Foreign Affairs Council (Meeting)

HC Deb 24 March 1982 vol 20 cc933-8 3.32 pm

The Lord Privy Seal (Mr. Humphrey Atkins)

With permission, Mr. Speaker, I will make a statement on the Foreign Affairs Council which took place in Brussels on 22 and 23 March. My right hon. Friend the Secretary of State for Trade and I represented Her Majesty's Government on Monday and my right hon. and noble Friend the Foreign Secretary was our representative yesterday.

The Council decided that the Community should sign the sixth International Tin Agreement. It and member States agreed that they should make it clear at the time of signature that the agreement should not be used to facilitate or support the manipulation of the market.

Ministers examined the question of relations with Japan and endorsed the view that these relations remained a matter of serious concern. They agreed a comprehensive approach to these problems, which includes continued efforts to persuade Japan to modify its trade and economic policies, a renewed call for tangible assurances of effective moderation of Japanese exports in sensitive sectors; and agreement that the Community should initiate consultations with Japan about her low level of imports under the dispute settlement procedure of article XXIII of the GATT. I am arranging for a copy of the text of the Council conclusions to be placed in the Library of the House.

The Council finalised the text of the intergovernmental agreement setting up the European Foundation. Foreign Ministers of the member States will be asked to sign the agreement next week.

The negotiations for Spain's accession to the Community continued with a further meeting at ministerial level. I am glad to report that agreement was reached on almost all the outstanding points in six further areas of the negotiations. We have now had constructive meetings in the last few weeks with the Spanish and with the Portuguese and I very much hope that these will lead to more rapid progress being made in the negotiations with both countries.

During the Council the Greek Minister delivered to the Presidency a memorandum on Greece's future relations with the European Community, and announced Greece's intention to raise the matter at the European Council next week.

The whole of yesterday's Council was devoted to a detailed discussion of the 30 May mandate, and in particular the problem of Britain's budget contribution. The Presidents both of the commission and the Council put forward on a personal basis some new ideas on a method of dealing with the budget problem. These were greeted with real interest by Ministers of the member States, who agreed not to make any substantive comments at that meeting but to discuss them further at a special meeting of the Foreign Ministers to be held on Saturday 3 April.

Mr. Eric S. Heffer (Liverpool, Walton)

Is the Lord Privy Seal aware that his statements to the House, especially on issues such as the Budget, are quite amazing, as they never really tell us anything? It would be useful if, even at this late stage, the right hon. Gentleman could read into the record what was printed on the front page of The Times, because that newspaper seems to be much better informed on these matters than are hon. Members. Surely it is time that hon. Members had some idea of precisely what is being proposed in relation to the budget. The danger is that we shall end up with a shoddy deal which will again involve another retreat and possibly a sell-out by the Government.

Is the right hon. Gentleman aware that we have read in some newspapers that Mr. Brian Lenihan, the Irish Foreign Minister, said that Lord Carrington had accepted that there would be no linkage between farm prices and the budget? Is the right hon. Gentleman aware that we have also been told that the Foreign Secretary did not accept that? I, and I am sure the House, would like to know, because it would be wrong if there were agreement on the budget, resulting in a shoddy deal and, at the same time, an increase in the price of food at the farm gate, which would increase the price of food to British people in quite a big way.

Everyone will agree that the signing of the sixth International Tin Agreement is not something that one would wish to oppose, but can the Lord Privy Seal tell us whether that agreement will be helpful to the peoples of the countries involved, particularly the developing countries and not merely the big combines which obviously are involved?

Nor do I believe that anyone will oppose the European Foundation, but will it be turned into a purely propaganda foundation or machine for the benefit of the European Community rather than be the older type of Commonwealth foundation, which was much better and more helpful to the peoples of the Commonwealth? I do not have much to ask about the other points.

Mr. Atkins

The hon. Member for Liverpool, Walton (Mr. Heffer) has quoted from newspapers. Surely by now he knows better than to believe all that he reads in the newspapers. If he does not, he should.

The hon. Gentleman asked about a linkage between the agricultural price settlement and discussions relating to the budget. The mandate negotiations cover the three chapters of the mandate—the development of Community policies outside agriculture, the reform of the common agricultural policy and the budget. It has been accepted all along by all the Governments that the three chapters should be carried forward in parallel. The present discussions about agricultural policy and budget reform are going forward together and will continue in parallel, as everyone has agreed. They are linked in that way.

