HC Deb 30 January 1985 vol 72 cc279-85 3.31 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 that met in Brussels on 28 and 29 January 1985. I represented the United Kingdom. Ministerial conferences with Spain and Portugal were held within the margins of the Council.

Ministers discussed outstanding points in the negotiations with both Spain and Portugal on agriculture, fisheries and social affairs. We remain determined to conclude the negotiations to allow the date of 1 January 1986 for Spanish and Portuguese accession to be met.

The Council discussed the financing of the 1985 budget and the text of the new own-resources decision. More detailed work will now be done. The Council will return to this subject in February.

The Council considered the new Canadian restrictions on Community beef exports. I urged others to work for a satisfactory negotiated outcome.

Ministers of the Ten, in political co-operation, issued a short statement regretting the failure of the New York high-level meeting on Cyprus and calling for the resumption of negotiations. Copies of the statement have been deposited in the Library of the House.

At an intergovernmental conference in the margins of the Council, Foreign Ministers appointed the Vice-Presidents of the new Commission.

Mr. George Robertson (Hamilton)

I thank the Foreign Secretary for making his statement so generously. It is important that the House has the chance to seek information on progress or, equally important, lack of progress made in these crucial meetings—all the more so since it seems that the failure of the Council means that the Community is yet again steering complacently towards paralysis.

Is it not true that the failure to make progress at the Foreign Affairs Council seriously endangers any chance of resolving the chronic and almost perpetual calendar of EEC financial crises? No progress was made on a new budget to replace the one rejected by the European Parliament; no progress is being made to resolve demands on the integrated Mediterranean programmes, which threatens a Greek veto on Spanish and Portuguese accession; no progress was made on the accession negotiations themselves, which must be completed urgently if they are to be ratified in 10 countries on time; as a consequence, no progress can be made on increasing own resources, which will be necessary to pay the Prime Minister's much trumpeted rebate.

Is not this sad and sorry mess proof positive of the emptiness of the fine words at Fontainebleau? Will the Foreign Secretary tell the House whether the new budget Commissioner, Henning Christopherson, did warn Foreign Ministers yesterday that agriculture expenditure will exceed income by over £1 billion—nearly 2 billion ecus? If so, precisely where will Britain's rebate now come from? Secondly, will the Foreign Secretary consider reducing our monthly payments to the EEC by one twelfth of our expected rebate, in the light of the accounting nightmare that is yet to come? Thirdly, when does the Foreign Secretary expect ratification of Spanish and Portuguese accession to be before this Parliament?

Will the Foreign Secretary give the elusive guarantee that the Minister of State, Foreign and Commonwealth Office failed to give during last week's debate, that no more special payments will be demanded of this House this year to fund the endemic inability of the Community to control farm spending?

Sir Geoffrey Howe

I must begin by congratulating the hon. Member for Hamilton (Mr. Robertson) on his accession to the position of principal spokesman on European Community affairs on the Opposition Front Bench. I encourage him to avoid the somewhat histrionic attempt at dramatisation which characterised his intervention this afternoon.

There was a routine meeting yesterday at which discussion took place on all the matters that I have identified. The suggestion that we are steering complacently towards paralysis, and all other fanciful language of that sort, is beside the point and remote from the truth. We discussed the matters that I have identified. We do not accept the warning of the new vice-president in charge of the budget of an overrun of the estimated expenditure on agriculture. We were not given any justification for the figures yesterday, and we shall want to challenge them and examine them most closely. It is worth reminding the hon. Gentleman that in 1984 the original Commission figure of 2.3 billion ecu was in the end reduced to 1 billion ecu.

It is universally acknowledged that provision must be made by the conclusion of discussions for the United Kingdom abatement to be made on the revenue side in accordance with the Fontainebleau conclusions.

As I said in my statement, we expect the accession and enlargement negotiations to be completed to enable ratification of enlargement to be presented and to take place on 1 January 1986.

As for any other matters being brought before the House, the object of the exercise is to secure a conclusion that will cover the overrun already established in the 1985 budget and to secure implementation of the Fontainebleau summit agreement on our own resources.

