HC Deb 31 January 1980 vol 977 cc1581-92
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 February. The written forecast of business was deposited in the House on Monday 28 January. At present three meetings of the Council Ministers are proposed for February.

The Foreign Affairs Council will meet on 4 and 5 February and is expected to discuss an improved Commission mandate for the new co-operation agreement with Yugoslavia; revised proposals for the non-quota section of the regional development fund; the problems caused by imports of certain United States synthetic textile products; and the voluntary restraint of certain textile products from Greece during 1980. Ministers are also expected to consider Community relations with ASEAN in preparation for a March ministerial meeting and the signing of a co-operation agreement; a negotiating mandate for talks with Brazil on a new co-operation agreement; and relations with Turkey preparatory to a Community/Turkey Association Council meeting to take place in the margins of the Council. A second meeting at ministerial level in the Portuguese accession negotiations will also be held in the margins of the Council.

The Finance Council will meet on 11 February and is expected to discuss the financial implications of the Commission report on changes in the common agricultural policy to help balance the markets and streamline expenditure. The Council is also likely to discuss ways of improving co-ordination of economic policy in the Community and there may be some discussion on ways in which Community expenditure in the United Kingdom could be increased. Ministers are also expected to exchange views on the economic situation in the Community, especially in the light of recent oil price developments, and have a preliminary discussion on the report prepared for the European Council on the problems that may be encountered, and possible solutions, in setting up a European monetary fund.

The Agriculture Council will meet on 18 and 19 February and is expected to continue discussion of the report on changes in the common agricultural policy and the common organisation of the markets in wine, potatoes and sheep meat, including discussion of the French import controls. The Council is also expected to discuss access arrangements for New Zealand butter, post-1980 and aspects of policy regarding agricultural structures, and to have a preliminary exchange of views on the CAP price proposals for 1980–81.

Mr. Shore

The House, will be grateful to the Lord Privy Seal for resuming his practice of making oral statements on Community business, however grey the prospect may occasionally appear to be, because it gives us an opportunity to cover a wide range of matters which are of great interest to different Members of the House.

I shall be brief. I have three main queries to put to the right hon. Gentleman. The first relates to the co-operation agreement that we hope to see concluded with Yugoslavia. I had not realised—possibly the fault is entirely my own—that we had not yet even reached the point of agreeing a mandate. However, in view of the acceleration of events in Eastern Europe, I hope that the right hon. Gentleman will press very strongly in the next appropriate Council that agreement should be reached on a negotiating mandate and that a satisfactory agreement should be made with this important country, whose economic prosperity we all wish to see sustained.

There are two other matters that I want to raise. The right hon. Gentleman will recall his own statement of 24 January on the subject of Afghanistan. In that he dwelt on two matters, not only of British importance but also of European Community importance. First, there was the question of exceptionally favourable credit terms offered in trade—mainly in capital goods—to the Soviet Union; and, secondly, there was the question of the subsidised sales of butter, meat and sugar to the Soviet Union. Can he tell us whether—and, if so, in what Council—these matters are to be discussed, and whether specific Commission proposals will be considered at those meetings? Will he take on board the fact that we find it absolutely intolerable that subsidised sales of butter, meat and sugar should continue? We are not in favour of such sales to any advanced industrial country, and we certainly do not see why the Soviet Union should be the particular beneficiary.

My last question relates to that elusivetopic, which I would have thought is of some importance to the country, to the House and to the reputation of the Prime Minister. I am, of course, referring to the heart issue of the recent Dublin summit. Where is it? What has happened to it? The most elusive reference that I could find was in the right hon. Gentleman's statement when he said: "There may be some discussions on ways in which Community expenditure in the United Kingdom could be increased". What has happened to all those bold, brave pronouncements about a broad balance of expenditure and income at Dublin and not later? Are we here witnessing one of the most appalling retreats—and, frankly, one of the most public humiliations—that this country has seen for a long time?

In commenting on this, will the right hon. Gentleman indicate in which of these many councils these matters will be raised? Will he further tell the House, because it is entirely appropriate for him to do so, what has been the result of his own pererinations about the West European capitals in the last two or three weeks and what was the result of Signor Cossiga's recent discussions with the Prime Minister?

Sir I. Gilmour

I entirely agree with the right hon. Gentleman that it is wholly desirable that the question of Yugoslavia should be concluded as soon as possible. He will be aware that it was agreed at the last Foreign Affairs Council that matters should be speeded up. In fact, we hope to conclude the terms of a proposed agreement at the February Council.

As to my statement on Afghanistan, as the right hon. Gentleman knows the Government do not favour the sale of subsidised butter, and so on, to Russia. However, as the right hon. Gentleman will be aware from his knowledge of the procedure, these matters will be discussed in management committees rather than in Council. We shall have to see what happens. The Commission will have to study the implications of the decision that was made at the last Foreign Affairs Council about carrying out the mandate that it was given.

