HC Deb 27 February 1980 vol 979 cc1358-69
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 of the European Community during March. The usual written forecast of business was deposited in the House yesterday. Heads of State and Government will meet in the European Council in Brussels on 31 March and 1 April. At present four meetings of the Council of Ministers are scheduled for March.

The Agriculture Council is expected to meet on 3 and 4 March, and again on 26 and 27 March, to continue discussion of the Commission's proposals on CAP prices for 1980–81; the proposed economies in the CAP to help balance the markets; and to streamline expenditure and proposals on policy regarding agricultural structures. Ministers are also expected to discuss the common organisation of the market in sheepmeat and French import controls; the extension of the application of the European currency unit in the CAP; and proposals to extend current arrangements for the distillation of wine.

The Finance Council is expected to meet on 17 March to resume discussion of the Commission's latest paper on convergence and budgetary questions. The Council is also likely to consider the report on the European monetary fund; the Commission's first quarterly review of the economic situation in the Community; and the proposal for a second tranche of loans under the Ortoli loan facility. Ministers will also continue their consideration of the financial effects of Commission proposals for CAP economies and the annual agricultural price-fixing.

The Foreign Affairs Council will meet on 17 and 18 March and is expected to discuss preparations for the next European Council, at which our main concern will be to find an adequate and lasting solution to the budget problem. Foreign Ministers may also discuss Community reaction to the Soviet invasion of Afghanistan; the Community attitude to the global negotiations on international development issues, which are to be launched by the special session of the United Nations General Assembly late this year; safeguard action on synthetic textiles; the Community's external steel policy; a report on Community relations with the Gulf States; the conclusion of the European Community-Yugoslavia cooperation agreement; a follow-up to the meeting of the European Community-Turkey Association Council on 5 February; and a review of progress in negotiations on adaptation protocols for Greek accession.

The Council will also examine the short list of developers' projects selected by the Belgian Government for the construction of a new building to meet the Council's accommodation needs following enlargement.

Mrs. Dunwoody

As it is now painfully obvious that in spite of the aristocratic swanning around the capitals of Europe by the right hon. Gentleman there is not to be an early meeting, what contingency plans has his Cabinet produced for dealing with the budgetary question, if we are not even to receive the same sort of offer as was made at earlier meetings?

What does the Cabinet intend to do? Does it intend not to pay over our proportion of the VAT? If not, how long does it expect to continue paying for many of the absurdities of the existing Community policies?

When the discussion of the sheepmeat regime takes place will it be made clear that the sort of action taken by the French at the present time, which removes one ban and replaces it with a totally unacceptable import levy, will not in any way contribute to any Community understanding?

Will the Lord Privy Seal tell us that it is his intention and that of his right hon. Friends to resist any attempt to push forward an ethyl alcohol scheme that would have a great effect on jobs and on the relevant industries in Britain?

Will the right hon. Gentleman ensure that when the cane sugar arrangements are discussed the interests of African, Caribbean and Pacific countries will be borne in mind, as well as those in the sugar industry in this country who are directly involved?

Does it really seem sensible, when there is already an outpouring of moneys that the Community can hardly afford, to con- sider developers' plans for yet another building to meet the Council's accommodation needs?

Sir I. Gilmour

To take the hon. Lady's last question first, as the present building would not be large enough following the enlargement of the Community, I should have thought it highly necessary to have a new building.

On the question of sugar, of course the points raised by the hon. Lady will be taken into account. I agree that the latest French measures are no less illegal than their previous measures.

The hon. Lady's first question, as she must realise, is entirely hypothetical. We hope to make progress in the normal process of negotiations, which is now taking place. We shall seek every possible means to achieve a solution.

Mr. Cormack

At which of the many meetings to which my right hon. Friend referred will butter be discussed? When it is, will he make it abundantly clear—or will my right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs make it clear—that in no circumstances will the British Government agree to sell subsidised butter to the Russians so that they have more money for guns?