Mr. Eric Forth (Mid-Worcestershire)

Does my right hon. and learned Friend agree that, no matter how desirable he may consider the political aims of enlargement, there is nothing particularly magical about January 1986 and that it is much more important to get the negotiations correct than to conclude them early and on the wrong terms? The overriding importance is to get the negotiations right in terms of United Kingdom interests and those of existing Community members rather than to let in two new members on the wrong terms.

Sir Geoffrey Howe

I agree with the importance of the objectives that my hon. Friend has described. It is important also to seek to achieve them in accordance with the foreshadowed timetable. We shall seek to achieve both.

Dr. David Owen (Plymouth, Devonport)

Although the Foreign Secretary has spoken of a routine meeting, are we being led to believe that, with the unprecedented instability of oil prices and exchange markets, the Council did not discuss, at least on the margin, the problems that this presents to the Community of 10? What was the right hon. and learned Gentleman's attitude in any such discussion, especially as we are now producing 2.5 million barrels a day while Saudi Arabian production is down to 3.5 million barrels? The United Kingdom is therefore a significant factor in oil prices. Was the question of British membership of the exchange rate part of the EMS discussed, and, if not, why not?

Sir Geoffrey Howe

Neither of those questions was raised. It was a meeting neither of the Energy Council nor of the Finance Ministers' Council. We were addressing ourselves to the agenda before us.

Mr. Robin Maxwell-Hyslop (Tiverton)

Surely my right hon. and learned Friend is seized of the importance of not entering into a new and heavy financial commitment until he knows that the EEC is in a position to meet its existing financial commitments as well as the additional ones. Must this not control any putative date of enlarging the EEC if it cannot meet its existing financial commitments with its existing resources? Until that conundrum is resolved, how can we contemplate increasing the liabilities of the EEC?

Sir Geoffrey Howe

That is precisely why all these issues are being addressed together. We are covering the 1985 budget overrun, the completion of the enlargement negotiations and the establishment of the own resources position. These issues were discussed yesterday.

Mr. David Winnick (Walsall, North)

Did the Foreign Affairs Council discuss, or does it intend discussing, the question of having some celebration of the fortieth anniversary of the victory over Nazism and the liberation of Europe from Nazi tyranny? Is it intended to make a protest to the Austrian authorities over the way in which a senior Austrian Minister went out of his way personally to welcome back a notorious Nazi mass murderer who had just been released by the Italian authorities?

Sir Geoffrey Howe

I understand why the hon. Gentleman has some interest in that topic, but it was not one to which the Community addressed itself yesterday. Nor would it have been appropriate to have done so, it being a matter arising within the Government of a state which is not a member of the Community. The question of the commemoration of the conclusion of hostilities in Europe is being considered substantially as a matter for national Governments.

Sir Anthony Meyer (Clwyd, North-West)

In view of the proper concern that is being expressed by hon. Members on both sides of the House about the financial cost of the entry of Spain and Portugal to the Community, is it not more than ever essential to emphasise the paramount political importance of ensuring that those two countries, recently returned to democratic Government, are firmly anchored in the Western community?

Sir Geoffrey Howe

I agree with my hon. Friend.

Mr. Tom Clarke (Monklands, West)

Did the Foreign Affairs Council consider the important problem of famine in the sub-Sahara? If so, was it recalled that in September there was a promise that 250,000 tonnes of grain would be delivered, as against the reality of 13,000 tonnes delivered, despite the fact that the grain mountains are still growing?

Sir Geoffrey Howe

That was not discussed yesterday — [HON. MEMBERS: "Why not?"] — because the Community's conclusions about the supply of grain to meet the needs identified by the hon. Member for Monklands, West (Mr. Clarke) were agreed at the Dublin summit, on a commitment to supply 1.2 million tonnes of grain, and the substantial food aid commitments made by the Community in November are being delivered now.

