Foreign Ministers

HC Deb 25 June 1975 vol 894 cc440-2

32. Mr. Blaker

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about his latest meeting with other EEC Foreign Ministers.

Mr. James Callaghan

At the meeting of the Council of Ministers yesterday I took the opportunity to assure them that following the referendum the United Kingdom would play a full and constructive part in Community policies and activities. In the course of a long agenda we discussed the Community's relations with Canada, Egypt and Portugal; we held an Association Council with Cyprus; we took note of Greece's application to join the Community; we considered the next steps on raw materials and commodities; and among various trade items, I am glad to say, we reached a satisfactory settlement on the question of beef exports to the Community from Botswana.

Mr. Blaker

If the country continues on its present mad economic course, shall we not find it increasingly difficult to exert in the Community the influence we should be capable of exerting? If we can bring inflation under control, however—as other member countries of the Community appear to be doing—does the right hon. Gentleman agree that we shall be able to play a major rôle in influencing the policies of the Community, both internal and external?

Mr. Callaghan

I do not necessarily accept the hypothesis with which the hon. Gentleman began his supplementary question, but every one of us on the Government side of the House remembers that on a very early page in the Labour Party manifesto we said that our first and most important task was to overcome inflation, and I believe that the steps now being taken will achieve that end. [HON. MEMBERS: "What are they?"] Those are questions that should be addressed to other Ministers. I have little doubt, having been at least an observer of some of the discussions, that there is more prospect of our overcoming inflation with—[An HON. MEMBER: "Careful."] I shall be very careful—the consent and assent of the trade unions and the people of this country than by any kind of statutory policies or political coalitions.

Mr. Hooson

Is it correct that the right hon. Gentleman finds himself greatly inhibited in initiating any foreign policy moves because of the present rate of inflation? Does he find that rate an in- tolerable hindrance to taking major steps in foreign policy?

Mr. Callaghan

I am being tempted on to Tom Tiddler's ground. The answer is a mixed one. Britain's view is taken very seriously by our colleagues in the Community and other nations in the world. At the same time, I cannot depart from what I said on the 8 o'clock news—I do not know whether anybody listened to it—[Interruption.] I am glad that I had an audience. I said that of course the impact of inflation weakened our ability to take initiatives in foreign affairs. It weakens it in many ways. It weakens the respect with which we are listened to if our affairs do not seem to be under proper management, and it limits the assistance we can give when there are a number of desirable ends at stake.

For example, we must now consider the question of aid to succour democracy in Portugal. I should like Britain to be in a position in which we could ensure that Portugal followed a democratic path by assistance from outside, if such a thing is possible. But how can I look my right hon. Friend the Chancellor of the Exchequer in the eye and ask him for large sums at present? I give that as an example. There are many other illustrations of that kind.

Mr. Jay

Can my right hon. Friend say what was the settlement on beef exports from Botswana that he mentioned?

Mr. Callaghan

Yes, Sir. I am grateful to my right hon. Friend for giving me the opportunity of boasting. The Batswana, who are so heavily dependent on cattle, instead of being required to pay a levy of 100 per cent. on their imports into the Community, as under the Community rules, will now pay a levy of 10 per cent. That is the minimum that anybody could be expected to pay. I am glad to say that that levy will make very little difference. They will also charge an export tax which they will be able to use in any way they like, in their own country, to reimburse their people. The Botswana delegation met me at 1 a.m. today in Luxembourg, and thanked me profusely. That only goes to show how much the fears that some people expressed before the referendum have proved to be incorrect.