HC Deb 09 March 1977 vol 927 cc1407-19
The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen)

I will, with permission, make a statement on the meeting of the EEC Council of Ministers which took place yesterday, under my chairmanship.

I am glad to report that after a long discussion we were able to reach agreement on the main elements of an opening statement to be made by the presidency on behalf of the Community on the Common Fund negotiating conference which has just opened in Geneva. There was one point which was not completely resolved concerning aspects of commodity financing on which work will continue this week. It will also be necessary to develop and elaborate the Community's position in the course of the Common Fund conference. The Community has committed itself to working constructively for a productive outcome and my right hon. Friend the Secretary of State for Trade made it clear that the United Kingdom would make a positive contribution and would welcome discussion on all aspects of the question.

We discussed the detailed preparation for the next meeting of the European Council in Rome on 25th and 26th March. We discussed also representation at the forthcoming summit conference to be held in London on 7th and 8th May. Differing views were expressed on whether the Community should be represented. No consensus emerged and some member States indicated they would raise the issue at the European Council.

We heard a progress report on negotiations with third countries on fisheries questions. These are on the whole moving ahead satisfactorily, but my hon. Friend underlined the importance which the United Kingdom attaches to a resumption of British fishing off Iceland and it was agreed that the Commission would consult urgently with the Permanent Representatives' Committee on how to take this forward. It was also agreed that work should be pressed ahead on the reform of the Community's internal fisheries regime in the high-level official group which is meeting for the first time today and in the Agriculture Council.

We discussed the adaptation of the 1970 agreement between the Community and Spain to take account of the accession of the United Kingdom and other new members in 1973 and agreed that the Council would return to this issue at its next meeting on 5th April.

The Council agreed that the work in hand on a mandate for negotiation of a second stage agreement with Cyprus should be continued with a view to finalising it at the next Council.

A large measure of agreement was also reached on the Community's handling of the GATT negotiations on the renewal of the Multifibre Arrangement. Work will continue at official level on the outstanding issues in time for discussion in the GATT textiles committee in Geneva.

Mr. John Davies

I thank the right hon. Gentleman for his statement and for keeping up the good habit of making brief statements soon after the Council meetings have taken place. In relation to his observations about the summit meeting and further discussion of the matter at the European Council, is he aware that we hope that he means that the Council, of which he is President, and the Council of Ministers will be exercising their authority to secure representation of the Community at the summit meeting, bearing in mind that particularly the smaller countries in the Community have long looked to Britain to seek to help them in having their view adequately expressed in these international arrangements?

The right hon. Gentleman in his reference to fisheries said that these matters were moving ahead satisfactorily, but do not the Icelandic discussions seem to be bogged down? Can he give some reassurance to the many interests which are concerned about the lack of news of any progress in these negotiations?

The right hon. Gentleman has a particular concern with the problems of Cyprus, so did he make clear to his colleagues how vital it is to the achievement of reconciliation in that island that arrangements between it and the Community should be intensified and made more effective in view of the immense importance of maintaining the island's economy in order to bring about the necessary reconciliation?

On the Multifibre Arrangement, can the right hon. Gentleman assure us that the point is well taken that, against a background of recession in the industry, the automatic quota growth envisaged in the arrangement is unacceptable for the future and that any review of the arrangement must bring about some relationship of quotas to the state of the industry from time to time?

There was no mention of Concorde in the right hon. Gentleman's statement. Did he raise this with his colleagues and point out to them that any adverse decision on Concorde and New York might have the most serious effects for the longterm interests of the European aerospace industry and that, although it might be in the very short-term interests of the United States industry, it could not be in its long-term interests? Did the right hon. Gentleman make these points in view of his imminent departure to Washington?

Dr. Owen

On the summit, the presidency has sought to forge a consensus. I attempted to do that at yesterday's meeting. Our view has always been that we would go along with a consensus, but it did not emerge. It could be put on the agenda—it is open to any member Government to do that—but formal items on the agenda are usually agreed. This subject was discussed, but there was no agreement on it, although some States made clear that it would be discussed at the Rome meeting.

I agree that "bogged down" is a fair description of the Icelandic negotiations. There has been no progress. My hon. Friend made clear to the Commission and the Council that we were extremely concerned about this matter. We have been promised a further report from Commissioner Gundelach. It is extremely important in view of the whole question of cod and any argument on quotas for demersal fish.

There was agreement on Cyprus. This has been discussed in the Political Committee and it is recognised on all sides that whatever view is taken, whether by the Turkish Cypriots or by the Greek Cypriots, it is in the interests of all communities and of Cyprus as a whole that the economy should go forward.

I can confirm that the MFA is one of the issues which are outstanding and on which there is concern among member States. Further work is needed if we are to reach a common Community position by 16th March.

