HC Deb 11 April 1984 vol 58 cc387-92 3.45 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe)

With permission, Mr. Speaker, I should like to make a statement about the Foreign Affairs Council which I attended in Luxembourg on 9 and 10 April. I was accompanied by my right hon. Friend the Minister for Trade.

The Council had a brief discussion on follow-up to the European Council. It was agreed that further work on the text on control of Community expenditure, on which provisional agreement was reached at the European Council, should be remitted to the Council of Finance Ministers. On budgetary imbalances, I made clear our determination to work for a satisfactory agreement. There was, however, no substantive discussion, and no agreement was reached on this occasion. Until agreement is reached on an equitable solution, there can be no question of agreement on our part to an increase in the own resources ceiling.

The President of the Commission made a statement on the financial situation in the Community in which he said that expenditure in the current financial year was expected to exceed the budget provision by about 2.5 billion ecu. The United Kingdom's position on this issue was made clear by my right hon. Friend the Minister of Agriculture in the Agriculture Council on 31 March, and by a formal entry in the minutes of that Council.

The Council resolved the main outstanding difficulties on the proposed common commercial policy regulation. It was agreed that the regulation, along with a package of 15 measures providing common Community safety and technical standards for industrial products, should, be formally adopted, subject, in our case, to a parliamentary scrutiny reserve on two of the directives.

In company with other member states and the Commission, we strongly urged Ireland to withdraw its objection to the conclusion of a further five-year agreement on imports of New Zealand butter to the Community.

There was a discussion in preparation for the forthcoming ministerial meeting on the Lomé convention.

A successful joint meeting with Ministers from the member countries of the European Free Trade Association was held on 9 April, following the establishment on 1 January 1984 of full free trade in industrial goods between the Community and the countries of EFTA.

A co-operation Council with Egypt was held to consider progress and prospects in economic, technical and financial co-operation.

At the ministerial conference with Spain, agreement was reached on some aspects of external relations, and on the issue of patents.

Ministers of the Ten also agreed a statement on recent events in Chile. I am arranging for a copy of this to be placed in the Library of the House. We also discussed the export of certain chemicals to Iran/Iraq in the light of the United Nations Secretary-General's report on the use of chemical weapons in the Iran-Iraq war.

Mr. Robin Cook (Livingston)

The Foreign Secretary will be aware that this is the third such statement that he has made in five weeks, and he must be aware that there is a certain weary familiarity about his report that there has been another failure to agree. Is not the sum of his statement that, in the two Council meetings since the summit, he has achieved no progress whatsoever on the British demands? The Foreign Secretary admitted—I think he will agree that he admitted—that the Community has failed to achieve effective control of its expenditure, and that this year it will be overspent by 2.5 million ecu.

The Foreign Secretary said that the Government had made their position clear in the Agriculture Council. Could I ask the Foreign Secretary to make the Government's position clear in the House? Where is that money to be found from, and can we have his assurance that the Government will not tolerate a raid on the regional and social funds to pay for their failure to achieve effective control of agricultural expenditure?

On the issue of budget imbalances, the Foreign Secretary said that there was a brief discussion. The Foreign Secretary may be aware that this is a matter of some discrepancy in the national newspapers. The Financial Times says that the discussion lasted for 20 minutes, the Daily Telegraph says that it lasted for 40 minutes, and The Guardian says that it lasted for one hour. Can the Foreign Secretary clarify for just how many minutes he managed to focus the minds of his colleagues on the British budget imbalance?

Whichever is the correct figure, will not the right hon. and learned Gentleman admit that the reality is that this time he could persuade them to deal only perfunctorily with the issue which the Government have elevated to the centre of their negotiations? If the Government do not wish that issue to be dealt with perfunctorily, why did the Prime Minister refuse to see the President of the Community when he was in Britain on Monday, because she was too busy preparing for an interview with Sir Robin Day? Did the Foreign Secretary, as Britain's senior diplomat—if I may be forgiven a hyperbole—find it helpful to hear the Prime Minister on television describe the other nine Prime Ministers of Europe as "tiresome"?

Will the Foreign Secretary accept that the most remarkable part of his statement is the omission of any reference to the 1983 rebate? What is his current estimate of when that rebate will be paid? Does he expect it to be paid by the anniversary of the summit at Stuttgart last June, when it was agreed to? I remind him that he promised that if it was not paid by the deadline of 31 March, he would safeguard the British position. In view of the Foreign Secretary's latest failure, what will he do to safeguard the British position?

Is not the truth that one of the reasons for the right hon. and learned Gentleman's weakness at the negotiations is that, having huffed and puffed about withholding before 31 March, he was seen to back down the moment his bluff was called? Why does he not bring forward a measure to withhold from our 1984 contribution the 1983 rebate which his negotiations have failed to secure for us?