Sir I. Gilmour

The matter will be discussed at more than one meeting. It will probably be discussed by the Foreign Affairs Council as well as the Agriculture Council. As my hon. Friend knows well, it is our view that such exports of subsidised butter to Russia are wrong and should cease. He will remember that there was a Council decision on 15 January that traditional patterns of trade should continue. We are monitoring the position carefully and will take account of his remarks. He will be aware that other countries take a slightly different attitude.

Mr. Cryer

Will the Lord Privy Seal explain what he intends to do about the £1 billion contribution to the budget, 80 per cent. of which goes to the CAP? Will he confirm that unless there is unanimity of agreement, the position of the CAP will not be changed one jot, and that we shall continue our pathetic stance of accepting all the rules of the EEC, making no move to get out and paying through the nose for it?

Sir I. Gilmour

The figure is nearer 70 per cent., but I agree that it is far too high. I do not think that there is anything pathetic about our stance. We have not the remotest intention of getting out of the EEC.

As I said earlier in answer to a question from the hon. Member for Crewe (Mrs. Dunwoody), our intention is to continue negotiating and to reach an agreement. On the tour to which the hon. Lady referred, in childish terms, at least I can say that everybody agreed that it was in the interests not only of Britain but of the Community to get the issue out of the way.

Mr. Kenneth Lewis

Accepting what my right hon. Friend said about the continuous discussions on budgetary policy since it was last discussed by the Council of Ministers, will he tell me at which meeting it will be discussed again in the next few weeks?

Sir I. Gilmour

I made it clear in my statement that it will be discussed at the Council of Ministers' meeting on 17 and 18 March. Above all, it will be discussed at the summit on 31 March and 1 April.

Mr. Jay

What has become of the special summit meeting on the British budget contribution, which was pressed for by the Prime Minister in February?

Sir I. Gilmour

The last time that we discussed the matter I told the right hon. Gentleman that it was decided at Dublin that it would be a matter for the presidency, namely, Senor Cossiga, to decide whether there was a sufficient prospect of agreement to make such an early summit worth while. He decided that that condition precedent was not in existence.

Mr. Nelson

My right hon. Friend said that monetary matters may be considered. Does not he agree that the relative stability of European currency exchange rates since the introduction of the European monetary system has provided a welcome degree of confidence, on which businesses can make decisions? Will he consider ensuring that Britain becomes a full member of the scheme?

Sir I. Gilmour

I entirely agree with my hon. Friend that the EMS has obviously benefited Europe. However, he and our partners are aware of the particular difficulties that we face because of our currency being a petrocurrency. Therefore, we must consider the matter even more carefully than we would otherwise have to do.

Mr. Benn

Has the right hon. Gentleman considered the growing pressure for some import controls over subsidised steel and, indeed, car imports into this country from the Community? Have the Government raised this matter with the Council of Ministers, or with Ministers? Can he explain why we should have to pay more for our food than we would have to pay on world markets, whereas in a crucial industrial area we are being badly hammered by subsidised imports?

Sir I. Gilmour

There has been no pressure on us to ban imports of steel or cars. As to the right hon. Gentleman's general question, as he was a member of a Government who twice applied to join the Community, and as he remained a member of the Government, after the referendum, he knows the answer to that question perfectly well.

Mr. Dykes

Can my right hon. Friend confirm robustly that there is every prospect of the British budget deficit problem being satisfactorily solved and negotiated during the next few months and that that will not be a problem with proper European co-operation and good will between the member States? In contrast to the hysteria from Labour Members, surely we must continually remind ourselves that the figure of £1 billion is only the inflation increase on the original White Paper figures when we joined.

Sir I. Gilmour

I agree with my hon. Friend that it is important, not only to us but to the Community, that we should reach an agreement on this matter. There is no doubt that we have an unanswerable case. We shall continue to put it, and the negotiations are continuing.

