HC Deb 29 June 1979 vol 969 cc782-9
The Lord Privy Seal (Sir Ian Gilmour)

With your permission, Mr. Speaker, I will make a statement about the main business to be taken by Ministers in the European Community during July. The more detailed written forecast was deposited on 27 June. At present, four meetings of the Council of Ministers are proposed for July.

The Finance Council will meet on 16 July and is expected to discuss the general economic prospects of the Community with particular reference to the effect of oil price rises, and more specific discussion of items remitted from last week's European Council.

The Budget Council will meet on 23 July and will establish the draft general Community budget for 1980.

The Foreign Affairs Council will meet on 24 July. Ministers will again discuss the Commission's proposals for regulation of State aids to the steel industry. They will also discuss the outstanding points on the GATT multilateral trade negotiations and the negotiations with China for an agreement on trade in textiles.

The Agriculture Council will meet on 23 and 24 July. It will resume discussion of the organisation of the market in potatoes and is also expected to consider agricultural structural problems in the Community.

Mr. Shore

I thank the Lord Privy Seal for what, I believe, is the first oral statement in this Parliament on forthcoming Community issues. I think that the right hon. Gentleman is aware of the mounting anxiety on many aspects of EEC policy affecting the affairs of this country—anxieties that were certainly reinforced by the statement, only a week ago, by the Minister of Agriculture, Fisheries and Food.

The right hon. Gentleman will know of the importance that the House attaches to general statements on Community business. Will he therefore affirm that it is his intention to make regular oral statements to the House, and will he, in future, see that they are made on days other than Friday, when so many right hon. and hon. Members who have constituencies outside London are, inevitably, in those constituencies?

Turning to the statement, I should like to ask three questions. First, with regard to the Economic and Financial Council, following the European summit meeting last week and, in particular, the agreed statement that priority should be given to measures that enable a satisfactory level of growth to be attained in the Community, what proposals has the right hon. Gentleman for countering the known deflationary impact of our own economic policies as pursued in the recent Budget?

Secondly, with regard to steel, which is a very important issue, affecting, as it does, the prosperity and livelihood of so many whose jobs are at present threatened, I hope that there is no question of the right hon. Gentleman accepting any limitations on the regional and other industrial aids that we give to our hard-pressed industry. Any such move would raise major questions not only on the practical problems that would be faced by the industry but on the whole vires of the confidence of the Commission in this area.

Lastly, what has happened to the Lomé Convention renegotiations? Can the right hon. Gentleman tell us what difficulties are being experienced, and what the attitude of Her Majesty's Government is to them? In view of the great importance of the Lomé Convention, affecting as it does so many other countries, will the right hon. Gentleman consider asking his hon. Friend the Minister with responsibility for overseas development to make a further statement at the appropriate time?

Sir I. Gilmour

With regard to procedure, the day on which statements are made is not entirely a matter for me, though I agree that Friday is not always the best day. However, the House has been very busy. I shall not undertake to make an oral statement every time because the business will not always justify it. I suspect that that is normal.

Regarding my right hon. and learned Friend's Budget, I do not think that matter arises in connection with this statement.

I agree that steel is a very important matter. In our view, there is doubt about whether article 95 of the Treaty of Paris is an adequate basis for the decision. We are looking at ways in which this difficulty, which has significant legal and constitutional implications, can be overcome. However, we are confident that the present text would not curtail investment in the iron and steel industry, or damage employment within that industry.

I appreciate the right hon. Gentleman's concern regarding the Lomé Convention. There is a detailed question on the Order Paper today, to which I shall obviously give a full reply. Briefly, I can tell the House that, as a result of the ministerial conference in Brussels from 25 to 27 June, negotiations for a new five-year convention have now been concluded and the ACP countries are considering their decisions on the resulting text.

Mr. Spearing

I reiterate the discontent that has been expressed about statements on a Friday. Will the right hon. Gentleman have a word with his right hon. Friend the Leader of the House about that? The pressure on time yesterday was such that perhaps he will reconsider this in the future.

Does the right hon. Gentleman agree that the first meeting on 16 July, following the European Council meeting, may require regulations, and one of them is mentioned? Will the Government put a block on new regulations that are made, or, indeed, those that are outstanding, to enable the new Scrutiny Committee, when it is set up, to look at them and to recommend debates to the House? How many regulations are being reserved by the Government until the House has had, as is the practice, the opportunity to discuss them?

