(SUMMIT CONFERENCE) EUROPEAN COMMUNITY (Hansard, 18 December 1973)

§ The Prime Minister (Mr. Edward Heath)
With your permission, Mr. Speaker, and that of the House, I should now like to make a statement.
The Heads of State or Government of the European Community met in Copenhagen on 14th and 15th December. The Middle East crisis and its serious consequences for the industrialised world were in the forefront and the meeting concentrated on these issues. A statement was issued after the meeting and will appear in the OFFICIAL REPORT.
On the Middle East the Nine reaffirmed their declaration of 6th November. They are ready to assist in the search for peace and in the guaranteeing of a settlement, on the basis of the full implementation of Security Council Resolution 242 in all its parts, taking into account the legitimate rights of the Palestinians. Four Arab Foreign Ministers visited Copenhagen at the time of the meeting and were received by the nine Foreign Ministers. The Danish Prime Minister drew their attention to the adverse effects of the oil cuts for both developed and developing countries.
We also agreed that the Community should take immediate action to review the facts of the energy crisis and to analyse the consequences for production, employment, prices, balance of payments and monetary reserves in all member States. The Commission will present proposals by 31st January 1974 to ensure the orderly functioning of the common market for energy. For the longer term, the Council will adopt a comprehensive Community programme on alternative sources of energy. The conference agreed on the importance of negotiating co-operative arrangements with oil-producing countries and of consultation with oil consumers.
At Copenhagen we were not trying to define in detail the action which will be taken by the Community. But Europe's leaders have laid down guidelines for a common energy policy, with the necessary deadlines. That is the traditional way in which the Community produces a common policy. British interests were 1147 well protected in the decisions which were taken.
It was agreed that the regional fund should be established on 1st January without any link with the passage to the second stage of economic and monetary union. It is now for the Council to take the necessary practical decisions.
We also agreed on the need for the Nine to work out common positions quickly in times of crisis. Foreign Ministers will settle the detailed arrangements at their next meeting in February.
Finally, we agreed to meet more frequently, whenever the international situation so requires, and probably at least once in each six-month presidency.

§ Mr. Shore
I thank the Prime Minister for that statement. May I put to the right hon. Gentleman, first, that it would have been quite wrong for a meeting of so important a character not to have been the subject of a separate statement and questioning in the House, and all the more so because I understand, from the last sentence of the statement, that this is likely to be a pattern now and that we are likely to have six-monthly meetings of a summit character?
On the question of oil, which clearly dominated the whole of the Copenhagen summit, while we welcome short-term measures—our only regret is that there is no reference in the statement to Dr. Kissinger's important proposals—including oil sharing, to counter and resist oil blackmail, is the Prime Minister aware that the reference to a comprehensive Community programme of alternative sources of energy in the medium term and long term is an entirely different matter and that in the view of the Opposition, at any rate, it would be far better for Britain to develop North Sea oil and far better for France to finance Pierrelatte and other projects of that kind?
We note from the statement that the regional fund is to be established by 1st January. What is the Prime Minister's latest estimate of the size of the fund in 1974, and what is to be Britain's share in it?
Lastly, in the light of the quite appalling balance-of-payments problem that Britain now faces, did the Prime Minister take the opportunity of the summit to raise with the other European leaders 1148 there the question of special measures that may have to be taken by the Government and the possibilities of derogations from the very harsh terms of the Treaty of Accession, which we otherwise shall have to bear?

§ The Prime Minister
It would be normal to make a statement after a meeting of Heads of Government, as indeed I do when meeting an individual Head of Government elsewhere. As I was answering Questions and speaking first in the debate today, it was suggested that I should deal with this matter in the debate. But as the right hon. Gentleman asked for a statement, I made it to the House. It is the normal thing to do in the ordinary way.
Regarding energy, right hon. and hon. Members of the Opposition must make up their minds. They say that they want co-ordinated energy arrangements at this particular moment but apparently in the longer term they do not want coordinated arrangements. They clearly cannot have it both ways. What we have done is to set down the arrangements for the Community to create the machinery to deal with both the short term and the long term. Regarding the particular items mentioned by the right hon. Gentleman, nothing that we have done precludes either of the developments of which he has spoken. A comprehensive energy policy in this situation means that the Community should develop all its resources of energy to the utmost extent where that is economically justifiable. That is what we shall now set about doing.
I cannot give the right hon. Gentleman an answer to his question about the regional development fund because that is under discussion today by the Foreign Ministers at the Council of Ministers in Brussels. We must await the outcome of that discussion.
I did not discuss alterations to the Treaty with any of my colleagues.

