European Communities (Amendment) Bill

HC Deb 10 July 1986 vol 101 cc543-72

Mr. Deakins

I beg to move amendment No. 14, in clause 1, page 1, line 13, after `Communities)', insert 'but not Article 10 thereor.

The amendment deals with the increased powers to be conferred on the Commission by the Council. It deals with article 10 of the Single European Act and relates to an amendment to article 145 of the treaty of Rome. The important point about article 10 is that it imposes a duty on the Council to confer extra powers on the Commission which are not at present mentioned in article 145 of the basic treaty.

The Commission's powers are at present laid down in articles 155 to 162 of the treaty of Rome. I draw the Committee's attention particularly to articles 155 and 162 which make it perfectly clear that the Commission is basically a bureaucratic body — I do not say that pejoratively—which is the servant of the Council but nevertheless has rights and can take initiatives to put proposals to the Council on any matters arising from the treaties.

If that were all I knew about the Commission, perhaps I would not be moving the amendment tonight. In 1985 the Commission started getting rather big for its boots. The House will recall that at the time of the agricultural price review the West German Government imposed a veto under the Luxembourg compromise on a fall in cereal prices. The outcome—I use the words of the Minister's predecessor—was as follows: The Commission has said that in the absence of an agreement on cereal prices it is taking certain administrative actions on the basis of a 1.8 per cent. reduction in cereal prices. Those proposals could be changed if a decision is reached by the Council of Ministers on a different level of reduction." — [Official Report, 20 June 1985; Vol. 81, c. 467.] The important point is that the Commission, the servant of the Council, was arrogating to itself, for the first time since 1957, the power to overrule a national veto in the Council of Ministers. It did overrule that veto and there was not a peep out of any of the national Governments, including our own. In my opinion, it exercised that power illegally and, had the British Government had the guts to take the Commission to the European Court, I am fairly certain that the European Court would have ruled against the Commission overturning that Council decision because, if the Council fails to reach a decision the previous year's prices should have applied.

There are those in the European Community—I refer especially to the Dooge committee — who wish to increase the powers of the Commission. That was one of the recommendations in the Dooge committee report last year. Reservation was, of course, expressed on behalf of the British Government, but I wish to prove to the Committee that there are moves in Europe and in the Commission to give the Commission a much more executive power than at present. The new article 10 in the Single European Act will be doing that very thing.

I call in aid the House of Lords. In its important report on European union, HL 149, which was the 12th report of 1985–86 from its Committee on the European Communities, it states in paragraph 10 under the heading "Delegation to the Commission": There is an express provision (Article 10) for delegating to the Commission powers to implement policies settled by the Council". It goes on to say in paragraph 16: The powers of the Commission in relation to the drafting of legislation are already significant and will become more so. It went on to explain why they would become "more so". The additional power under article 145 of the treaty of Rome, as amended by article 10 of the Single European Act, will confer more powers on the Commission. Should we not be concerned about that because the role and constitution of the Commission are already laid down in the treaty and, as I have already said and I hope proved to the Committee, it is already trying to exceed those powers? Here is the Council, and possibly the House, seeking to give extra powers to the Commission.

Sir Russell Johnston (Inverness, Nairn and Lochaber)

Does the hon. Gentleman not think that the fact that the Commission is of mixed nationality and of mixed political opinion and is extremely transparent in the examination of any proposals means that it is not a body to fear in these times and it is certainly to be feared much less than some of the bureacracies in our nation states?

Mr. Deakins

I do not think that the hon. Gentleman would expect me to agree with that. We are in total opposition on these matters. His view of the progress in the European Community differs from mine. I am not sure what his views are on federalism and a single European Government, which is the alternative to federalism. Additional power for the Commission is one of the mechanisms which will be used by the federalists in the Community.

Even our own Government have some doubts about what is involved, although they have agreed the Single European Act and are bringing this provision before us tonight. In the explanatory memorandum published by the Foreign Office earlier this year under the heading "Policy Implications" it states in paragraph 8: If the Commission's proposal were adopted as drafted it would mean that, where the Council confers implementing powers on the Commission, the Commission would be operating within a range of implementing rules"— I emphasise the next words which would give it potentially greater responsibility than at present. It is very important for the Committee to note that.

The Commission is a federal type body. It is federalist in everything that it seeks to do along with the other institutions of the European Community other than the Council of Ministers. We are giving it more power in other parts of the Single European Act to work with the Assembly to overturn or influence much more than in the past legislative decisions by the Council of Ministers under the new co-operation procedure. Therefore, it is ill-advised for the Committee, the House and the Government to agree to give it extra powers as suggested in the article.

Mr. Marlow

I shall be incredibly brief.

Article 10 says that the Council of Ministers can confer on the Commission … powers for the implementation of the rules which the Council lays down. If the Council wished to at a later stage, would it be able to withdraw those powers from the Commission?