Mr. Dennis Skinner (Bolsover)

So they are linked.

Mr. Atkins

They are linked in that way. [HON. MEMBERS: "Ah".]

The hon. Member for Walton asked whether the tin agreement would be useful to third countries. I believe that it will, and so do they, as they have been urging us to sign the agreement, which we shall now do.

The hon. Gentleman also asked about the European Foundation. I remind him that the decision in principle to set up the foundation was taken in 1978 by the Labour Government, of which he was a member.

Mr. Skinner

He got the sack.

Mr. Atkins

The objectives of the foundation are to seek practical ways to improve mutual understanding among the peoples of the Community. I am sure that the improvement of mutual understanding between people anywhere is an objective to which the hon. Member for Walton would subscribe.

Mr. Peter Emery (Honiton)

Does my right hon. Friend agree that for many years Foreign Ministers at the Brussels meetings have expressed their concern about the trade and economic expansion of Japan and the restrictions on imports into Japan? Does he agree also that a stage must ultimately be reached when, if we cannot secure agreement to take positive action together as a Community, unilateral action should be taken by Britain?

Mr. Atkins

Yes, Sir, but the Community as a body is more powerful than this country alone. I believe that the right course of action is that which we have urged upon the Community—to take action under article XXIII of the General Agreement on Tariffs and Trade with a view to persuading Japan to liberalise her import policy and also her economic policy.

Dr. David Owen (Plymouth, Devonport)

Does the Lord Privy Seal agree that the time has come to set a deadline, as the discussions have gone on for many years and the import restrictions in Japan are highly damaging to trade? Does he accept that Japanese export penetration in certain key industries is now extremely damaging to many European countries?

On the question of the Budget, does the Lord Privy Seal accept that we support the Government's determination to secure a fair deal for Britain and their determination to link the budget contribution to reform of the common agricultural policy?

Mr. Atkins

I am grateful for the right hon. Gentleman's support on the last two matters. With regard to Japan, I believe that the Community's current move to use article XXIII of the GATT procedure is the most useful course of action that we can adopt. There is no set timetable for the procedure, but we intend to proceed as quickly as we can.

Mr. Skinner

Will the Lord Privy Seal tell us a little more about such mundane matters as whether he and his colleagues agree with his old friend Sir Henry Plumb, the leader of the Tory delegation at the European Assembly, that the 16 per cent. increase sought by the farmers in the price review should be accepted? Will he bear in mind that all along the line Conservative Ministers have told nurses and other workers in this country that they cannot have more than 4 per cent. or, in some cases, more than 6 per cent., when at the same time over in the Common Market the Government seem to be backing an inflationary increase to the tune of 16 per cent? Instead of coming to the House with a load of mumbo-jumbo, will the right hon. Gentleman tell us exactly what the Government are up to? That is his job. We know that he has not the ability to do it, as he showed in relation to Northern Ireland, but could he at least have a try?

Mr. Atkins

I am sure that the hon. Gentleman will seek an opportunity later today—whether he will get it is not a matter for me—to express his views on agricultural policy.

Several Hon. Members

rose—

Mr. Speaker

Order. I propose to call those hon. Members who have been rising in their places.

Mr. John Farr (Harborough)

Will my right hon. Friend assure the House that he is aware of the situation with regard to Spain's accession to the Community? Is he aware that several major domestic industries are likely to face insufferable competition when that comes about? Will he give an assurance that the longest possible transitional arrangement will be made and that he will urge that policy upon his colleagues in Europe?

Mr. Atkins

No, Sir, I cannot do precisely that, as there are certain areas in which a transitional derogation of Community rules for Spain would not be of advantage to this country. These are matters for detailed negotiation and discussion in a wide range of areas. We had such a discussion on six areas on Monday this week, and there are more to be covered. We all wish to make progress on this issue, but we wish to ensure that when Spain joins the Community she accedes to its practices and rules as quickly as is reasonably possible.

Mr. Russell Johnston (Inverness)

Did the Council have before it the decision of the European Parliament on 10 March to recommend a uniform electoral system for the 1984 elections to the European Parliament? When does the right hon. Gentleman expect the Council to consider that?

Mr. Atkins

The Council did not have that proposition before it at its last meeting. I do not yet have the agenda for the next meeting, but I take note of the hon. Gentleman's point.