The right hon. Gentleman displayed a quite unaccustomed and unwonted naivety in regard to his last question. He must be well aware that everything which is important in the Community is not invariably discussed at every Council that is held. Although the question of our budget contribution probably will come up in the Finance Council, the fact that it will not be a main item in no way means that it has disappeared from view. He will be aware that my right hon. Friend and the Government had a satisfactory and friendly meeting with Signor Cossiga yesterday. It is up to Signor Cossiga to decide whether or not there should be an early meeting of the European Council. He said yesterday that he did not believe in being a prophet in these matters, and I do not believe in being a prophet either.

As the right hon. Gentleman said, I have completed my tour of European capitals. I discovered a general desire to get this problem solved. Obviously, there will have to be considerable negotiations between now and then, but the fact that the subject does not appear on the agenda of every Council that turns up in no way means that there has been any of the rhetorical stuff which the right hon. Gentleman put forward about a great retreat. We have made some progress—I am sure that he would agree that it has been greater progress than the previous Government made—and we look forward to making much greater progress during the next month or so.

Mr. Ioan Evans

With regard to our net contribution of more than £1,000 million, is there to be a summit meeting in the near future? Does not that have a great bearing on the Budget which the Chancellor will bring forward and on whether further public expenditure cuts will be made? Although there are important matters to be raised in the EEC, will the right hon. Gentleman assure us that the Government will not be raising the question of the Russian Olympics, because there is a feeling on both sides of the House that this matter has perhaps been overplayed by the Government?

Sir I. Gilmour

The hon. Gentleman must have decided on his questions before he listened to my statement, because I have already told him what I think about the prospect of an early conference. We cannot know whether the next summit conference will discuss the Olympics. By that time, the matter may well have been resolved.

Mr. Jim Spicer rose—

Mr. Speaker

In view of his obvious difficulty, if the hon. Gentleman would find it easier he may ask his question sitting down.

Mr. Spicer

My right hon. Friend will be aware of the widespread concern—indeed, dismay—that many people within the Community feel about our seeming lack of ability to work together in closer political unity, given the threats that we now face. Will he give an undertaking that, if the occasion demands, as it certainly seems to now, the Foreign Ministers will meet much more often to discuss political co-operation in order to achieve the unity that we so much desire?

Sir I. Gilmour

I am happy to assure my hon. Friend that the Foreign Ministers will meet in closer political co-operation whenever that is necessary, and that may well take place next week. As I think I have told the House before, it is a little unreasonable to expect the Community automatically to fall into full agreement on a matter so important as Afghanistan. Initially, there are bound to be different perceptions and reactions. To some extent, I believe that those have been exaggerated, but I entirely agree with the main drift of my hon. Friend's argument, which is that maximum unity within the Community on these matters is vitally important.

Mr. Straw

The news that the Foreign Affairs Council is to discuss the import of synthetic fibres from the United States will be greatly welcomed by those suffering from the importation of those fibres in the Lancashire textile and carpet industries in particular. Can the right hon. Gentleman say whether he anticipates that an EEC agreement will be reached at that meeting on firm action to be taken in respect of those imports?

I apologise in advance for appearing to be naive and confused about our budgetary contribution—lest the Lord Privy Seal admonishes me for it—but will he clarify, at least in my own mind, whether there will be a summit in February, as was half promised after Dublin? Or is it the case that the Prime Ministers of the member States of the EEC have not yet reached a stage at which they can even agree on the early meeting that was anticipated at the end of the Dublin summit?

Sir I. Gilmour

As the hon. Gentleman well knows, we have expressed considerable concern about the import of synthetic fibres from America, and we regret that the Commission's consultations with the Americans have not yet reached an agreement. It was agreed last December, as I think the hon. Gentleman knows, that the Commission would put forward proposals to the February Council, and we expect it to do so. I cannot anticipate what it will say, but we are certainly determined to achieve a satisfactory solution.

I have twice tried to answer the question about the February Council. As the hon. Gentleman will be aware, it was agreed at Dublin that the responsibility was in the lap of the Italian Presidency, which should decide whether an early summit meeting should be held. Signor Cossiga said yesterday that he was not in the prophecy business. As I said earlier, I am not in the prophecy business either.

Mr. Marlow

Although many hon. Members would dearly love there to be greater political co-operation with our friends in Europe, is it not impossible for Britain to co-operate politically with Europe until we get a fair deal on our contribution to the EEC budget? In view of the fact that the public and the House are becoming increasingly concerned about the issue, will my right hon. Friend speak to the Prime Minister to ensure that we can have an early debate in the House, so that our friends in Europe know precisely what we think about what is happening there at the moment?