Mrs. Chalker

In this short debate, the hon. Member for Walthamstow (Mr. Deakins) has made several interesting points, but he has misunderstood the management powers of the Commission, to which I shall refer. First, let me lay down the general principles.

In deciding Community legislation, the Council lays down a policy framework, and in most cases the manner in which the legislation is to be implemented by the Commission. What has always happened is that implementing powers are delegated to the Commission so that the Community functions under the guidance of the Council, but more efficiently. The Council could not possibly take every routine, day-to-day management decision or the very detailed decisions on technical matters. For that there must be technical advice.

Therefore, the Council has conferred implementing powers on the Commission in areas such as Customs administration, agriculture management, and the adaptation of standards to accommodate technical progress. In each case that is subject to the safeguard that the Commission has to consult a specialised committee of national experts on each of the measures that it wants to take, so that decisions of general importance and contentious issues are always referred back to the Council. That is where the hon. Member for Walthamstow became concerned about what he said had happened in 1985, regarding the Commission's management powers, in this case, in agriculture.

What happened was not that the Commission exercised an illegal power to overturn a Council decision. The Council was not able to agree on a price reduction for cereals. There was not a price reduction because it could not agree. The Commission made use of its management responsibilities—which it had already been given by the Council of Ministers — over its arrangements for intervention, so that the quantities of cereals being sold into intervention were controlled. Therefore, savings were achieved that I should have thought that the House would welcome. They counterbalanced the price reduction that had not been secured—or at least they did so in part.

The management powers that are conferred on the Commission by the Council of Ministers carry on as they were already under the treaty of Rome. I can assure the hon. Gentleman that the Commission's powers in that area are not changed by the Single European Act. What has happened up to now, and what will no doubt have been clear to some hon. Members—

It being one hour after commencement of proceedings on the motion, THE SECOND DEPUTY CHAIRMANproceeded, pursuant to the Order [1 July], to put forthwith the Question already proposed from the Chair.

Amendment negatived.

Mr. Teddy Taylor

I beg to move amendment No. 47, in page I, line 13, after `Communities)', insert 'but not Article 130D in Article 23 thereof' I appeal to the Minister to accept the amendment. I am sure that, on reflection, she would agree that it would improve the EEC. Article 130D calls on the Commission to produce comprehensive proposals to amend structurally the rules and operation of the agricultural funds, the social funds, the regional funds and the guarantee funds in such a way as to make them more conducive to helping the various disparities between regions and the backwardness of the least favoured regions.

10.15 pm

In short, under the article, we are telling the Commission to concentrate on changing all the rules of all the funds within one year and that the Council must agree. I hope that the Minister will accept that, instead of the Commission spending time doing that, it should concentrate on bringing forward reforms to the basic structure of the common agricultural policy. We all know that the common agricultural policy is undoubtedly the EEC's greatest failure. About 70 per cent. of total Common Market spending is devoted to agriculture. Over 50 per cent. of every penny spent by the Common Market is devoted to the storage and disposal of surpluses.

Last Thursday, I was told by the Minister of State, Ministry of Agriculture, Fisheries and Food, that over the past 12 months the Common Market has spent £7,300 million on the storage, dumping and destruction of food. That is a huge amount. There are clear signs that the figure will rise sharply as a result of the decisions made by the Council of Ministers and by the European Assembly today. It will rise because nothing has been done to reduce surpluses, except the milk quotas which simply gave cash to farmers to abandon milk so that they could produce other food already in surplus, such as beef.

Exports to the Soiet Union have soared by about 1,100 per cent. since the Conservative party came to office. Export prices have plunged, with beef at 15p a pound, butter at lop a pound, and wine at 4.5p a litre. The surpluses have become so great that the Commission is bringing in crazy new plans such as its £200 million plan to subsidise the feeding of cows with butter.

That is the crisis and the problem of the Community. I do not think that even the EEC's greatest supporters would defend the CAP in its present form. I am in no doubt that the Commission and the Council will be deflected from their important task if we allow article 130D to remain.

Mr. George Robertson

This is an important amendment. However, that does not imply that the Opposition will vote for it. It will be interesting to hear the Minister's views on it. The hon. Member for Southend, East (Mr. Taylor) raised one element in the wide subject. The title of the article is "Economic and Social Cohesion". I do not know why the Economic Community must deal in such a strangulated vocabulary which is unintelligible to anybody who wishes to understand it. "Cohesion" means social and regional policy within the Community.

The Government have chosen to exclude certain parts of the Single European Act, most notably those relating to European foreign policy co-operation. However, they have chosen to introduce into the Bill that title and all that goes with it.