Concorde was not discussed at the Council, but I raised it in bilateral discussions when I visited Paris a week ago.

Mr. Thorpe

Who will take the final decision on whether the Community will be represented at the summit? Will it be the European Council? What view did the Government take? Did they take the view that since there are matters which will affect the Community as a whole, it would be an intolerable setback to the authority of the Community if its President were not present at the summit?

We hope that the Common Fund negotiations in Paris will have a successful outcome. Does the right hon. Gentleman agree that the Government's view should be that stability in raw materials is in the interests as much of consuming countries as of exporting countries and that this is the best way of redistributing wealth between developing and developed countries?

Dr. Owen

The Government's view on the summit is clear. If a consensus had emerged in favour of the representation of the Commission, we would have been in favour of it. Unfortunately that did not emerge. On the question of decision making, it has been a convention that the European Council is not a formal decision-making body. It produces general orientations for the Council of Foreign Ministers, which is the decision-making body. It would have been possible for a decision to be taken by the European Council if, when the matter was discussed, a consensus emerged. However, no consensus emerged and without that there could be no agreement and therefore no decision was taken. Our position as hosts to the summit was that we would invite whatever representation was agreed by the Council of Ministers. As there was no agreement, we cannot invite anyone. It is not within our gift to determine this matter. We are only one of nine States which have to decide on representation.

On the Common Fund meeting in Geneva, the right hon. Gentleman puts a sound argument, but the question is about objectives and the means of achieving them and how, in some circumstances, they could benefit both the developing and the developed world. But in some circumstances it would be extremely expensive and not helpful to some of the poorest countries. We have expressed a readiness to explore all the issues in a constructive spirit, trying to achieve a solution to a difficult problem. But this is an important area.

Mr. Roper

I congratulate my right hon. Friend on having led the Council of Ministers to such a constructive decision on the Common Fund. However, will he say a little more about what is meant by the phrase that he used, that the Government would work constructively for a productive outcome in the negotiations in Geneva? In particular, will he say at what level the further discussions to which he referred will take place and whether it will be necessary to have another meeting of the Council of Ministers before a final Community position is agreed?

Dr. Owen

The further discussions that I have mentioned relate to a small part of the document, but an important part, since they relate to financial arrangements. This will be pursued in the permanent representatives' meeting, I think on Thursday, where I hope it will be possible to get agreement. But there are further meetings relating to preparation for the CIEC conference in Paris, and it will be possible to discuss the whole position on the Common Fund in the negotiations. There will be an evolution of positions. We need to look at the relationship of the Common Fund to some important aspects under discussion in the CIEC—the whole question of debt financing arrangements and other things.

What is important is to make some movement in the whole area of the North-South dialogue. The Common Fund has been isolated as one of the issues, but it has held up progress. We have not been able to get a Community position on the Common Fund, although that was advanced when we were getting very close to getting one yesterday.

Mr. Buchanan-Smith

On the fishery negotiations, will the right hon. Gentleman comment on the negotiations with Russia, and particularly the reports that there have been certain procedural difficulties over getting an agreement? It would be a pity if progress made so far were to be hindered on procedural grounds now.

Secondly, what progress does the right hon. Gentleman now envisage for the working out of the internal regime of the EEC? What discussions is he having with the Eire Government in relation to the rather interesting proposals that they have put forward?

Dr. Owen

Taking the last part of the question first, we have had very close contact with the Irish Government throughout the negotiations, because to a great extent we have a common interest in these aspects. Their position and their proposals are under discussion in the Community at present. Of course, there are strong feelings among some member States that they are discriminatory, but the Irish Government are putting them forward to protect their coastal industry, and their interest in this is very close to ours.

It is true that there are procedural difficulties over the Russian negotiations. We have made considerable progress in dealing with January, February and March. There are quite big issues of recognition and the relationship of the Soviet Union to the Community. I am not unhopeful that we shall make progress. I had a brief meeting myself with Minister Ishkov yesterday in Brussels.

Mr. Watt

How are the negotiations with Norway proceeding? Is the right hon. Gentleman aware that no internal fisheries regime can be worked out until such time as we know what tonnage of fish is to be available in Norwegian waters? On the wider aspects, does he not agree that so long as the common agricultural policy is allowed to take up a disproportionate amount of the Community budget, we shall never be able to get on with worthwhile projects? Does he not agree that the sooner the CAP is disbanded and member nations are allowed to work out their own food and agricultural policies, the better?

Dr. Owen

On the last point, the Government have never made any secret of the fact that they think that there need to be substantial changes in the CAP. We have worked for that with some success over the last few years. We hope to build on that success.