§ Mr. Hugh Fraser
I am sure that the House will be very grateful to the Prime Minister for his statement, which elucidates what happened at Copenhagen. It seemed to some of us that the OECD had failed to join the Arab League. I hope that the Prime Minister can——

§ Mr. Speaker
Order. We are now dealing with questions on the statement.

§ Mr. Fraser
May I, therefore, ask the Prime Minister, in view of his elucidations, what proposals he has with the OECD for supporting Dr. Kissinger's plan for a world front of the oil consumers to stand up against Arab blackmail?

§ The Prime Minister
First, it would have been quite wrong if the meeting of Heads of Government and Foreign Ministers in Copenhagen had not been prepared to meet the six Arab Foreign Ministers who went to Copenhagen. It was a courtesy to meet them and to hear their point of view. I welcomed Dr. Kissinger's proposal in the House last Thursday, and the Heads of Government decided that the best means of co-operation in all ways is through OECD, at which the North Atlantic countries are present, as well as Japan. It is in the OECD that Dr. Kissinger's proposal can best be discussed and decided upon. Dr. Kissinger's proposal was not put in terms of standing up to blackmail; it was put in terms of allowing Western industrialised countries to develop their resources of power and to find ways whereby the resources which are now becoming available to Arab countries could be used for investment in the Western world.

§ Mr. David Steel
May I press the Prime Minister on the important question of the regional fund? It appeared to outsiders that there was a dragging of feet on this question at Copenhagen. Will the right hon. Gentleman enlarge on that a little?

§ The Prime Minister
There was no dragging of feet by myself, by my right hon. Friend or by the British Government. We believe that a proper regional fund is an essential element of full Community life, just as much as any other aspect, such as economic and monetary development or an energy policy.

§ Mr. Tebbit
On the matter of energy supplies, did my right hon. Friend carry to his colleagues at that meeting the message that this country and both sides of the House are resolute in refusing to submit to blackmail? [HON. MEMBERS: "Hear, hear."] Under that condition—and with that applause from the Opposition—may I ask my right hon. Friend whether he inquired whether anyone over there had any coal to spare?

§ The Prime Minister
It was agreed that energy policy, in its development and allocation, would have to be equitable and take into account the needs of particular countries at particular times. The needs of this country at the moment were fully recognised by my colleagues.

§ Mr. Clinton Davis
Would the right hon. Gentleman say what initiative his Government proposed with regard to an alternative resolution on the Middle East, and would he define how his Government regard the legitimate aspirations of the Palestinians?

§ The Prime Minister
We have put forward no different initiative on the Middle East, because we believe that Resolution No. 242 should be implemented in all its parts. The members of the United Nations, including successive British Governments, have recognised that the interests of the Palestinians, in particular the refugees, have to be taken fully into account, and this must be done at the peace conference.

§ Mr. Awdry
Did the other Heads of Government express any views about the present British trade union position?

§ The Prime Minister
No, Sir. We do not discuss each other's internal arrangements.

§ Mr. Douglas
On a point of order. I do not want to question your judgment of the choice of Members to put questions, Mr. Speaker, but I understood that the Prime Minister was making this statement after refusing at the proper time to answer Question No. Q3 from me.

§ Mr. Speaker
I am obliged to the hon. Gentleman for reminding me of that fact.

§ Mr. Elystan Morgan
Will the Prime Minister confirm that he will demand of the Council of Ministers that the regional fund should be not less than £1,000 million per annum, and that he will not tolerate any possibility of it being reduced to the level of £200 million or £300 million, as has been widely reported in the Press in the past few days? Does he appreciate that a level as low as that would be a mere drop in the ocean of the need of the peripheral areas, which have already been gravely weakened by 1151 the restrictive provisions of the Common Market?

§ The Prime Minister
I cannot accept the last point. The peripheral areas have not in any way been weakened by membership of the European Community. In fact, at present, as the hon. Gentleman agreed with me a little earlier, the regional arrangements are better than they have ever been before and the regions have a higher level of employment than for a very long time. But I have already said that we regard the regional development fund as a major item of Community life, and the amounts have to be negotiated in the Council of Ministers.

§ Mr. Dixon
Was there any sympathetic discussion of the problems of the Japanese economy?