The amendment concerns article 130D. The objectives of article 130D are directed to article 130A, which states: In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion. Most importantly, the article continues: In particular the Community shall aim at reducing disparities between the various regions and the backwardness of the least-favoured regions"— presumably, in the Community.

Article 130D, which is the concern of the amendment, states: Once the Single European Act enters into force, the Commission shall submit a comprehensive proposal to the Council, the purpose of which will be to make such amendments to the structure and operational rules of the existing structural Funds … as are necessary to clarify and rationalize their tasks in order to contribute to the achievement of the objectives set out in Article 130A and Article 130C". I am sorry if I am confusing hon. Members with this gobbledegook, but that is the way in which the Government have chosen to present this bizarre and Byzantine legislation. Article 130C states: The European Regional Development Fund is intended to help redress the principal regional imbalances in the Community through participating in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions. Those are the fine and grand objectives of title V of the Single European Act.

In stark contrast to those objectives, which presumably the Minister will defend with considerable vigour, is the fact that the Government do not believe in that aim. They do not want to. At every opportunity to vote in the European Council — at meetings of the Finance Ministers Council and of the Foreign Affairs Council—they voted against it. Earlier today, hon. Members debated the 1986 European Communities budget. Last November, when Finance Ministers fixed the budget for 1986, the United Kingdom Government voted against increases in the social and regional funds which would have made them slightly more effective than they are at present in the Community as a whole. At present, their effectiveness is tiny. That example showed how the Community and the Government could have lived up to the hopeful expectations of the rhetoric in title V of the Single European Act. Far from endorsing and supporting it, the British Government chose to vote against it.

I see no purpose in the Government endorsing these objectives if they are not willing to do anything about them. This country is being doubly penalised under the present regime. The Government's restructuring of regional policy means that fewer areas are even considered for help through the regional fund.

Sir Russell Johnston

I do not want to interrupt the flow of the hon. Gentleman's argument, but surely he will remember that, in the earlier debate the critics of the European Community said, "By gosh, we do all this regional stuff ourselves. We would do it far better under the present Conservative Government than any European organisation could."

Mr. Robertson

The hon. Gentleman should not believe that the critics of the Bill and of the European Communities' finances are ever at one in respect to most of the objectives. There is a clear-cut division between the critics on the two sides of the Chamber on the regional and social funds.

I want merely to point out the contradictions in the Government's thinking. They are amply illustrated by this part of the Single European Act. The Government have turned their backs on regional policy, at home and in the European Community. They have consistently voted against giving it proper and adequate funds to do the jobs that they say are necessary. But they now come forward and say to the House of Commons that it should endorse a section of the Single European Act that underlines the commitment towards social and economic cohesion. They now say that the Commission should come forward with new rules to make cohesion easier.

We know that today the Minister of State, Treasury will have been involved in decisions on the European budget which will cut to the very minimum possible the amounts of money available in the budget to do something about eliminating the disparities between the regions. At the same time, that same Minister will have ensured that the existing lunacies in the CAP, which eat up more and more of the funds and make less and less sense of regional policy, are increased, despite the fact that, on every other front, the Government say that they agree with the fight against this nonsense. I hope that the Minister will be able to persuade the House in her reply that there is some intelligence behind this proposal.

Perhaps, with the adoption of the Single European Act, we might see the Government starting to believe in those tiny elements within the Act which might make more sense for the Community and for this country. However, I have a feeling of despair borne of experience in other areas, that we are likely to see the rhetoric backed up by nothing more than cynical self-interest which the Government show for their own policies.

Mr. David Heathcoat-Amory (Wells)

I rise for the first time during these Committee proceedings to support briefly the amendment proposed by my hon. Friend the Member for Southend, East (Mr. Taylor). The amendment seeks to leave out article 130D and I support it because I would hate to see such a vacuous and feeble clause pass into English law. As it stands, the clause seeks to clarify and rationalise the structural funds and in particular the agricultural fund.

The word "rationalise" does not mean very much. That is perhaps appropriate, because the Treaty is littered with phrases which are vague and imprecise and aims which are unquantified. If reform of the CAP is to be mentioned in the treaty and in the Act, stronger language is required about a fund which is gobbling up more than 70 per cent. of the European budget and which is still increasing.

The Committee does not know the final figures and we hope that a statement will be forthcoming soon. Newspaper reports state that the new budget, as agreed between the Council and the Assembly, might increase farm spending by £700 million. That is an increase over the Assembly budget which was declared illegal because it was an increase over the Council budget which in turn the British Government voted against last December because it threatened budget discipline.

These serious matters were debated earlier this evening. The only remedy suggested in article 130D is to clarify and rationalise. Article 130D contains a rather coy reference to money and that is almost the only reference to money in the Single European Act. Article 130D refers to the need for the funds to, increase their efficiency and to co-ordinate their activities between themselves and with the operations of the existing financial instruments. I do not know what that means. Perhaps something was lost in the translation.