Sir I. Gilmour

There are good arguments for a debate in the House, but the argument put forward by my hon. Friend in this respect is not good. Our friends in Europe know exactly what we think about the matter. I, and many other more important people have told them exactly what we think. The fact that we have considerable difficulties with our friends in Europe about our budgetary contribution does not, and should not stop us from co-operating with them on important world matters such as Afghanistan, which affects us all.

Mr. Dalyell

Even if the Lord Privy Seal cannot be expected to know the details, the Minister of State, Ministry of Agriculture, Fisheries and Food knows very well the importance of the issue of ethyl-alcohol to BP at Grange mouth, involving the possibility of a multi-million pound investment. Answering questions on agriculture, the Minister gave what I took to be a half promise to raise the question of the European directive at the earliest possible opportunity with his colleagues among our partners. Since hundreds of jobs are at stake, and since BP Chemicals may not go ahead with a heavy investment in ethyl-alcohol—if the project goes into operation—could this matter be regarded as serious? I hope that the Lord Privy Seal has been briefed by his Minister of State.

Sir I. Gilmour

Of course we regard the matter as extremely serious. We do not yet know whether it will be on the agenda, but if it is we shall treat it with extreme seriousness. I have noted all the points made by the hon. Gentleman, and I shall certainly pass them on to my right hon. Friend.

Mr. Body

I refer to the question put by my hon. Friend the Member for Dorset, West (Mr. Spicer). If it is the case that the EEC cannot agree about the aggression in Afghanistan, is there any hope that it will ever agree about any political subject?

Sir I. Gilmour

Perhaps my hon. Friend has not had time to read the declaration made by the EEC about the invasion of Afghanistan. If he does have time to read it, he will see that there was a firm denunciation of the Russian invasion.

Several Hon. Members rose—

Mr. Speaker

If hon. Members are brief, I shall call all those who have been rising.

Mr. Anderson

In the context of our budgetary contribution and the search for means of diverting extra EEC re- sources to the United Kingdom, will the Lord Privy Seal state whether the Government are prepared to take any initiative in respect of coal and steel and additional Community resources for the restructuring of these vital industries in the United Kingdom?

Sir I. Gilmour

We have put forward suggestions to our European partners for increasing Community expenditure in Britain. As the hon. Gentleman knows, the main cause of our grossly excessive net contribution is the shortage of EEC receipts in the United Kingdom. We have put forward various ideas, including the suggestions he raises. We now await the Commission paper on the subject, which should be published next week.

Sir Anthony Meyer

Is my right hon. Friend aware that there is general admiration for the extremely quiet and determined way in which he has pursued the subject of Britain's contribution? Does he none the less agree that, despite the enormous importance of getting the matter right, there is a still greater importance attached to the strengthening of unity in Western Europe, particularly at a time when the intentions of the Soviet Union are only too clear?

Sir I. Gilmour

I am grateful to my hon. Friend for his kind words. I agree that there are important external matters which affect the Community. I am sure that he will agree that this is an additional argument for solving our budget problems, so that the whole Community can get on with tackling these important problems.

Mr. Cryer

Does the Lord Privy Seal accept that the House is pleased that action is to be taken on synthetic textile products from America? At least, that was the purport of his statement. Will he explain what he means by the co-ordination of economic policies within the EEC? Does he also accept that, because we have the most significant textile and clothing industries, co-ordinaton of economic policies could result in real harm to the textile and clothing industries, which are already facing severe difficulties? Will he say a word about our massive £1 billion contribution to the EEC which the Prime Minister has promised repeatedly to wipe out? Does he accept that as time goes by, and nothing results from the negotiations, it will become, not so much a matter of the Iron Lady, but more a matter of the mouse that roared?

Sir I. Gilmour

I assure the hon. Gentleman that co-ordination of economic policies does not have as one of its objectives a harmful effect on our textile industry. That is very far from what we have in mind. He will probably agree on reflection that the second part of his question was a little contrived and I do not think that it needs a detailed answer.

Mr. Spearing

Will the Lord Privy Seal throw some light on three Delphic phrases that he used? First, he mentioned the margins of the Council. Will he tell us where they are, and who attends them? Similarly, are management committees run by officials, as are the margins of the Council? Finally, the Agriculture Council is to consider on 18 and 19 February aspects of policy regarding agricultural structures. Will the Lord Privy Seal tell us what that means?

Sir I. Gilmour

It is concerned with the possibility of the alteration of the CAP budget. Management committees are well established. I am surprised that the hon. Gentleman has not come across them before now. Of course, even with the best will in the world, Ministers cannot attend every meeting. Agricultural management committees work according to the directions given by the Council of Ministers. Margins of the Council deal with matters that do not happen in the full plenary session of the Council. They may take the form of other meetings outside. They are not quite the same as the usual channels, but they are analogous to them.