Concerning Norway, there is no doubt that we cannot have an internal regime until we can get some agreement on quotas. There are still arguments on the technical quotas of fish that would be available in our waters. These negotiations are taking time, although they are being conducted in a very friendly spirit. At present there is no difficulty in extending arrangements while we forge agreement with the Norwegian Government. But this is a relationship between the Community and the Norwegian Government.

Mr. Bryan Davies

While welcoming the progress outlined on the Common Fund, may I ask my right hon. Friend whether he could go some way to correct the impression that the British Government intended to lead on these negotiations rather than be in the rear? Would not the situation be improved if a more positive statement were made by the British Government welcoming the concept of the Common Fund?

Dr. Owen

I think that we made a very positive contribution in the debate. Without going into all the positions of the different member States, let me say that the presidency was cast in the rôle of trying to bring together two fairly substantially differing views. We were able to do that. The British Government had no difficulty in going along with what was initially the presidency draft on which we forged this. Therefore, it would be wrong to say that we are in the rear on this. I would not say that we were in the lead, because I think that there are serious issues which involve the future of the poorest countries in the world, and, badly introduced, a Common Fund could be damaging to their interests. We are prepared to look at this serious issue—it is serious—in a spirit of trying to reach a productive agreement.

Mr. Farr

Was there any discussion at the meeting of the situation in Romania? In particular, has the EEC decided to offer support in any way?

Was discussion entered into about the manner in which policing of the 200-mile exclusive fishing zone will be arranged?

Dr. Owen

No discussion took place about Romania, although we discussed some aspects of Yugoslavian policy. We did not discuss the earthquake problem. That is currently a matter for individual member States to respond to. As the House knows, I made an announcement yesterday concerning the British response.

The policing of the 200-mile limit is a national governmental responsibility. We have always held the view that conservation is an issue for the national Governments, and there the Government's policy has been held. There are some member States with small navies and limited resources. We may need to go into some discussion about policing for them. We consider our own 200-mile zone to be the, British Government's responsibility and we intend to carry out that responsibility.

Mr. Skinner

Is my right hon. Friend aware that it is no surprise to many of us on the Labour Benches that the Common Market Ministers will not agree to sending someone to represent the whole Community at the summit? We have always believed that national interests will be served over and above those of the Community, so why spend much-needed taxpayers' money on direct elections to prop up such a phoney alliance?

As for Concorde, why do the Germans, the Belgians, the Italians and all the others not buy it? Who needs enemies with friends like those?

Dr. Owen

I shall not follow my hon. Friend into the labyrinths of the support for Concorde. What is at issue there is its range. It is not an intra-European aeroplane. It is basically an aeroplane for going either, as operated by the French, to Brazil, or across the North Atlantic on fairly major journeys.

Concerning Common Market agreement and taking a national position, if one believes in federalism—which I do not—one tends to believe that there should be no national interest. But it has long been the view of many hon. Members on both sides of the House who believe in the idea of Britain being a member of the Community that it is still possible to have a strong national sense within the European Community. That is certainly my position and I would uphold it. I believe the primacy of the Council of Ministers has rightly been upheld, and that is why I believe that if one holds direct elections, for example, under the Treaty of Rome, for the European Parliament, they will not undermine the primacy of the Council of Ministers, nor, in fact, effectively subtract in any way from the powers of the Council of Ministers.

Mr. Blaker

Has the Council of Ministers recently had any discussions about improving the methods of concerting foreign policy? Will the Foreign Secretary say what his own position is on this matter? Does he attach a high priority to that objective, and is he satisfied with the progress being made?

Dr. Owen

Yes, I am satisfied. I think it could be better. But, as I said in my speech during the foreign affairs debate, the Community has acted as one on over 80 per cent. of the resolutions in the United Nations. That is a significant improvement and is a major yardstick of our achieving, so far as one can, an integrated common view on foreign policy issues.

The political co-operation machinery, which is fairly new, has been working actively. We are currently discussing many issues such as Cyprus, the Middle East and the whole complex of problems in the Mediterranean area with a great deal of identity of view. We shall continue to try to bring about a common position among the nine member States.

Mr. Spearing

My right hon. Friend said that the United Kingdom agrees with the objectives of the Common Fund, namely, more stable prices for producer and consumer nations and fairer prices for the producers. Can he say whether all the members of the EEC agreed with his objective for common funding through international financial means of individual commodity agreements, which will lead to the same results?

Dr. Owen

It would be true to say that as a result of the meeting yesterday all the member States agreed with the objectives of stability of prices. It is not true to say that there is agreement that the only vehicle towards that is a common fund as we see it. Certainly one member State is interested in a widening of the Stabex system and sees that making a contribution. What has emerged is a readiness among all member States to look at the concrete proposals, and to study them commodity by commodity, while at the same time recognising the strong views held on this issue by the developing countries.