Mr. Teddy Taylor

I believe that the words "existing financial instruments" convey the impression—at least they do to me and I am sure that they do to others— that the structure should be left alone and untouched.

Mr. Heathcoat-Amory

I do not doubt that my hon. Friend is correct. We are not told what the existing financial instruments are. However, I would suggest to the Committee that that might be an oblique reference to the 1984 Fontainebleau agreement. That agreement laid down specific procedures for financial discipline and for dealing with agricultural spending. If anything was to be included in the Bill, why are the specific procedures promised to the House at the time of the Fontainebleau agreement not included? The agreement states that it is, essential that the rigorous rules which at present govern budgetary policy in each Member State shall also apply to the budget of the Communities, and that the level of expenditure will be fixed on the basis of available revenue, and that budgetary discipline will apply to all budgetary expenditure. Why were these words not included in the Bill? It was on the basis of these words and the agreement that the House agreed to raise our VAT contribution from 1 per cent. to 1—4 per cent.

Although budgetary discipline has turned out be a somewhat empty phrase as predicted, I believe that the agreement is still in force.

It is incredible that an Act which purports to suggest ways to reform the CAP should not refer to that pledge made two years ago not just to this House but to each member state.

10.30 pm

A list of declarations appears at the back of the Act. Made by member states and organisations in Europe, those declarations elaborate on various provisions in the Act. There appear declarations by Greece, Ireland, Portugal, Denmark and by the Commission. The Commission's declaration, the meaning of which I find it difficult to follow, says: the Commission consider that the provisions inserted in the EEC Treaty with reference to the Community's monetary capacity arc without prejudice to the possibility of further developments within the framework of the existing powers. I think that means that the political aims of the Commission should not be hampered by lack of money. If the Commission could insert its interpretation of the Single European Act, why were the British Government not able to include their declaration containing reservations about the provisions, at least drawing the attention of the European institutions to that solemn agreement into which we entered after the Fontainbleu summit?

Why did we allow the provisions to be drafted in such an opaque form, and why did we decide not to make a declaration? Had we done the latter, we should at least have kept alight the flame of budgetary and financial discipline that we took to be a fact when we agreed months ago to increase our VAT contribution.

Mr. Bill Walker

I, too, support the amendment, not only for the reasons that my hon. Friends have advanced but because I represent a constituency with a huge agricultural interest. If we approve the provision as drafted, we shall continue as at present, with all the uncertainties that exist in the system, including the horse trading that goes on every year on agricultural policies and farming support.

That produces a great deal of unnecessary aggravation, simply because we are unable properly to come to terms with the difficulties. My hon. Friends and I shall continue to get aggravation from NFU members and hear about their ever-increasing disenchantment with the system. [Interruption.] They are not disenchanted with me, because they know my position in these matters.

Sir Russell Johnston

Did the hon. Gentleman suffer no aggravation under the old annual price review system?

Mr. Walker

The hon. Gentleman is talking of a scheme under which support came from the United Kingdom Parliament. The aggravation then was considerably less than it has been in the last three years. Under the old scheme farmers were not faced with surpluses for which they were not compensated, with the cost of keeping surpluses in store and with anxieties about the ways in which those surpluses are disposed of. The farmers feel strongly about that; if the hon. Gentleman's farmers do not feel that way, they must differ from those in my constituency. My farmers feel strongly that they are blamed for what they did not create. They are the victims of what has been created by Europe. They were encouraged to do certain things. I would go further and say that they were bribed to do certain things, on a scale that brings them considerable odium today. That is my concern.

The farmers responded to requests to produce more and more and to get into cereals and produce them in vast quantities. They were encouraged to get into milk production and do what they could. They responded and they are being blamed for it now. The article will continue to bring blame upon the farmers for something that properly is the responsibility of the European Community.

Mr. Butterfill

I cannot really agree with my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) that the article is opaque in any way. It seems clear In its objectives, and I am surprised that there should be muddle about that.

The article says that it will review the operation of all these farms so that they may contribute more effectively to the achievement of the objectives in articles 130A and 130C. To remind the House of those articles, they want to reduce the disparities between the regions and reduce the backwardness of the least favoured regions. The articles want to redress the regional imbalances in the Community and assist those areas that are lagging behind as well as assisting the industrial regions. I should have thought that hon. Members on all sides of the Committee would share those objectives.

Perhaps one of the great criticisms of the Community is that it has not achieved these objectives, and, indeed has signally failed to achieve them.

The different Community funds that are described in the article have been often pulling in opposing directions in their operation.

The article tells the Commission that it must come forward with proposals to rectify the problem and ensure that the funds will operate for the benefit of the Community in the way that is clearly spelled out in articles 130A and 130C. I cannot see any reason why all hon. Members should not support the inclusion of article 130D.