Mr. Jay

If we are co-operating with our EEC partners on great issues such as Afghanistan, can the Lord Privy Seal say whether subsidised EEC food is being exported to the Soviet Union at present?

Sir I. Gilmour

I have already given a partial answer to that question. It was agreed at the last Council of Foreign Ministers—and even before that—that pre-fixation should cease, It may be that some transactions are still in the pipe- line. As I suggested implicitly to the right hon. Gentleman, although we are opposed to the export of subsidised food to the Soviet Union, I would be misleading the House if I were to give any guarantee that we shall succeed in stopping it.

Mr. Maclennan

Can the Lord Privy Seal say what progress is being made in the consideration being given by the Government to the proposals of the Commission to spend some £10 million on the development of the Western Isles, and in particular whether they are pressing the views which I believe are held by the Government, and which are certainly held by the Highlands and Islands Development Board, that the money should be made available for development in a wider area throughout the Highlands?

Sir I. Gilmour

I cannot give an exact answer to the hon. Gentleman but will see that he gets one in very good time.

Mr. Torney

In view of the statements in the press today that the subsidised surplus of EEC butter is not now to be sent to the Soviet Union, will the right hon. Gentleman now tell us—or find out and inform the House at a later date—whether the British taxpayer will in future be subsidising butter to some other part of the world?

Sir I. Gilmour

The hon. Gentleman will realise that we in this country receive a considerable butter subsidy.

Mr. Shore

With regard to subsidised foodstuffs being sold to the Soviet Union, we understand, of course, the position concerning foodstuffs which are already in transit. That is not what is at issue. Will the right hon. Gentleman tell us in a little more detail what it is in the procedures of the management committees that makes it impossible for a clear decision to be reached in the Council of Ministers to stop forward sales or further sales of subsidised foodstuffs? If he is telling us that there are particular countries or particular officials representing particular countries who are holding it up, will he tell us exactly who they are? Let us know who are joining with us and who are not with us in this endeavour.

I should like also to refer to the question raised by my hon. Friend the Member for Aberdare (Mr. Evans), by my hon. Friend the Member for Blackburn (Mr. Straw) and by one of the Conservative Members concerning our contributions to the Community budget. The timing is important. If we are to believe what the Prime Minister said, it is part of the major decision to be made about the budget against the background of public expenditure—that is, as from the beginning of the next financial year. That was the whole purpose, presumably, of saying that it would be at Christmas in Dublin and not later. Now we are being delayed.

It is all very well for the right hon. Gentleman to say that matters such as budget contributions can be discussed in councils and forums other than those that he has listed. I fully understand that, but, as he well knows, the only forum in which it can be discussed, other than these forums, is the forum of the European Council. Unless Signor Cossiga has agreed in principle to holding a summit Council before the end of February, it will be too late.

I want an assurance from the right hon. Gentleman that if Signor Cossiga is unable to get the agreement of other European leaders to such a European Council, he will raise the matter in the Finance and Economic Council at its February meeting.

Sir. I. Gilmour

The management committees act according to the directives given by the Foreign Affairs Council. The right hon. Gentleman will be aware that at the Foreign Affairs Council earlier this month there was not a decision to cut off all exports to the Soviet Union. No doubt he will have read about it. That has nothing to do with officials. They act according to what was decided at that Council. There is no question of Signor Cossiga wanting or not wanting to have a Council. It is generally agreed, I think, by both Signor Cossiga and my right hon. Friend the Prime Minister that there is no point in having an early Council unless it is likely to be successful. It is up to him, therefore, to decide whether a convenient monent can be found at which it is likely to be successful. If he does not find it, it will be put off until the normal meeting of the European Council, But I can assure the right hon. Gentleman that negotiations and discussions will continue. I beg him not to concentrate his mind, uncharacteristically, on just these formal Councils. That is not necessarily the place, where all the most important negotiations take place.

Mr. Shore

Does it not mean that, unless some major agreement is reached within the next two or three weeks, the House and the country will face an additional £1,000 million of public expenditure, as no offsetting saving can be placed against the European budgetary account? This is a matter of the gravest importance.

Sir I. Gilmour

With great respect, as my right hon. Friend made clear yesterday, that is not true. If agreement is reached at the Council in Brussels on 31 March, that will have a very significant effect on our budgetary problem.

Mr. Jay

Does not the Minister realise that if the net deficit is reduced by increasing expenditure rather than by reducing our contribution there will be no assistance to the British budgetary problem, because the expenditure will be increased and not reduced?

Sir I. Gilmour

The great burden that is placed on this country, whereby we are by far the greatest net contributor to the budget, will be cured by increased expenditure in this country.