up by questions on the statement.

Dr. Dickson Mabon

On a point of order, Mr. Speaker. I recognise your difficulty, but between now and 14th December there is to be a series of meetings, all of which in themselves merit statements to the House. I have every sympathy with both Front Benches, but I hope that you, as the protector of backbench Members will impress upon the usual channels that the situation that has arisen today should not be allowed to recur.

Mr. Speaker

I have expressed my view.