Mrs. Chalker

I shall say a few words about the 1986 budget at the beginning of my reply to this debate on amendment No. 37, as several hon. Members have mentioned that. The budget has been approved by the Budget Council and Committee, and by a final vote in the plenary session of the European Parliament this afternoon.

Let me say what this is, because it will help to explain to my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) why we did not write in a declaration about budgetary discipline or the Fontainebleau agreement. My hon. Friend was seeking to put that question, although he used slightly different words.

We have established the new 1986 budget within our resources ceiling. While the VAT rate for other member States will be 1.4 per cent. it will be lower for the United Kingdom at only 0.68 per cent. because of the increase in our abatement. The revisions to the budget will be of great financial benefit to the United Kingdom. There is extra provision for our abatement in addition to the £900 million that we are receiving in respect of 1985. That was the value of the Fontainebleau mechanism that I think my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was referring to earlier today.

The United Kingdom is a beneficiary of the extra provision of payments from the social fund. If I may now turn to something that has been said by other hon. Members in respect of the amendment I will then come back to the questions that were asked.

This debate is about cohesion, and that includes that part of the common agricultural policy which is part of the structural funds and thereby part of the Single European Act. That is known as FEOGA guidance, and it is the fund for agricultural restructuring. That is a very small proportion of the total CAP budget—around 5 per cent. It is in that sphere that the debate tonight should be concentrated, not on the 95 per cent. which is not part of the structural funds and, as my hon. Friend the Member for Southend, East (Mr. Taylor) said, that is where large amounts of the money go.

If I may deal with what the hon. Member for Hamilton (Mr. Robertson) said in his remarks—and he was quite wrong in what he said — the benefits to this country from the funds are not being cut in this budget; in fact, we are doing well. The position is that in regard to the regional and social funds—and particularly the social fund, from which we are major beneficiaries—there is an increase in the budget that has just been adopted for the benefit of this country. In total, since 1981 I estimate that we have had about £2.7 billion from the funds. Therefore, the budget to which I referred at the beginning is a success for the country. We will benefit from it, we are getting an increase in our abatement and we shall continue at a lower rate of VAT than before.

That is why I say, with regard to the remarks of the hon. Gentleman about the structural fund with which we are concerned tonight, and the articles before us in consideration of amendment No. 47, that the budget from that point of view is a good budget. I turn now to the clarification sought by my hon. Friend.

Mr. George Robertson

Will all the fairness that she is renowned for, does the Minister not accept that it is outrageous that we are having this debate, as we had the last debate, with the House of Commons not even knowing what is in the budget that she is now parading before us? Perhaps tomorrow because we understand that tomorrow there might be a statement—we shall be in possession of the information to confirm or deny what the Minister said about these funds in that budget. Is there not something fundamentally wrong about that? If the hon. Lady were on the Opposition side of the House, or even on the Tory Back Benches, she would surely create an outcry about that. She knows what budget was agreed in the early hours of this morning, but the House of Commons of this country does not know.

Mrs. Chalker

The budget has been a matter of debate in the House over several months. A decision has to be reached by the Council of Ministers, and I agree that this happened in the early hours, although it was on Tuesday morning, and it has, indeed, been reported in the press. I know the point that the hon. Gentleman is making. It is that it has not yet been reported to the House.

I did not feel that it was right to discuss that part of the common agricultural policy, in other words, the structural fund part of the CAP, without mentioning what some of my hon. Friends had been asking for. I do not seek to preempt my right hon. Friend's statement to the House, if he is to make one tomorrow. What I seek to do is to put in context the amendment that we are debating tonight.

Mr. Budgen

With reference to the rebate, I have just obtained a copy of tomorrow's Financial Times. There is a very interesting article on the back page which says that underlying all the discussions about the budget was the resentment that was felt by many other states against Britain's rebate. It is suggested that in the 1987 budget it might well be that some renegotiation disadvantageous to this country will occur concerning the rebate. I hope that my hon. Friend will not suggest that the rebate is there set in concrete.

Mrs. Chalker

As my hon. Friend has been able to leave the Chamber to obtain a copy of the Financial Times, he obviously has an advantage over me. Whatever is speculated about the future in the Financial Times—an excellent newspaper — does not affect what has been decided and agreed today in the 1986 budget. That is what we are concerned with this year, and we shall be facing considerable discussions about the 1987 budget. It still remains the case that the agreement that we made in Fontainebleau in 1984 stands, as does our abatement.

10.45 pm

My hon. Friend the Member for Wells asked about the lack of a declaration about budgetary discipline at the back of the Single European Act. There is a short answer and a long answer. I shall give him the short answer because of lack of time. There was no need to do so. The Fontainebleau abatement mechanism is already enshrined in Community law, and the budget discipline is unaffected by the Single European Act. The declarations in the Act are about issues raised in the changes to the treaty. As these issues are not raised by changes to the treaty, there is no sense in writing them in.