Mr. Spriggs

Will the right hon. Gentleman explain what he intends to do about the policy of the French Government to carry out what are termed "illegal practices", first, by banning imports of British mutton and, secondly, by opening their doors to mutton and putting a levy on it? What steps is he about to take to stop these illegal practices by the French Government?

Sir I. Gilmour

The hon. Gentleman is quite right. As I said earlier, those practices are illegal. As the hon. Gentleman will know, we have pressed the Commission to take interim measures in the courts. As he also knows, the Commission is the guardian of the Treaty and it is for it to act, not for us. We can only ensure that our views are made very clear, and that is what we have done.

Sir Anthony Meyer

Does my right hon. Friend recall that those who are now pressing for import controls are those who urged that in our relations with the EEC we should have industrial free trade as a better solution than membership of the Community? Will he remind them that membership of the EEC is something conceived not as a solution to Britain's short-term problems but as a framework within which, over generations, this country can better secure its future?

Sir I. Gilmour

My hon. Friend is perfectly right. There has been a most distressing pattern of events by the Labour Party, of which it will be well aware. Basically, when it is in government it is in favour of the European Community and when it is in opposition it is opposed to it. That is not a proper way for a responsible party to behave.

Mr. Stoddart

In the light of the statement made by a Conservative Member of Parliament that the Cabinet is openly split on EEC matters, can the right hon. Gentleman confirm that it is still the Government's policy to get rid of our net contribution to the EEC? Can he also say how he will be successful in the negotiations about that unless he is prepared to take action to back up his words?

Sir I. Gilmour

I do not accept the hon. Gentleman's original premise, and I do not know where he got it from. As I have told the House frequently, we are seeking a genuine compromise. However, our partners are well aware that our margin for manoeuvre is small, and that remains the position.

Mr. Costain

In view of the special problems of the fishing industry, at which of the meetings will that matter be discussed?

Sir I. Gilmour

I think that the Council responsible for fishing has been postponed until April.

Mr. Dalyell

I should like to ask the right hon. Gentleman a question, notice of which I gave his office this morning and which was raised by my hon. Friend the Member for Crewe (Mrs. Dunwoody). It relates to ethyl alcohol. Can that subject be put on the agenda for 3 or 4 March? A £50 million investment is at stake at Grangemouth, and BP Chemicals must know one way or the other which way the proverbial cat will jump?

Sir I. Gilmour

I am grateful to the hon. Gentleman for giving my office notice of that question. We share his view of the importance of the matter. He will appreciate that we cannot dictate the agenda. I shall certainly bring the matter to the notice of my right hon. Friend. The hon. Gentleman will realise that the discussion of an alcohol regime properly takes place in the Agriculture Council, and my right hon. Friend the Minister of Agriculture, Fisheries and Food is fully aware of the wider industrial implications about which the hon. Gentleman talked—in particular, the important investment problem at Grangemouth.

Mr. Dalyell

rose—

Mr. Speaker

Order.

Mr. Gummer

Does not my right hon. Friend agree that it would be much easier to organise and deal with transgressions of the Treaty if we concentrated upon those and did not constantly use the EEC as the excuse for Britain's failure and under-production?

Sir I. Gilmour

I agree with my how Friend. Our problems, which date over a number of years, are very deep-seated, and it is entirely wrong to use the European Community as a scapegoat for them. Nevertheless, as I am sure the whole House will agree, there is a fundamental problem with regard to the budget, which needs to be solved.

Several Hon. Members

rose—

Mr. Speaker

Order. I do not propose to call any hon. Member twice. I propose to call those hon. Members who have been rising, if they will co-operate with me.

Mr. English

I did not hear the right hon. Gentleman mention the proposals that the President of the Commission at the Savoy yesterday said would be put to the Council before the end of March. Is he aware that there is a proposal for a common energy policy, about which the President said that the only way to save energy was to increase its price, if necessary by a levy?