Mr. Rifkind

Can the right hon Gentleman indicate whether there was any discussion about protecting European firms from the Arab boycott office? If there was not, will the Secretary of State undertake to raise this matter subsequently?

Dr. Owen

I do not mind looking at this point. It was not discussed at this meeting. It would probably have been discussed initially under the political cooperation machinery and not in the Council. It is one of the issues that cut across political co-operation and involve trade matters for the Council. It may well come up.

Several Hon. Members rose

Mr. Speaker

I shall undertake to call those hon. Members who have already been on their feet. As the House knows, I am jealous of the rights of the House to question the Minister on European matters, but I do not propose to call any other hon. Member who jumps to his feet after this.

Mr. James Johnson

In the light of the discussions with other EEC Ministers, both public and private and formal and informal, may I ask my right hon. Friend a constituency question? Can he give any indication about the likelihood of a settlement with Iceland over our fishing dispute? As my right hon. Friend knows, this is vital to Humberside.

Dr. Owen

I well recognise that this is vital. That was one of the reasons why the United Kingdom delegate devoted most of his speech on fishing to the whole question of Iceland and its effect. The situation is that the Icelandic Government told the Commission and the Community, through Commissioner Gunderlach, that they had not refused to negotiate some form of arrangement but wished to have further time to consider the matter. It was hoped that a reply would come back to us by January or early February. We are now in March and we have had no reply. The situation is now getting to be intolerable.

Mr. Patrick McNair-Wilson

What discussions were held about preventing the export of cheap butter to third countries? Is the right hon. Gentleman aware that the people of this country are fed up with the idea of selling butter at 162p per lb. to the Russians while they themselves have to pay nearly 60p per lb?

Dr. Owen

I am well aware of the strong feeling, which I share. I spoke about this in the House during the foreign affairs debate. This matter will have to be discussed by the Agriculture Council. But it did not come up in the Foreign Affairs Council. I gather that it is being discusssed today in the European Parliament.

Mr. Raphael Tuck

Was there any discussion about the practice of keeping the price of milk artificially high in the Community and elsewhere? Does my right hon. Friend agree that the maintaining of high prices can cause some countries to produce milk in excess of their requirements, thus prejudicing their production of grain, which is most essential to them?

Dr. Owen

This is a matter for my right hon. Friend the Minister of Agriculture. I know that he is concerned about this. Of course, that has been the tradition for many years in this country. In fact it was part of the 1947 agricultural legislation that we would intervene on market prices, and that we would not have a completely free market in agriculture. That has been a basic agreement on both sides of the House. Some intervention gives stability to the farmers planning forward. We have to look at this in the round. There have been advantages in having interventions, but what is wrong is when we get substantial surpluses year after year and then price increases on the existing surplus commodities. That is what has caused concern.

Mr. Marten

If the summit meeting is genuinely supposed to be a meeting of Heads of Government, would it not be a slight mistake to dilute it by having the President of the Commission there who is the head of a Civil Service apparatchik? Cannot our Prime Minister, who is the head boy of the Community, represent the Community perfectly well?

Dr. Owen

It does not come as any major surprise to me that the hon. Gentleman takes that view.

Mr. Loyden

May I bring my right hon. Friend back to the question of Romania? Would he not agree that his not inconsiderable influence in Europe ought to be used to ensure that the greatest efforts are made by Europe because of the political implications of such aid being made available?

Dr. Owen

I share my hon. Friend's concern. All the reports show that this has been a tragedy. We should give every help that we can. We have already expressed our willingness and concrete support with medical aid and in other areas. If there is any way in which the Community can help in the rebuilding of Romania's economy, we shall certainly look at this. We attach a great deal of importance to establishing relations with Eastern European countries. In particular, we have attached importance to our relations with Yugoslavia. Discussions are also going on about the relationship between the COMECON countries and the European Community. I hope that we shall be able to make progress in this matter.

Mr. Channon

Did the subject of direct elections to the European Parliament come up at the meeting? If so, and in spite of meetings that were held this week, will the Foreign Secretary reaffirm the Government's firm intention of bringing the necessary legislation before Parliament so that Britain's commitment to this can be met?

Dr. Owen

No, it did not come up. There is nothing I can add to what I have already said in this House.

Mr. Adley

Does the Foreign Secretary accept the simple proposition that the inability to land Concorde at New York will be harmful to the project and will damage the European aerospace manufacturers, and that the only people who would gain from this would be the United States aircraft manufacturers?

Dr. Owen

There is no more eloquent testimony to what I think about Concorde and its attributes, and why it should be flown into all the major airports of the United States, than the fact that in a few hours' time, along with the Prime Minister, I shall be taking off in Concorde and flying into Washington.