Mr. Heathcoat-Amory

Is my hon. Friend saying that budgetary discipline and the procedures laid down in the Fontainebleau agreement have been adhered to in the latest budget, which will be presented to the House

Mrs. Chalker

Yes, I am saying that they have already been adhered to, because the Fontainebleau mechanism is already enshrined in Community law. The budget discipline is unaffected by the Single European Act, and as been taken into account by my hon. Friend the Minister of State, Treasury in deciding the 1986 budget.

My hon. Friend the Member for Wells asked a further question about amendment No. 47. Article 130D is in article 23 of the Single European Act to bring about a clarification and a rationalisation of the tasks of the structural funds. If we are to use this money, we want to use it in the most effective and efficient way. We want to have a cc-ordination of activities where that will be of benefit.

The size of the structural funds will be determined under existing rules. The Bill will cut down duplication of effort, and ensure that the European taxpayer get better value for money out of the operation of the funds. Some of what has been said in the debate has ranged wider than article 130 and its various parts. That is why I said that the guidance section of the CAP on which we should be focusing is part of the structural funds and that it promotes objectives such as farm modernisation.

The well-known problems have their roots in the guarantee section, which pays for the market support mechanisms under various commodity regimes. All of that is completely outside the scope of amendment No. 47. It may be interesting, but it is not what we have before us.

The Government put very high priority on the reform of the CAP. The problems of agricultural oversupply are growing, not just in Europe but worldwide. The Community needs to pursue reforms and not only within itself. The enormous oversupply internationally needs to be pursued through GATT, OECD, bilaterally with major producers, and internally through the continuing reform of the CAP to ensure that it is better adjusted to the market situation with the result that the share of public expenditure claimed by agriculture can be reduced. Those are not my words. They are words taken from the European Council meeting at The Hague, upon which my right hon. Friend the Prime Minister reported only 10 days or so ago. There is no simple solution. It is a global problem. [Interruption] The hon. Member for Hamilton laughs at this. The Community's cereals surplus of 17 million tonnes is very large, but it is dwarfed by the United States cereals surplus of 80 million tonnes. Equally, it is wrong to pretend that left to ourselves we could either avoid or solve the problem. It is a world problem.

My hon. Friend the Member for Southend, East is worried about trade discussions between the United States and the Community. He believes that the world must solve the problem of food surpluses because the money that is wasted on storing surpluses could be better used. That is exactly what this Government are trying to do. That is why this year's price fixing is a positive step in the right direction.

We have included measures to curb cereal production and we have agreed to reduce dairy quotas. We hope that there will be an agreement on beef before the end of our presidency, and before the end of this year the reform packages will be seen to be working. The Commission estimates that measures that have been in place since 1984, including milk quotas, saved 1 billion ecu in 1984 and almost 3 billion ecu in 1985 and that they will save 4 billion ecu this year. That is not to be sneezed at. We shall build upon those savings.

In 1979 the common agricultural policy accounted for 75 per cent. of the budget. Today it accounts for 65 per cent. of the budget. We are determined that this downward trend shall continue. It will allow us to use the structural funds more efficiently. That is exactly what is covered by article 130D in title V of the Single European Act.

The amendment would not assist. It would lead us in the other direction. It would not clarify the use to which the structural funds can be put and it would not mean that the European taxpayer, which means the British taxpayer, would enjoy better value for money from the operation of the funds. I ask the Committee to reject the amendment.

Mr. Teddy Taylor

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. J. Enoch Powell

I beg to move amendment No. 22, in page 1, line 15, leave out 'the preamble and '.

In the course of these proceedings, it is useful occasionally to remind ourselves why we have the Bill at all. We have the Bill at all because it is necessary to have legislation in order that the Government may become a party to the treaty that they have made. In order to make that possible, effect has to be given in United Kingdom law to the consequencies of the new treaty. Therefore, we are thrown back upon the basic document, the European Communities Act 1972, which gave direct effect in the law of the United Kingdom to rights, et cetera, arising out of the treaties as they existed at that time.

We are now writing, as it were, into the 1972 Act parts of the Single European Act, namely those parts which may give rise to new rights, powers, liabilities, et cetera, that will have a direct effect on the law of the United Kingdom.

The Government, presumably not accidentally, have included the preambles to the Single European Act among the treaty provisions which are to be written into the 1972 Act. Therefore, they must believe that, under the preambles as opposed to the other provisions of the Single European Act, there may be new rights, powers and liabilities which will directly take effect in the law of the United Kingdom if provision is made to that effect by the Bill.