Sir Dudley Smith (Warwickshire and Leamington)

My right hon. and learned Friend mentioned the vexed question of Cyprus. Will he encourage his European colleagues to put some moral pressure on the Greek Cypriots to negotiate more meaningfully with the Turkish Cypriots to try to reach a reasonable conclusion?

Sir Geoffrey Howe

In the course of the discussions yesterday, and in the course of the discussions I had last week with the Secretary-General of the United Nations, we made clear our expectation and hope that both sides would continue to negotiate with the utmost seriousness in the context of the initiative taken by the Secretary-General.

Mr. Nigel Spearing (Newham, South)

Was there a report before the Council of those states which had ratified the intergovernmental agreement which raised a loan for the EEC's 1984 budget? In the opinion of the Council, what article of the Treaty of Rome authorises the EEC to spend over its own resources, for 1984 or in any subsequent year when it needs to do so?

Sir Geoffrey Howe

There was no discussion of that subject in the Foreign Affairs Council yesterday. As the hon. Gentleman knows, the intergovernmental agreement has been before this House in relation to the position that arose last year.

Mr. Geraint Howells (Ceredigion and Pembroke, North)

I welcome the prospect of Spain and Portugal becoming full members of the Community. Does the right hon. and learned Gentleman agree, however, that the administrative costs of the EEC are increasing at a colossal rate? Is he aware that the expenditure by the intervention board for agricultural produce last year was more than £1,300 million? Does he and his colleagues have any plans to change the system, for better or for worse?

Sir Geoffrey Howe

It is important that every effort is made to reduce and control those costs, and that will, no doubt, be a question to which the new Commission will be addressing itself.

Mr. Nicholas Soames (Crawley)

Is my right hon. and learned Friend aware that many hon. Members believe that these meetings are extremely valuable and take great pleasure in the knowledge that the accession talks are going well? How long will the transition arrangements last for the fishing agreement in respect of Spain?

Sir Geoffrey Howe

I am grateful to my hon. Friend for his remarks about the value of these meetings. It is important to understand that, although they do not give rise to high drama, they are important. The discussion yesterday enabled substantial advantages to be made in securing agreement on all these questions.

As for the fisheries regime for Spain, the main issues are still under negotiation, and that concerns the length of the transition arrangement and its possible extension, in the event of no agreement being reached in the original period.

Mr. Norman Atkinson (Tottenham)

On the breakdown of the talks on Cyprus, how on earth can the Foreign Secretary or Mr. Pérez de Cuellar expect progress to be made if Mr. Denktash, the Turkish Cypriot representative, under instructions from General Evren of the Turkish Government, was not allowed to discuss the following issues: first, the withdrawal of Turkish troops from Cyprus; secondly, the free movement of Turkish Cypriots and Greek Cypriots; and, thirdly, the unification of a single currency? In those circumstances, will the Foreign Secretary make further representations to the Turkish Government to ensure that next time they meet there is an open agenda on the table allowing full discussion of those items?

Sir Geoffrey Howe

The hon. Gentleman is perfectly entitled to offer the House his view of the present state of the negotiations. His view contrasts with that offered by my hon. Friend the Member for Warwick and Leamington (Sir D. Smith). Both sides need to be urged to make every effort to bridge the gap between them. Before the last round of talks, the Secretary-General made an assessment that the gap between them had never been so narrow. I know that the hon. Member for Tottenham (Mr. Atkinson) attaches importance to closing the gap. I assure him that we shall continue to give every support and encouragement to the parties concerned, the other countries interested and the Secretary-General. I should not like to express a judgment about the two views that have been offered on both sides of the House.

Mr. Anthony Marlow (Northampton, North)

Will my right hon. and learned Friend explain to a puzzled public why when we joined the Community we had to pay through the nose for the privilege, whereas when the Spanish and Portuguese seek to join the Community the Community has to pay through the nose for the privilege?

Sir Geoffrey Howe

At the time we joined the Community we were subject to a substantial transitional period which was designed to meet our particular circumstances. There will be negotiations about the transitional arrangements for the two new countries applying for membership. The negotiations must take account of the relative poverty of those countries.