Mr. Kenneth Lewis (Rutland and Stamford)

Is my right hon. Friend aware that every time he makes a statement of this kind it contains something about discussions with Japan? We seem to make no progress on this question. How many more businesses will fail in this country and in Europe as a result of import penetration—while the Japanese still refuse to allow imports into their country—before Britain or Europe takes action? Does my right hon. Friend agree that this has gone on for far too long?

Mr. Atkins

Yes, it has. That is why I am glad to tell the House that we are taking the action that I have described. It is necessary that we exert the maximum pressure on Japan to liberalise its trading policy, which is what we all want.

Mr. Douglas Jay (Battersea, North)

What will be the United Kingdom's net contribution to the EEC budget in 1982–83?

Mr. Atkins

As yet that is not determined, so I cannot give an answer, but the right hon. Gentleman will note that our contribution last year was £56 million.

Sir Anthony Meyer (Flint, West)

Does my right hon. Friend agree that the most important aspect of settling the budget issue is to secure a settlement that will extend well into the future, so that the Community can concentrate on doing what it should be doing—using its enormous bargaining power to secure a proper settlement of affairs with Japan?

Mr. Atkins

Yes, I agree that it is highly desirable for the Community to direct its attention to the really serious problems—not only trade with Japan, but unemployment and major structural, industrial and social problems. If, as I hope, we can achieve a settlement of our budget problems and a reform of the CAP, we shall be able to direct our attention to those serious and important matters.

Mr. Nigel Spearing (Newham, South)

Reverting to the subject of the European Foundation, does the Lord Privy Seal recall that in 1978, in a debate very late on a Friday afternoon, it emerged that the purpose of the foundation was to further "European Union"? Does he agree that such purposes are outside the remit of the Treaty of Rome? Will he therefore confirm that there will be a separate treaty for the basis of this so-called foundation? When will that treaty come before the House, and how much is Britain's contribution expected to be?

Mr. Atkins

It is not a question of a treaty. It is an inter-governmental agreement based on the principles that were approved by the House in 1978. The aims of the foundation are to seek practical ways to improve mutual understanding between the peoples of Europe, to promote a better understanding of the European cultural heritage, and to promote a greater understanding of European integration, from both inside and outside the Community. That is what was approved in 1978. If the agreement is signed next week, as I understand it will be, there will be a requirement for 4 million ecus over a period of three years, and we shall bear our share of that.

Mr. Tony Marlow (Northampton, North)

Can my right hon. Friend explain why, when we are providing a market for expensively produced European agricultural surpluses, without which market, instead of 100, 000 French peasants swarming around the streets of Paris there would probably be 1 million; why, when we are providing a market for surplus European manufactures, which in the last two months of last year was almost as much in terms of trade deficit in manufactures as in a whole year with Japan; why, when we provide security of supply in oil; why, when we all enjoy the dynamic benefits of European membership, we in this country pay one penny net into the European budget? Why is this done according to some obscure mathematical algebraic formula which very few people, let alone a senior wrangler at Cambridge, can understand?

Mr. Atkins

That has been the basis of our discussions during the past few months about our contribution to the budget. We have reached the position where our contributions are far in excess of our receipts. We have been discussing this matter with our European partners since May 1979. We achieved a useful result in May 1980, and I have no doubt that we shall achieve useful results in the coming spring.

Mr. David Myles (Banff)

On the subject of trade with Japan, does my right hon. Friend agree that it would be greatly to the benefit of us all, including Japan, if that country were to reduce its high import tariff on Scotch whisky?

Mr. Atkins

Yes, Sir. I agree with my hon. Friend. The tariff on Scotch whisky is much too high. Scotch whisky is preferred in Japan to Japanese whisky, for obvious reasons, but the tariffs, even though they have been reduced by a minimal amount, are too high. This is one matter on which we seek Japanese co-operation.

Mr. Richard Alexander (Newark)

My right hon. Friend's report was, as usual, quite fascinating, but will he say whether the Foreign Ministers discussed the Middle East? Do the Foreign Ministers consider that they have a role to play as honest brokers in what is undoubtedly an escalating and worrying situation on the West Bank?

Mr. Atkins

That matter was not on the agenda of the Foreign Affairs Council yesterday, or on Monday. However, I have no doubt that it will be discussed at the meeting of the European Council at the beginning of next week.