Sir I. Gilmour

I am sorry, but I am not aware of what went on at the Savoy yesterday. The Commission is certainly considering proposals for a common energy policy, and when it comes forward with proposals we shall give them serious consideration.

Mr. Squire

Will my right hon. Friend confirm that in any discussions on the possible accession of Turkey he will reiterate the Government's view that there can be no accession without a firm and just final solution to the problem of Cyprus?

Sir I. Gilmour

With respect, I think that my hon. Friend is jumping two fences at once and has gone rather further than we are at the moment. Turkey has not yet applied to join the Community. It may do so, but that is some way ahead. While, like him, I am anxious to see the problem of Cyprus solved, I do not think that it should be linked to Turkey's accession to the European Community.

Mr. Spriggs

On a point of order, Mr. Speaker. You have just announced to the House that you would not call an hon. Member twice. Is the right hon. Gentleman aware that precedent has it that many hon. Members have been called twice in the years before he took the Chair? Will he reconsider his reply to my hon. Friend—

Mr. Speaker

The hon. Gentleman does not address me as "the right hon. Gentleman".

Mr. Spriggs

I apologise, Mr. Speaker.

Mr. Speaker

I remind the House that it is true that from time to time hon. Members are called twice. There is an exception this afternoon. I understand that the hon. Member for Crewe (Mrs. Dunwoody) wishes to be called again at the end of questions. I indicated that in this series of questions I do not propose to call any Back Bencher twice. It is not fair to the House. We have other business to conduct.

Mr. Straw

The Lord Privy Seal spoke of an adequate and lasting solution. Will he confirm that by adequacy he meant not less than £1,000 million? As there was insufficient agreement to call a meeting of Heads of State in February, what evidence does the Lord Privy Seal have that a meeting called in March will produce agreement?

Sir I. Gilmour

As to the amount of money, as I have already said, we are seeking a genuine compromise. My right hon. Friend the Prime Minister has said that since 3 December, and I hope that the Shadow Minister of Agriculture will shortly catch up with events. That remains our position.

The hon. Gentleman is labouring under a misconception. The Council meeting on 31 March and 1 April is not a special Council. It is a meeting that is taking place in the ordinary course of events.

Mr. Hill

In view of the serious decline of the United Kingdom merchant shipbuilding industry, can the Lord Privy Seal give the House any news of progress of the Council of Ministers on the scrap and build scheme that the Commissioners raised recently? I hope that that matter will come before the Council of Ministers before too long.

Sir I. Gilmour

I shall certainly take advice on that. As far as I know, there are no plans for it to be raised next month. I shall make inquiries, and I shall write to my hon. Friend.

Mr. Donald Stewart

Is the Lord Privy Seal aware that we shall never have a negotiating stance of any muscle as long as his right hon. Friend the Prime Minister continues to repeat that we shall never withdraw from the Common Market under any circumstances?

Sir I. Gilmour

I do not agree. My right hon. Friend the Prime Minister's negotiating stance has been extremely strong throughout. It is worth bearing in mind that she and the Government have achieved a good deal more than our predecessors.

Mr. Marlow

According to a parliamentary answer given yesterday, Holland, which is one-fifth the size of Britain, receives £200 million more each year from the EEC. Denmark, which is only one-tenth the size of Britain, receives as much through the CAP as Britain receives. Since we receive less than 20 per cent. of our gross contributions in income from the CAP and Ireland receives nearly 280 per cent. of its contributions, will my right hon. Friend tell the House what action Britain and the Government will be forced to take if we do not achieve an equitable solution? Will he further accept that whether or not he believes that we will never leave the Common Market, if things do not go right there will be an overwhelming movement within the country to take Britain out, which I should not like to see?

Sir I. Gilmour

My hon. Friend has merely rehearsed at some length and in detail what we already know. Our net contribution is unreasonably high. Because we are by far the biggest net contributor to the European Community budget it follows that most of our partners are net recipients. I agree with my hon. Friend.