Mr. Allan Roberts (Bootle)

When the Foreign Secretary last reported what happened at a Foreign Affairs Council he claimed that arrangements had been made to ensure that, when Spain and Portugal joined the Common Market, an olive oil lake would not be created. The right hon. and learned Gentleman also gave assurances at that time that action would be taken to reduce the beef and butter mountains and the wine lake. Although I have recently enjoyed cheap butter from the EEC, I point out that the butter mountain has not been reduced significantly and the wine lake is still growing. How confident can we be that an olive oil lake will not be created when Spain and Portugal join the Common Market? Will the right hon. and learned Gentleman assure the House that if there is an olive oil lake it will not be mixed in with the wine lake?

Sir Geoffrey Howe

The hon. Gentleman is entirely correct to draw attention to the importance of maintaining strict discipline in the control of agricultural policy. For that reason, we are insisting upon a tight price regime for decisions in accordance with the financial guidelines that have been adopted and for the effective application of guaranteed thresholds to the commodities already covered by them. It is important that that regime should apply to olive oil as to other products.

Mrs. Ann Clwyd (Cynon Valley)

Although many of us welcome the accession date and hope that this time it will be adhered to, will the Foreign Secretary explain the budgetary arrangements for Portugal, which is one of the poorest countries? The Treaty of Rome mentions the need to reduce the gap between the rich and the poor. Will the right hon. and learned Gentleman assure us that Portugal will not be a net contributor and that the accession arrangements affecting the budget are satisfactory?

Sir Geoffrey Howe

The hon. Lady is correct in drawing attention to that matter as being important to Portugal. In that context I drew attention yesterday to the need for the Commission to bring forward proposals to deal with the own resources chapter of the enlargement negotiations.

Mr. Roland Boyes (Houghton and Washington)

Is the right hon. and learned Gentleman aware that my political friends in Portugal were very disappointed when the 1984 date for entry was not achieved and that, after 50 years of brutal dictatorship, they are anxious to join the Common Market and will be extremely distressed if the January 1986 date is not achieved? I welcome the Foreign Secretary's determination, but what are the specific issues involved and which countries are likely to cause a hold-up at this stage?

Sir Geoffrey Howe

Questions of some difficulty still remain, especially in relation to fisheries and some parts of the agriculture dossier. Establishing a fair balance of interests within the Community and with the applicant countries is bound to take some time, but I recognise the importance of what the hon. Gentleman says about Portugal's view of accession to the community.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

At a time of great and mounting crisis within the Community, the Foreign Secretary has given a picture of two days of total inaction. Is the right hon. and learned Gentleman aware that, as my hon. Friend the Member for Monklands, West (Mr. Clarke) has said, we consider it a disgrace that there was no discussion about aid to Ethiopia. The reality is quite different from the picture drawn by the Foreign Secretary. A written reply that I have received revealed that only 13,000 tonnes of grain have arrived in sub-Saharan Africa, whereas 1.2 million tonnes had been promised and there are now 12 million tonnes in store.

Will the right hon. and learned Gentleman admit that time is running out for a decision on the accession of Spain and Portugal and the consequent decision about increasing VAT and own resources, both of which have to be ratified independently by the 10 sovereign Parliaments, and the delay to which jeopardises our abatement? What contingency plans does the right hon. and learned Gentleman have for dealing with that?

Will the right hon. and learned Gentleman admit that the Government's policy on Europe now appears to be as big a shambles as their economic policy?

Sir Geoffrey Howe

I caution the hon. Gentleman against over-excitement about the alleged mounting crisis that he perceives. The Community is addressing itself to the business of completing the necessary instruments to cover the overrun on the budget this year, to provide for The own resources decision that is necessary to fulfil Fontainebleau and to complete the enlargement negotiations.

The hon. Gentleman is right to say that we must not allow time to run out. We are pressing ahead with the urgency that I consider necessary. The hon. Gentleman must not believe that, because I do not report to the House each month a series of either conflicts or dramatic conclusions, no progress is being made. Progress was made on the matters discussed yesterday, and that is a good thing.