Sir Geoffrey Howe

The answer to the hon. Gentleman is that, despite the quality and style of his running commentary, we are conducting the negotiations with a view to securing a successful conclusion of the negotiations — [HON. MEMBERS: "When?"]—on the substantive issues and at the time when we reach agreement on those issues. It is for that reason that our attitude towards the so-called withholding question has been as I have described.

It is perfectly right that in the discussions on Monday we were not able to advance those negotiations further on that issue. The discussion took place for something like the middle time of those suggested by the hon. Gentleman. The answer to the point that he raised about the overspending that is taking place on this year's budget is as recorded by my right hon. Friend the Minister of Agriculture in the minutes of the Agriculture Council. In our view, expenditure on the common agricultural policy in 1984 must be accommodated within the existing Budgetary provisions. If budgetary problems arise later in the year or in 1985, the United Kingdom considers that the Commission and/or the Council (acting on a proposal from the Commission) should take necessary steps to reduce expenditure to the permitted level. In fact, the negotiations have been going on through a series of stages and one cannot expect to make progress at each point.

The one thing that is absolutely plain is that the United Kingdom has made very clear, and continues to make clear, our continued willingness to work to bridge the remaining gap, on terms that we can commend to the House.

Mr. Ivor Stanbrook (Orpington)

On the question of the progress of the Spanish application to join the Community, did my right hon. and learned Friend make it clear that that country cannot expect any further progress while it maintains its present spiteful blockade of Gibraltar?

Sir Geoffrey Howe

It has been made very clear that the restrictions on movement that exist between Spain and Gibraltar are incompatible with the obligations that Spain will assume as a member of the Community. Agreement has been reached between the Community and Spain and, in the context of the external relations part of those negotiations, the application of Community obligations means that, from accession, the elimination of all obstacles to trade between Spain and Gibraltar, except as permitted by exceptions and derogations in accordance with general Community law, will take place.

Dame Judith Hart (Clydesdale)

Will the Foreign Secretary amplify just a little the decision that was reached on Chile? I know that he is putting the relevant papers in the Library, but it would be helpful to know whether there was a strong condemnation of the recent further abuses of human rights in Chile. Did he have any opportunity of discussing with Claude Cheysson, the French Foreign Minister, either in the Council of Ministers or outside it, the mining of ports in Nicaragua and the assertion by the United States of America that it will take no notice of any ruling on that by the International Court of Justice? In that regard, has he seen early-day motion 699 which was tabled last night, and which asks the Government to take intitiatives on that issue in the Council of Ministers?

Sir Geoffrey Howe

I believe that the statement of the United States of America about its view of the International Court of Justice had not been made known when we held our discussion about that issue on Monday. I shall, of course, study the terms of that early-day motion, as the subject was discussed between us and may need to be discussed again. I have arranged for the statement and declaration on Chile to be placed in the Library. It makes plain our wish to see an early restoration of civil liberties, the formation of a Government based on free elections, and our disturbance about the incidents that took place on the eighth day of protest, some days ago. We are fully associated with the statement in the Library.

Sir Anthony Meyer (Clwyd, North-West)

Is my right hon. and learned Friend aware that there will be general satisfaction at the conclusion of the arrangements for free trade with EFTA? Does that not make nonsense of the claim that one of the drawbacks of belonging to the EEC is that we are flooded with free trade goods from the rest of Europe?

Mr. Robin Cook

We were in EFTA before the EEC.

Sir Geoffrey Howe

My hon. Friend has nevertheless made an important point. With effect from the beginning of this year free trade in industrial goods has been established between EC and EFTA countries, which is an important enlargement of the concept of free trade.

Mr. Russell Johnston (Inverness, Nairn and Lochaber)

The Foreign Secretary has made it clear that, in the negotiations, he wants to bridge the gap and reach a fair compromise. Does he define that as the Prime Minister did on television, when on 9 April she said: I go for agreement—agreement for the things I want to do; consensus behind my convictions. If that is the basis of the negotiations, and if everybody adopts that view, how does the right hon. and learned Gentleman ever expect a settlement to be achieved?

Sir Geoffrey Howe

The hon. Gentleman has quoted a sentence used by my right hon. Friend the Prime Minister in a much wider and quite different context. In the negotiations, we have been working throughout, and will continue to work, towards bridging the gap in order to reach a conclusion that we can commend to the House and that we can regard as satisfactory to the Community as a whole.

Mr. Bowen Wells (Hertford and Stortford)

Is my right hon. and learned Friend aware of the admiration felt by Conservative Members for the patient way in which he has dealt with the long-term negotiations on the very difficult issues facing him? Is not a respite from the persistent British pursuit of a budget alteration probably wise in the circumstances? What timetable does my right hon. and learned Friend expect to follow if we are to achieve a satisfactory settlement of the budget issue at the next Heads of Government meeting?