§ The Prime Minister
There was no specific discussion about the Japanese economy as such, but in our discussions of energy and oil problems it was recognised that these matters have to be dealt with in the context of the West as a whole, which means the United States, Canada, Japan and the European Community. The obvious forum in which to do that is the one body to which we all belong at the moment—OECD.

§ Mr. Douglas
Would the Prime Minister concede that the energy problem and the international monetary problem are inextricably linked? What discussion, therefore, did the Heads of State have about ensuring that the developing nations could pay for the energy that they require, particularly from the Arab nations? Second, in relation to the balance sheets of which the energy communiqué speaks, how does he propose to put our resources of indigenous fuels and our labour resources into that balance sheet? What long-term views does he take of our indigenous fuel supply position and the employment position, particularly of the mining industry?

§ The Prime Minister
I agree with the hon. Gentleman that the whole of the oil situation and the world international monetary position are now inextricably bound up because of the very large balances that the oil-producing countries will accumulate immediately and, in particular, during 1974 and thereafter. As for the developing countries, we have made 1152 our position clear to the Arab countries—that they are not only damaging the Western industrialised world by bringing our standard of living to a standstill, or even depressing it, but they are also affecting the developing countries, particularly India, for example. We have put a proposal to them to take that into account in their present arrangements.
What we did as Heads of Government was to ask the Community immediately to set up machinery which will be able to discuss this with the oil-producing countries as well as with the developing countries. The balance sheet is one of information. First and foremost, the Community countries will be dealing with information at this present time on shortages of energy of various types; they will then move on to the longer-term objectives as to what will be possible in the Community.

§ Mr. Speaker
Order. Mr. Robert Carr, statement.

§ Mr. Faulds
On a point of order. Since, quite accidentally, Mr. Speaker, your eye lit on a strange assortment of Zionist apologists and protagonists, and since, on this issue, Britain's interests are paramount, would it not have been fairer, since our oil problems are caused not by Arab intransigence over Arab oil but by Israeli intransigence over occupied Arab territories?

§ Mr. Speaker
Order. That is not a point of order.
Following is the text of the Declaration released to the Press after the European Community Summit in Copenhagen: The Heads of State or Government of the member States of the European Community met in Copenhagen on 14th and 15th December 1973 at the invitation of the Prime Minister of Denmark. The President of the Commission participated actively in their work on Community questions. They agreed as follows:

1. The Nine countries affirm their common will that Europe should speak with one voice in important world affairs. They adopted the Declaration on the European identity, which defines, with the dynamic nature of the Community in mind, the principles which are to underlie their action.

2. They decided to speed up the work required to define the European Union which they had set themselves as their major objective at the Paris Summit. They asked the 1153 Presidency to make the necessary proposals without delay.

3. They decided to meet more frequently. These meetings will be held whenever justified by the circumstances and when it appears necessary to provide a stimulus or to lay down further guidelines for the construction of a united Europe.
It will be for the country providing the President to convene these meetings and to make detailed proposals concerning their preparation and organisation. The Heads of State or Government attach the greatest importance to the institutions of the Community playing their full role and to the necessary decisions being taken there in good time.

4. They also agreed to meet whenever the international situation so required. It was agreed that the Foreign Ministers of the member States should, at their next meeting, decide on the means by which a common position should be worked out quickly in times of crisis. The development of political cooperation will also enable them to make joint assessments of crisis situations, with the aim of foreseeing them and of taking the measures needed to deal with them.

5. They confirmed their support for the policy of international détente which respects the independence and security of each State and the rules laid down in the Charter of the United Nations for the prevention and settlement of conflicts.
They agreed that the growing unity of the Nine would strengthen the West as a whole and will be beneficial for the relationship between Europe and the United States.

6. The Heads of State or Government welcome the convening of a peace conference in Geneva and call on the participants to make every effort to achieve a just and lasting settlement at an early date. The Nine Governments are ready to assist in the search for peace and in the guaranteeing of a settlement.
The Heads of State or Government reaffirmed the united stand of their Governments on the Middle East question embodied in the Declaration issued on 6th November. Recent events have strengthened them in their view that the security of all States in the area, whether it be Israel or her Arab neighbours, can only be based on the full implementation of Security Council Resolution 242 in all its parts taking into account also the legitimate rights of the Palestinians. The Heads of State or Governments are convinced that the requirements of sovereignty and the requirements of security can be met by the conclusion of peace agreements including among other arrangements international guarantees and the establishment of demilitarised zones. They will inform the Secretary-General of the UN thereof.

