HC Deb 03 February 1982 vol 17 cc305-10
The Lord Privy Seal (Mr. Humphrey Atkins)

With permission, I shall make a statement about the problem which has arisen because of the difference of view between the Council and the European Parliament on the adoption of the 1982 Community budget. When I reported to the House on 27 January about the meeting of the Council of Ministers on 26 January, I said that the Council had taken no final decisions on this matter. I can now report to the House that the Council has subsequently decided that it should institute proceedings before the European Court of Justice concerning this budget; that meanwhile member States will pay in full the sums resulting from the budget as adopted; and that the Council will open discussions with the Parliament and the Commission as soon as possible to resolve the problem.

We hope that these discussions will succeed. At the same time, we have to protect our legal position and ensure that, if an answer is not found by discussion, we shall have a ruling of the Court. By far the best way of doing this is through an action by the Council as a whole.

Some other member States were in fact willing to accept the budget as approved, and were reluctant to go to the Court. The Presidency therefore proposed, as a compromise, that the Council should take the matter to the -Court but that all members should pay their contributions on the basis of the budget as adopted. We accepted this.

Because, in our view, that part of the budget added by the Parliament after the second Budget Council on 24 November was not legally adopted, we cannot treat it, as we do the rest of the budget, as a direct charge on the Consolidated Fund on the basis of section 2(3) of the European Communities Act 1972. We shall, therefore, make a separate payment of our part of this extra sum—about£2.5 million a month. The authority of Parliament will be sought for this payment in a Supplementary Estimate for the current financial year and in a main Estimate for 1982–83. Meanwhile the payment will be met by means of repayable advances from the Contingencies Fund.

Once the issue has been resolved, preferably through discussions between the Community institutions, but, if not, through a judgment of the European Court, we shall know the amount which we are obliged to pay. We shall then either receive a repayment or be under a firm Community obligation to pay the full amount.

Mr. Eric S. Heffer (Liverpool, Walton)

Is the right hon. Gentleman aware that it can be argued rightly that the European Assembly—and I call it an assembly—has exceeded its powers by interpreting the non-compulsory expenditure on a wider basis than is generally accepted by the Council of Ministers? Is the right hon. Gentleman aware that that is a matter of principle?

While it is true that the extra budget agreed by the Assembly, beyond what the Council has agreed, would marginally benefit Britain, certainly in relation to the regional and social funds, that is outweighed in other directions and therefore it is right to resist the decision. Is the right hon. Gentleman aware that we believe that the Assembly's decision should be resisted?

We understand why the Government are in some difficulty in not wanting to go to the European Court on their own, but we regret that the Government were unable to persuade fellow EEC members to withhold payment until the Court had decided. Under the circumstances, is the right hon. Gentleman aware that we shall have to look very closely at the proposed payment and reserve our position? Possibly we shall want a debate on the whole question.

Mr. Atkins

I am grateful to the hon. Gentleman. I understand the position that he has outlined. Of course it will be possible to debate the matter when the Supplementary Estimate is laid before the House.

I agree that although in this case the amounts are not enormous, a matter of principle is involved. There could be far-reaching implications for the future unless the matter is settled. I agree that it would have been preferable if we had been able to persuade our Community partners to take part in a joint action by the Council and yet in the meantime withhold the extra payment. We believe that a joint approach by the Council would be more powerful than an individual approach by Britain. Therefore, we agreed to the course that I have outlined. I emphasise that it is of only a temporary nature. If the decision is that the Parliament acted illegally, the money will be repaid. That is guaranteed. If it acted legally there is a Community obligation which we would have had to fall in with in any case.

Mr. Jim Spicer (Dorset, West)

My right hon. Friend has made it clear that the problem is temporary. Can he give a rough estimate of how long it will be before the Court gives its opinion on the matter?

Mr. Atkins

No, Sir, I cannot. That is a matter not for the Government but for the European Court of Justice. Past experience shows that the European Court does not move all that quickly. Nevertheless, I hope that we can get the matter resolved by the summer.

Mr. Russell Johnston (Inverness)

Can the Minister remind the House on what items the European Parliament wished to increase Community expenditure? What was the British Government's view and was it reflected in the European Parliament by the speeches and votes of the members of the Conservative group there?