Sir I. Gilmour

I cannot tell the hon. Gentleman that we shall place automatic blocks on anything that is decided in Brussels merely because this House has not yet set up a Scrutiny Committee. I do not think that would be the right way in which to proceed. However, I can tell him that a Scrutiny Committee will shortly be set up. That will be much welcomed by the whole House, including the hon. Gentleman and myself. My right hon. Friend the Chancellor of the Duchy of Lancaster is discussing this matter through the usual channels, and I think that the Committee will be set up very quickly.

Mr. Fletcher-Cooke

Does my right hon. Friend agree that when making oral statements of this sort it is in a way more interesting to hear the results of past meetings than a mere agenda for the future? We had an interesting example just now from my right hon. Friend's own lips when we learnt of the very satisfactory results of the Lomé renegotiation. Secondly, can he tell us whether the Finance Ministers, when they meet in July, will be discussing the results, effect and experience of the six months of operation of the European monetary system, and whether the new, welcome initiative that the Government have taken will be followed further?

Sir I. Gilmour

I agree that it is much more interesting to discuss what has happened than what may happen, but this is the procedure of the House, and I gather that it has gained the approval of the House. Therefore, we are going along with it. If a substantial body of opinion were to ask us to alter it, we should do so. I expect that the EMS will be discussed at the Council meeting, but, as my hon. and learned Friend knows, the substantive review of the EMS is to take place in September.

Mr. Benn

What arrangements does the Community intend to make to discuss the energy situation? This was not referred to at all in the Queen's Speech. However, it was central to the meeting of the European Heads of State, and it is now being discussed in Tokyo. Can the right hon. Gentleman tell the House whether the Energy Council is to be summoned? Will he tell the Leader of the House that in view of the central importance of energy the House of Commons must discuss it before the end of July, in order to bring its mind to bear on problems that will dominate the economic, industrial and social life of this country and the Western world over the next year or two, and may be much further into the future?

Sir I. Gilmour

I am sure that the whole House agrees with the right hon. Gentleman about the dominating importance of energy. That has, indeed, been demonstrated by the prominence that the subject was given at the European Council at Strasbourg and the prominence that it is currently being given in Tokyo. Since my right hon. Friend the Leader of the House is present, I do not think that I need to pass on what the right hon. Gentleman said about a debate before the end of July.

Mr. Cryer

I, too, should like to emphasise the point that has been made about announcements of this importance on a Friday, when it is clear that some hon. Members are not here. Will the discussion on 23 July on the preliminary draft budget include a provision for a reduction in our contribution? Has it been agreed in principle that there will be a reduction in our contribution to the budget, or is it merely an examination of possibilities?

Secondly, does the right hon. Gentleman accept that in the foreign affairs discussion on 23 and 24 July the question of EEC-China textiles will be a delicate and important one? Can he assure us that the interests of the British textile industry, which, as the right hon. Gentleman knows, has been through a long and difficult period of negotiation which has resulted in the renegotiated multi-fibre arrangement, will be fully safeguarded, and that the advent of Chinese textiles will not harm the interests of either the Lancashire or Yorkshire textile industries?

Sir I. Gilmour

As the hon. Gentleman knows, the decision of the Strasbourg conference was that the Commission should be asked to examine the facts and come up with proposals. I doubt whether much progress will have been made by this particular council, although it may have been. Basically, I agree with the second half of what the hon. Gentleman said. We very much hope that an agreement with China can be concluded in the near future, but we have made it perfectly clear that the terms must be consistent with the Community's overall external textile policy, and that means that our textiles must be safeguarded.

Mr. Ioan Evans

Now that it is generally recognised that we are paying far more into the EEC than we are getting out of it, what positive action will be taken by the Government to ensure that we make a more rational contribution? When the CAP is discussed, will the right hon. Gentleman ensure that consumers in this country are represented in those discussions, because the Minister of Agriculture, Fisheries and Food has been concerned with the short-term interests of the farming community in this country? We were in a far better position when we had a system of guaranteed prices and deficiency payments than we are at present, when we are subsidising Bavarian and French farmers.