Mr. Spearing

Since the cost of disposing of food surpluses by the EEC is now about £8,000 million a year, to which the United Kingdom contributes heavily, will the Minister of Agriculture suggest that there should be no further disposal of additional surpluses, that quotas should be applied, and that over a further period the surpluses should be successively reduced? Would that not be an equitable solution to the surplus problem?

Sir I. Gilmour

That would certainly be one solution, but whether it would be agreed is another matter. In general, I entirely agree with the hon. Gentleman that the costs of disposals and the creation of disposals impose a grotesque burden upon the agricultural budgets of the entire Community. One of our main efforts should be to get rid of the surpluses and to ensure that they do not continue.

Mr. John Townend

Does my right hon. Friend agree that the recent proposals of the Commission in respect of the co-responsibility levy for milk and the quota for sugar show distinct anti-British bias? What steps do the Government intend to take to reverse that bias?

Sir I. Gilmour

I am not sure that they show a distinct anti-British bias, but there are some aspects of them which are unsatisfactory. My right hon. Friend the Minister of Agriculture, Fisheries and Food has drawn the attention of the Commissioner and of the Agriculture Council to those matters. As I said earlier in my statement, we shall be discussing them twice more this month.

Mr. Ioan Evans

In the television programme "Weekend World" in January the Prime Minister said that she hoped to make a £2 billion cut in public expenditure, and that £1 billion of that would be the cut in our contribution to the EEC budget. Is it not important that the House should know the understanding between the Government and the EEC before we discuss the Budget, or are we to anticipate a £2 billion cut in the Budget on the social services because the Government have failed to cut the EEC contribution?

Sir I. Gilmour

I do not think that the hon. Gentleman has quoted my right hon. Friend the Prime Minister correctly. He knows when the Budget will be announced, and in the nature of matters the budget will precede the European Council. It cannot be altered.

Mr. Winnick

As the next Cabinet Minister to be publicly rebuked by the Prime Minister, will the Lord Privy Seal be a little more forthright and explain to the House what will happen if agreement cannot be reached with our partners over Britain's disgracefully high net contribution? Is he saying that regardless of a lack of agreement no further action, such as the possibility of withdrawal, will be undertaken by the Government?

Sir I. Gilmour

As the hon. Gentleman will be aware, in answer to questions by Mr. Robin Day on "Panorama" on Monday evening my right hon. Friend the Prime Minister repeated what she said on 3 December last year, namely, that there were two possibilities—obstruction and withholding. She said that those were two options that we considered, but that we should be loth to carry them out because we were aiming for a solution.

Mr. Parry

Will the Lord Privy Seal confirm that at their meeting on 3 and 4 March, the Agriculture Ministers will discuss the proposals of the Commission for the reduction of sugar beet quotas? Will his right hon. Friend the Minister of Agriculture support those proposals?

Sir I. Gilmour

As the hon. Gentleman knows, my right hon. Friend has certain reservations about the proposals on the sugar quotas, but they will certainly be discussed at the Agriculture Council.

Mrs. Dunwoody

Will the Lord Privy Seal please tell hon. Members why suddenly his vocabulary has changed in relation to our contribution to the budget? The right hon. Lady the Prime Minister originally asked for a broad balance. We are told that she is now asking for an equitable solution. If no offer that produces a broad balance is forthcoming, what do the Government intend to do to stop the bleeding away of finance from Britain into schemes that cannot be supported?

Sir I. Gilmour

The hon. Lady has a very odd idea of what is sudden. We have been talking about a genuine compromise since 3 December—for three months. As to what we shall do, I have already given the answer, and I have nothing further to add. Plainly, we shall have to reconsider our position. We are making progress. Our objective—I think that the Shadow Minister of Agriculture will agree—is to aim for a solution and not to utter threats.