The Minister and other hon. Members have treated lightly the significance of the preambles. Indeed, they are large and their content is nebulous, but that creates an even more difficult problem: how such large and nebulous expressions of aspiration — expressions which the Minister said are by no means new — can create new rights, powers and liabilities, taking effect directly.

The purpose of the amendment is to seek from the Government a clear statement of the way in which the preambles as opposed to the articles of the treaty will create the new powers which will take direct effect in the United Kingdom. If there were no such consequences of the preambles, they would not be included in the text of the Bill. The amendment seeks clarification from the Government of the consequence of the preambles. They cannot be purely inert. They cannot be purely declaratory. They cannot be purely a restatement of what already exists, or they would not be mentioned in the Bill.

Mr. Deakins

The Government cannot feel strongly about the amendment, since only last year the Prime Minister told us that no treaty amendments were necessary. Had no treaty amendments been necessary, except for those which allow British to move towards the completion of the internal market, there would have been no Bill before the House, no preamble and none of these commitments.

My speech will relate to the commitment to European union. In the 1967 White Paper published by the Labour Government the words "European union" do not appear. In the 1971 White Paper, the following statement appears: The Community is no federation of provinces or counties. It constitutes a Community of great and established nations, each with its own personality and traditions. The practical working of the Community accordingly reflects the reality that sovereign Governments are represented round the table … There is no question of any erosion of essential national sovereignty. There is no mention of European union in that White

There was then the series of summit meetings, starting with Paris in 1972 and moving on to Copenhagen and other places, which developed the concept of European union. The then Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), fudged the issue and was extremely evasive in a statement to the House on 23 October 1972, when he said: Our concept of a European union is the same that this country has always had"— I query the words "always had"— which is that in developing institutions one develops them to meet the needs of the organisations concerned." — [Official Report, 23 October 1972; Vol 843, c. 796.] The Minister used similar words in reply to a debate earlier this evening, so that will obviously be the theme of her reply to this debate.

Even the Foreign Office, federalists though most of its occupants are, has recognised the need to define the term "European union", which was supposed to have been defined in 1972 and 1973. In the middle of 1973, the then Foreign Secretary, now Lord Home, was asked about this by me and by the right hon. Member for South Down (Mr. Powell), who then represented Wolverhampton, South-West. He said: Our objective of political union has been declared. For the foreseeable future it must be the nine countries working independently but achieving as great a consensus as they can." —[Official Report, 25 July 1973; Vol. 860, c. 1607.] 11 pm

That is almost harmless, one would have thought, but the Foreign Secretary, in a memorandum to the House of Lords Select Committee on the European Community:

"European Union" HL 149, a report from which I quoted earlier, said in quoting from a 1972 communiqué: The Heads of State and Government decided to speed up the work required to define the European Union". I stress to the Minister that that was from a 1972 communique and we still do not have an agreed definition by the member states of the EEC about European union. That Foreign Office memorandum went on to say: Part of the difficulty in considering European Union is that the term has never been satisfactorily defined. We are entitled to query what the term means. The Minister told us what the Government think it means, but we need to know what the Community thinks it means. That is the important thing. It is not what Ministers tell us that counts; it is what is going on in the Community.

Mr. Spearing

Has my hon. Friend seen the agreement signed by Foreign Ministers at the time of the European Common Act? That Act is not before the Committee and is not in the Bill and it gives substance to the Stuttgart declaration. Is not that the nearest honest meaning of European union, something upon which the Government have been completely silent?

Mr. Deakins

We have not heard anything from the Minister about that, but of course the Stuttgart declaration is being embodied in our legislation. That is called the solemn declaration. One wonders at the stupidity of that. Perhaps the Ministers were drunk at the time and had had a good meal.

Mr. Jeremy Hanley (Richmond and Barnes)

Withdraw.

Mr. Deakins

No. I am talking about Ministers generally over there. A former Minister here told us that the best agreements were reached over pheasant and port wine and things like that.

Even the Governments of the EEC could not satisfactorily define European union in the Stuttgart declaration. They called for a review after five years, preparatory to setting out a treaty of European political union.

It is sometimes difficult when one is proved right, and I am sorry that I was proved right in the forecast that I gave the House in a debate on 27 November 1973. I said that we were not worried about the fact that European union was not properly defined, but that we did not want to get to that destination however it was defined. I said it was not good enough to be told that we would be fairly slow in getting there, because we did not want to get there at all. We wanted to take an entirely different direction.

When the House debated European union in a minor way in 1982, the Minister's predecessor, who is now the Home Secretary, gave the House a number of assurances after fears were expressed about the Genscher-Colombo proposals, the German-Italian proposals, which were the precursors of statements about European union in the Stuttgart declaration. I have not time and I do not wish to bore the Committee by quoting all that he said. Suffice to say that the right hon. Gentleman the Home Secretary, who was then a Minister of State, Foreign Office, said of European union: It is not the creation of any new institution or increases in the formal powers of existing institutions." — [Official Report, 17 June 1982; Vol. 27, c. 1103.] He was wrong, because as we have shown conclusively during the course of our debates in Committee, the Bill gives some extra powers to some Community institutions in defiance of assurances previously given to the House.