Mr. Atkins

As to the latter part of the question, the answer is "No, Sir." As to the former part of the question, we are having a dispute with the European Parliament about whether three of four items involve obligatory or non-obligatory expenditure. We believe that in those three of four areas they are obligatory and therefore that the European Parliament is acting incorrectly. This is a matter that can be resolved only by discussion between the Council and the Parliament or by the Court.

Mr. Douglas Jay (Battersea, North)

Can the Minister at least tell us what figure will be included in the United Kingdom budget estimates for 1982–83 as our total net contribution to the EEC budget in that period?

Mr. Atkins

I have explained that the amounts above those approved by the Council will be met by separate payment, for which we shall seek separate authority.

Mr. Michael Shaw (Scarborough)

Is my right hon. Friend aware that the action that is being taken by the Council is considerably more robust than the action taken hitherto by the Council on similar occasions—for example, in 1979? Is he further aware that, although it is desirable to have a firm ruling on the state of the treaty, the amounts involved on this occasion were so small that in the view of many it would have been better to reach agreement now and to seek the conciliation that has been sought for several years by the European Parliament round the table?

Mr. Atkins

Yes, Sir. The council has resolved to engage in discussion with the Parliament in the hope of solving the matter by agreement. If agreement is not forthcoming, we shall still regard the matter of principle as important enough to place the whole matter before the European Court of Justice. I am glad to say that our partners agree with that. Therefore, that course is being pursued in parallel with a course of discussion and conciliation.

Mr. Nigel Spearing (Newham, South)

Does the Lord Privy Seal recall that during the debates on the European Assembly Elections Bill, there were fears that the new Assembly would exert its power by extendng control over financial matters? Although those fears were pooh-poohed at the time, does the right hon. Gentleman agree that that is now happening?

Mr. Atkins

Yes, Sir. In certain respects the European Parliament has exceeded its powers and that is why we are placing the matter before the court.

Several Hon. Members

rose—

Mr. Speaker

Order. I propose to call those hon. Members who have been standing in their places, but not others.

Mr. Anthony Nelson (Chichester)

Will not my right hon. Friend agree that at least in principle an important guideline for the Government should be the views of the European Parliament which, after all, is a directly elected body? [Interruption.] Is there not something of a paradox in the attitude of the Opposition who, while recognising that the views of that Assembly of Parliament would be of advantage to Britain, nevertheless allow other matters of principle to outweigh that judgment? Is that not a triumph of dogmatism over national interest?

Mr. Atkins

Yes, Sir, and not for the first time. I am certain that Members of the European Parliament, who are directly elected, seek to do what they believe to be in the interests of their constituents, but they are constrained—as we are not—by legislation. The Government believe that it has gone beyond what the legislation allows. That is why we are going to the court for a determination.

Mr. Guy Barnett (Greenwich)

rose—

Mr. Speaker

I shall call Front Bench Members after the Back-Benchers.

Mr. David Stoddart (Swindon)

Is the right hon. Gentleman aware that many hon. Members—perhaps most—resent attempts by the European Assembly to filch powers that properly belong to the Council of Ministers, whose members—including the right hon. Gentleman—are responsible to their national Parliaments? If the Assembly continues to try to usurp the powers of this House will he come forward with a European Assembly (Repeal) Bill and withdraw our delegation?

Mr. Atkins

No, Sir, I shall not do that. However, we shall ensure, as far as we can, that the European Parliament acts only within the constraints laid on it.

Mr. Albert McQuarrie (Aberdeenshire, East)

My right hon. Friend knows of British farming's serious concern about the failure to agree the 1982 budget. Will he give an assurance that in further budget discussions, there will be no revaluation of the green pound, which would be detrimental to Britain's farming industry, especially in the light of the variations between sterling and the deutschmark?

Mr. Atkins

The matters in dispute between the Council of Ministers and the European Parliament do not include agricultural issues. Therefore, that point does not arise under the procedures that I have outlined.