Sir I. Gilmour

I do not think that the hon. Gentleman could have been paying attention to what has been happening over the last week. He must surely know what was decided at the European Council in relation to the budget. We agree fully that our contribution is excessive. As I have stated in answer to a previous question, arrangements were made for the Commission to look at this and to come up with proposals. The idea that my right hon. Friend the Minister of Agriculture, Fisheries and Food is concerned only with producers is quite wrong. The Labour Party seems consistently to have got this wrong. It ignores the fact that last week's agreement was an extremely good one. It is much the best CAP price settlement that we have ever had. There was a milk price freeze for the first time, the average price increase was only 1.2 per cent., and my right hon. Friend avoided a grossly discriminatory co-responsibility levy. It was, therefore, an extremely satisfactory agreement. I think that it would be only honest and generous for the Labour Party to admit it.

Mr. Skinner

Is the right hon. Gentleman aware that even most of the Tory newspapers regarded the so-called success of the mission of the Minister of Agriculture, Fisheries and Food as little more than a sell-out for British consumers? I suppose that there was a hidden benefit for a few farmers, but we expected that to happen. Not only is it wrong for the right hon. Gentleman to deliver these statements on a Friday, when a lot of the moonlighters have gone away and are doing whatever they are doing; it is doubly wrong when measured against the fact that the Foreign Secretary is in the quango down the road. That makes it even worse.

On the question of steel aid, will the right hon. Gentleman bear in mind that when I spoke to the 500 Corby steelworkers yesterday they seemed to think that because of Common Market intervention they looked like losing their jobs unless the Government changed their tune? What is needed is for the Common Market not so much to give money to get people the sack, but to use money to save and create jobs in the steel industry.

Sir I. Gilmour

I am not really deeply concerned about what the hon. Gentleman said to the Corby steelworkers. In fact, what the steel aids aim to do is to help the steel industry, as the hon. Gentlemen well knows. I take the point about making these statements on Friday, but one of the consolations is that I can be reasonably confident that the hon. Gentleman will be here.

It is wrong to say that the consumer did badly out of the agriculture price review.

It is true that many newspapers got it wrong last Friday, probably because of a question of timing. They had details of only half of the agreement by the time they went to press. Therefore, their readers were misled, and I am not sure that all of the newspapers have taken steps to see that their readers have been "un-misled." I hope that they will do so.

The effect of the 1½per cent. increase in common prices, except milk, on the food index was plus 0.25 per cent., and the cost of the butter subsidy puts the equation the other way, because it is minus 0.56 per cent. There is, therefore, a gain. Against that, there is the cost in the food index of the green pound devaluation of 1 per cent., which will certainly, in the long run, help the consumer, and in the short run it helps the farmer very greatly.

Mr. Hill

Does my right hon. Friend agree with the very firm stand taken by Heads of State of EEC countries in Tokyo this week on the fact that they will economise, on the other side of the coin, and develop atomic power stations in Britain—a race that we are fast losing—and that we must deplore the attitude of the American Government in imposing no restrictions at all on oil consumption and exacerbating the energy crisis?

Sir I. Gilmour

Economy in fuel consumption is vital to us all. We have to take account of the American constitution, which means that, whatever the President may wish, his will does not necessarily prevail. I am not sure that condemnations are necessarily very helpful at this point.

Mr. Shore

I think that the right hon. Gentleman protests too much about the agricultural results, but I put that on one side and return to the question of when and what kind of statement should be made. I hope very much that we shall have a regular habit of reports to the House on the results of particular Council meetings, just as we have them in the wake of Agriculture Council meetings. However, on the question of the forward look, which gives a wide-ranging opportunity for hon. Members who are genuinely interested to range over the wide and ever-growing field of matters that come under the competence or interest of the EEC, perhaps I may again press the right hon. Gentleman, in the presence of his colleague the Leader of the House, to think again about the day, as I recall it, under the previous Government, when all statements—when it was necessary to make them; I accept that there can be occasions when the business is only small—were made after Question Time on a Tuesday. I believe that that would be much more to the convenience of Members.

Sir I. Gilmour

I do not think that I have been saying at any point that I regard Friday as an ideal day, but this week there was no other time when this statement could have been made. I cannot give any absolute undertaking, but I take the right hon. Gentleman's point.