7. As regards the European Communities, the Heads of State or Government reaffirmed the importance they attach to what the community has already achieved and their will to see it develop. After examining the progress 1154 already made in implementing earlier decisions they agreed:
To invite the Community institutions to take measures to achieve more rapid progress towards the full establishment of economic and monetary union building on the decisions already taken. To seek actively the definition of a common position on reform of the international monetary system, to increase the instruments at the disposal of the European Monetary Co-operation Fund and to strengthen the co-ordination of their action to deal with de-stabilising capital movements, in order to create an area of stability in Europe. The Heads of State and Government agreed that the Regional Development Fund should be established on 1st January 1974. As an expression of their positive attitude to the establishment of the Fund they agreed to recommend to their Foreign Ministers that the Council of the European Communities at its next session shall take the necessary decisions concerning the size and the distribution of the Fund and the criteria for the Fund's operations. To implement a social action programme having as its aims the achievement of full and better employment in the Community, the improvement of living and working conditions in a way which makes possible their harmonisation while the improvement is being maintained, and growing participation by the social partners in the Community's economic and social decisions and by workers in the activities of enterprises. To make the functioning of the Community's institutions more effective by improving co-operation between the Council, the Commission and the Parliament, by a more rapid procedure for the settlement of questions submitted to the Community authorities and by reinforcing its financial control, involving inter alia the establishment of an independent Community audit board and the strengthening of the role of the European Parliament in budgetary matters. That the Foreign Ministers at the next session of the Council of the European Communities find a solution to enable the Faroe Islands to postpone their decision concerning membership of the European Communities until the result of the Conference on the Law of the Sea is known. The Heads of State or Government, mindful of the importance that this attaches to problems arising from international trade in primary products and raw materials, asked the Commission to prepare a detailed study and to put proposals to the Council. The Heads of State or Government called on the Community to develop more actively a common policy on industrial, scientific and technological co-operation in all fields.

8. The Heads of State or Government have considered the question of energy in a separate paper, attached to this Declaration.

9. The Heads of State or Government are convinced that a united Europe will be able to play a role consonate with its history and 1155 its abilities in the service of economic and social progress in the Community, of the growth and industrialisation of developing countries and of peace between all nations.
ANNEX TO THE COMMUNICATION OF THE PRESIDENCY Energy The Heads of State or Government considered that the situation produced by the energy crisis is a threat to the world economy as a whole, affecting not only developed but also developing countries. A prolonged scarcity of energy resources would have grave effects on production, employment and balances of payment within the Community. The Heads of State or Government therefore agreed on the necessity for the Community of taking immediate and effective action along the following lines. The Council should adopt at its session of 17th–18th December 1973, the Community Instruments which will enable the Commission to establish by 15th January 1974, comprehensive energy balance sheets coverng all relevant aspects of the energy situation in the Community. The Commission should on this basis proceed to examine all present or forseeable repercussions of the energy supply situation on production, employment, prices and balances of payments, as well as on the development of monetary reserves. The Heads of State or Government ask the Commission to present by 31st January 1974, proposals on which the Council will be invited to decide as quickly as possible and in principle before 28th February 1974, to ensure the orderly functioning of the common market for energy. In this context the Commission is asked to submit to the Council as quickly as possible for rapid decision proposals aimed at resolving in a concerted manner the problems raised by the developing energy crisis. For the same reasons they asked the Council to adopt provisions to ensure that all member States introduce on a concerted and equitable basis measures to limit energy consumption. With a view to securing the energy supplies of the Community the Council will adopt a comprehensive Community programme on alternative sources of energy. This programme will be designed to promote a diversification of supplies by developing existing resources, accelerating research in new sources of energy and creating new capacities of production notably a European capacity for enrichment of uranium, seeking the concerted harmonious development of existing projects. The Heads of State or Government confirmed the importance of entering into negotiations with oil-producing countries on comprehensive arrangements comprising cooperation on a wide scale for the economic and industrial development of these countries, industrial investments, and stable energy supplies to the member countries at reasonable prices. 1156 They furthermore considered it useful to study with other oil-consuming countries within the framework of the OECD ways of dealing with the common short and long-term energy problems of consumer countries. The Council should establish at its session of 17th–18th December 1973, an energy committee of senior officials which is responsible for implementing the energy policy measures adopted by the Council.