Mr. Bob Cryer (Keighley)

Is this not an example of lickspittle subordination to the Common Market? If legislation is needed for the supplementary payments, is it not illegal for the Government to make them in advance of legislation approved by the House? Is there not a marked contrast between the way in which the Government are apparently prepared to go to any lengths to meet the supplementary payments, and their attitude towards local councils which want to make a supplementary payment to maintain decent services that are crucial to the people of those local authority areas? The Government then produce anti-local government legislation.

Mr. Atkins

No, Sir. There is nothing illegal in what the Government propose. In the first instance, the money will be found from the Contingencies Fund by a repayable advance and parliamentary authority will be sought in the manner that I have described.

By this agreement we have ensured that the whole council—all member Governments—are joining together in an action before the European Court where the legality of the European Parliament's decision can be tested.

Mr. Robin Squire (Hornchurch)

Does my right hon. Friend consider that a factor in some of our colleagues' attitudes to budgetary payments is Britain's outstanding financial success in the past year on payments to the EEC, which have been less than half of 1 per cent. of total expenditure.

Mr. Atkins

Yes, Sir. There is no doubt that that fact rankles considerably on the Benches opposite.

Mr. Dennis Skinner (Bolsover)

Following the remarks of my hon. Friend the Member for Keighley (Mr. Cryer), is it not a scandal that while the Government tell local authorities to slash spending on education, the mentally handicapped, social services for the old, and to force up council house rents for 5 million tenants, local authorities that suggest that they should spend a bit more money to look after them are told by the Government arid the Secretary of State for the Environment that they cannot spend it? Yet, when it is the Common Market, the Government can say "It is only a few extra million quid" in their retrospective legislation. I can tell my right hon. Friend—

Mr. Speaker

Order. I propose that the hon. Gentleman tells him afterwards.

Mr. Atkins

Once again, it is clear that the hon. Gentleman has not been listening, because the payments do not involve any extra expenditure for the Government. They are interim payments which we shall either find we are obliged to make or, alternatively, that we wi.1 have repaid. That is a different matter from the hon. Gentleman's description. It will be determined whether we are legally obliged to pay or not. If we are not, we shall get the money back.

Mr. Tony Marlow (Northampton, North)

Will my right hon. Friend take this opportunity to clarify to the few remaining Euro-fanatics the fact that the British people have but one Parliament and that that is this House, and make it plain that the claret-swilling travelling circus on the other side of the Channel, which has no legislative powers, is purely an Assembly and that he does not intend that it should become anything more than that.

Mr. Atkins

Nevertheless, it is an Assembly with certain powers and we are discussing whether it has exceeded them.

Mr. Thomas Torney (Bradford, South)

In the Minister's negotiations on the Budget, has he taken cognisance of the discrepancies reported by the court of auditors of the EEC about some millions of pounds in the Common Market Commission? Further, has he taken into account the £10 million fraud, from the findings of the same auditors, by European farmers using loopholes in EEC regulations? What will the Government do about that and will they take it into account when there are any further discussions on the Budget, in the European Court, or whatever?

Mr. Atkins

Yes, Sir. Of course these matters will be taken into account and we shall ensure that financial probity is observed, but I am not talking about that matter now. The proceedings I have described to the House relate to a dispute between the European Parliament and the Council of Ministers. That matter is before us and I have described what we shall do on that front. I should be happy to answer questions raised by the hon. Gentleman at another time.

Mr. Alex Pollock (Moray and Nairn)

Following the answer given to my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), is the Minister aware that the reported remarks of my noble Friend the Secretary of State for Foreign and Commonwealth Affairs, to the effect that he is prepared to block CAP decisions until the overall contribution from Britain is resolved, have caused great concern to the farmers in my constituency? Is the right hon. Gentleman aware that any further delay in announcing the European agricultural price review can only cause great financial hardship in those quarters?

Mr. Atkins

I note what my hon. Friend says, but it does not arise out of my statement.

Mr. Guy Barnett

As it is clear that it is the Government's view that that part of the budget which was added by the Assembly was not legally adopted and, therefore, does not fall within moneys which can be taken from the Consolidated Fund under the European Communities Act which requires the authority of this House, what action will the Government take if this House refuses to give that authority?

Mr. Atkins

Then we shall have to reduce our payments, but we shall have to see what the House does.

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