HC Deb 07 December 1983 vol 50 cc314-6
53. Mr. Stuart Holland

asked the Secretary of State for Foreign and Commonwealth Affairs under what circumstances Her Majesty's Government would now consider an increase in own resources of the European Community.

Sir Geoffrey Howe

The conditions in which Her Majesty's Government would consider an increase in own resources are unchanged since my right hon. Friend the Prime Minister spelt them out at the European Council in Stuttgart in June. Before any increase can be considered there must be effective control of agricultural and other expenditure and an arrangement to ensure a fair sharing of the Community's financial burden. That was our position in Athens and it remains our position.

Mr. Holland

Will the Secretary of State say whether any of the Athens discussions considered the aid and development budget of the Community and the importance of safeguarding it against predations from the common agricultural policy? Did he take the opportunity provided by the summit to raise the interests of those Commonwealth countries excluded from the ACP and Lomé agreements, such as India, or when in Athens did he simply forget the priorities and agenda of the New Delhi summit?

Sir Geoffrey Howe

There was no specific discussion of the aid and development budget. One would not have expected that in the circumstances of the negotiations. I can assure the hon. Gentleman and the House that we were not unmindful of the relationships and obligations between Britain and other European countries and the Third world. One of the matters on which we were most insistent—I give this as an example — was our objection to the proposed tax on fats and oils. We argued that that would be harmful to the relationship between the Community and industrial countries, and certainly with Third world countries.

Mr. Marlow

In view of the problems at Athens yesterday, would it not be sensible to concentrate on one thing at a time and to delay further discussion of the entry of Spain and Portugal into the Community until we have sorted out the very real problems of the United Kingdom's budgetary contribution and the common agricultural policy? Would not this have the additional advantage that for the time being, if we are to sort out the common agricultural policy, we shall not need an increase in own resources?

Sir Geoffrey Howe

The way in which these matters are discussed and the order in which they are discussed will be a matter for consideration in the light of the failure to reach agreement in Athens yesterday. Question No. 56 relates to the entry of Spain and Portugal.

Mr. Robin Cook

Does the right hon. and learned Gentleman appreciate the rather surreal aspect to these exchanges in the wake of the failure at Athens, where the Government failed to get any of the conditions that they set out for an increase in own resources? Will he confirm that the proposed modulation of VAT that was discussed at Athens would not meet the British position on budgetary contributions as it would leave untouched customs levies and agricultural import levies, which are the real source of British disadvantage under the budget? Why does he not tell the House that in the present circumstances there is no prospect of Parliament being asked to increase the levies paid by the British people to finance expenditure on agriculture, which the Community has all too self-evidently no real intention of reforming?

Sir Geoffrey Howe

The conclusions of the summit in the past two days are a disappointment to the Government and they should be disappointing to us all. It is crucial for the Community to resolve the questions that are on the agenda. It is wrong of the hon. Gentleman to summarise the conclusions of the two days by saying that the Government failed to establish their position. Our position was crystal clear throughout the negotiations. We wanted the Community to resolve these matters and we believe that it is important that that should remain our position.

There are two different aspects to the modulation of value added tax. It is possible to design a method that will produce adequate relief for our budgetary contribution that operates solely by abatement of the contributions on the VAT side. It is possible to do that, and modulation of value added tax can take various forms in achieving that. It would be wrong for the House to conclude that it is necessary to prepare to accept, as the hon. Gentleman suggests, that there is no prospect of the resolution of these important questions. They must be resolved as soon as possible. It does not lie solely within the power of the Government to achieve the solutions to them.

It is high time that the hon. Gentleman recognised the importance of our making headway on these matters and recognised above all that her Majesty's Government's position is a clear determination to find answers to the problems. He should come to that recognition instead of sitting back and expressing some pleasure at the absence of progress.

Mr. Robin Cook

rose——

Mr. Speaker

Order. There are many more Questions on the Order Paper.