Sir Geoffrey Howe

I am grateful to my hon. Friend for what he has said about the general conduct of the negotiations. It is important that we should maintain a combination of firmness and willingness to discuss reasonably. That is what we have been doing throughout the negotiations. I cannot tell my hon. Friend the precise pattern that negotiations will take from now on, because in the course of such discussions openings may sometimes appear either as a result of bilateral discussions or in other ways. I repeat, however, that the United Kingdom is anxious and determined to bring those negotiations to an honourable and satisfactory conclusion as soon as possible.

Mr. Rowland Boyes (Houghton and Washington)

Will the Foreign Secretary comment on reports that, because of his recent discussions, the regional and social funds will be plundered to pay for the agreement that he is trying to reach? Does he understand that the British people will interpret that as a further attack on the unemployed and the poor, as we benefit disproportionately from those funds? Incidentally, have the words "unemployment" and "poverty" been withdrawn these days from Euro-speak by some Commission document? The right hon. and learned Gentleman never bothers to mention them at all.

Sir Geoffrey Howe

The hon. Gentleman must know that all the Government's policies and most of the discussions in the Community are directed towards promoting more rapid economic recovery in the Community, including more rapid headway against unemployment. Bearing on that point, one of the most important features is the commitment that has been arrived at in the context of budgetary control to ensure that agricultural spending takes a decrease as a proportion of the Community budget. That is the best foundation for the expansion of policies in which the hon. Gentleman is interested.

Mr. Michael Fallon (Darlington)

Is my right hon. and learned Friend aware that the common commercial policy agreement will be widely welcomed by British industry? The Government are to be congratulated on their lead. Will he bear in mind the fact that completion of a free internal market depends upon a simplification of frontier formalities hand in hand with the adoption of the technical directive to which my right hon. and learned Friend referred?

Sir Geoffrey Howe

I am grateful to my hon. Friend for making those points. The achievement of the agreement on the common commercial policy and the article 100 directive for standardisation of a number of important industrial products represent an important enlargement of export opportunities in the Community for British industries. I entirely agree with my hon. Friend about the importance of diminishing frontier formalities. That was another of the policies to which we attached importance in our new policies paper. It is another of the policies on which there was agreement at the Brussels summit and to which we shall continue to give urgent attention.

Mr. Gerald Bermingham (St. Helens, South)

As the Foreign Secretary is not prepared to say when he expects the rebates to be paid, will he undertake to tell our partners in Europe that, if this money is not repaid by, say, July this year, the British Government will take further steps? Will the right hon. and learned Gentleman tell our partners in passing that we expect interest on our outstanding money as and when it is repaid?

Sir Geoffrey Howe

The repayment of our refund would normally have been payable, in accordance with habit and custom, by the end of March. That is set out in the provisions recorded in the Council's minute of 27 October 1980. That is not the same as a legal requirement. We do not doubt that the money will be paid in due course, and we are determined to achieve that.

Mr. Tony Marlow (Northampton, North)

Is my right hon. and learned Friend aware that some uncharitable people around are saying that the agricultural settlement, such as it is, is not an act of courage but has been forced upon the Community by the ceiling on own resources and that if anyone were to suggest that that ceiling should be increased—whatever the transparent fig leaves in which the members of the Council of Ministers might wish to clothe themselves—the reality would be that agricultural expenditure would take a large slice of that increase in resources? That is a seductive line of reasoning. Perhaps my right hon. and learned Friend would like to disprove that matter now.

Sir Geoffrey Howe

There is no doubt that the growing or threatened overspend on agricultural policies is one of the reasons that helped to concentrate attention on the need for reform of the operations of the agricultural policy. That must be set alongside the fact that we have now achieved agreement on including in the Community's budgetary procedures specific guidelines requiring growth on agricultural spending to occur at a lower rate than the growth of own resources. That agreement requires Community expenditure to be determined at the beginning of the budgetary year and steps to be taken to guarantee the implementation of those provisions in the Community's procedures. It is of the utmost importance that that should be done in response to the points raised by my hon. Friend.

Mr. Ron Leighton (Newham, North-East)

Does the Foreign Secretary accept that most hon. Members are not in the least surprised that there has been a further predictable failure? Does he accept that that failure underlines the fundamental incompatibility of the United Kingdom and the present EEC? Does he agree that this aspect underlines the need not to increase the VAT share of own resources? No case can be made for increasing that VAT share.

Sir Geoffrey Howe

I understand why the hon. Gentleman chooses to see the matter in that way. The great majority of hon. Members recognise the importance of the United Kingdom's continued membership of the European Community. They recognise also the importance of the changes being undertaken in these negotiations. It is not surprising that those changes should take some time. It is important that they are achieved, and that is our objective.

Several Hon. Members


Mr. Speaker

Order. An important Second Reading, a ten-minute rule Bill and points of order are to follow these questions.