My final point is that neither this nor any Government have a mandate for achieving European union, however it is defined. Assurances to the contrary were given to the British people in 1972 and in the referendum campaign in 1975. They were also given in The "Britain in Europe; Yes" campaign which I think the right hon. and learned Member for Hexham (Mr. Rippon) fully supported. I challenge the right hon. and learned Gentleman to deny that. Of course he cannot, because it is a fact. There was nothing in any general election manifesto by any of Britain's political parties about European union.

Mr. David Crouch (Canterbury)

This is a fairly late hour, but I have never heard so much rubbish during about 20 years in the House of Commons. Is the hon. Gentleman saying that there should be no unity in Europe? It is rubbish when we hear from the Opposition Benches, and even from the Opposition Front Bench, that there should not be unity in Europe. I have never heard such rubbish in my life.

Mr. Deakins

The hon. Gentleman has not been present for our debates and he may not have heard all the arguments. I am under great pressure of time—

Mr. Crouch

I am sick and tired of this rubbish.

Mr. Deakins

I do not have the time to take issue with the hon. Gentleman. If he does not like what I am saying, he can leave the Chamber.

Mr. Crouch

I shall not leave.

Mr. Deakins

Then the hon. Gentleman can stay and listen. He may find when he leaves the Chamber that he is rather better informed than he was when he entered it.

Mr. Crouch

It is rubbish.

Mr. Deakins

European union will not be achieved by stealth.

Mr. Crouch

Rubbish!

Mr. Deakins

That is the issue before us. There will be a gradual erosion of national sovereignty within the terms of the Bill and that will not be accompanied by any public debate. I am talking about debate outside the House. There is a deliberate confusion — I hope that the Minister of State will not take this approach when she replies — between political co-operation and political integration. Her predecessor tried to confuse the House by taking that approach before he moved on to become Secretary of State for Northern Ireland. We on the Opposition Benches support European co-operation and we are against European integration, and that is what political union is ultimately all about. It is no use the Minister of State Saying, "We see things differently." The issue does not rest with the Government alone. European union is for the 12 Governments of the Community and the federalist institutions, which are pushing more and more for closer co-operation arid integration. We shall divide the Committee on this amendment.

Mr. Cash

I have refrained deliberately from speaking during the Committee's proceedings, save for a brief three minutes, but I intervene because I attach great significance to the amendment. I declare an interest because I take my position as a Member of this place as being British first and European second. I believe that it is part of my duty as a Member to protect the interests of my constituents on these occasions.

The provisions of the amendment are important. To incorporate the preamble into the Bill has significance in terms of the interpretation of the measure as a matter of Community law, let alone as a part of United Kingdom law, and there will be an effect upon the sovereignty of the United Kingdom. We must not exaggerate the issue either way, which comes down to a matter of gearing. The interpretation that will be placed on the preamble in the courts cannot be denied, and anyone who attempts to do so will be misleading the Members of this place.

The notion of sovereignty embraces effective control. As I tried to explain in an article which appeared in The Times recently, which dealt with the way in which effective control of European matters is being conducted at the moment and as it affects Britain, there is a need for careful review. There are serious dangers that stem from a lack of accountability and a lack of control over what is taking place in Europe, which I believe impugn our sovereignty. I tabled an amendment, which was not accepted, to the effect that nothing in this measure would derogate from the sovereignty of the United Kingdom Parliament. That was not a re-run of the 1972 battle. It was an attempt to include in the Bill a counterweight to the methods of interpretation that I believe will be imported into the use of the preamble, which reaffirms the will to transfer the whole complex of relations between states into a European union. I shall refer briefly as well to the statement made by the Select Committee on Foreign Affairs on the legal significance of the preamble to the Single European Act. It reads: Its principal significance is as part of the context of the Treaty for the purposes of its interpretation. It quotes the Vienna convention on the law of treaties. It clearly states in the interpretation of treaties, article 31 on the general rule, that one must consider the whole treaty, including its preamble, in determining how to define it.

We must be careful to bear in mind the 12th report of the House of Lords Select Committee on the European Community which stated: The powers of the United Kingdom Parliament will be weakened by the Single European Act. We must take careful note of what that important Select Committee stated.

I referred to the question of control and sovereignty. In a careful analysis by Professor Phillip Taylor a few years ago, it stated that the Eurocrats demonstrated a positive attitude about moving forward to European union. Eighty per cent. agreed that that was the direction in which they should go. Eurocrats have far too much control. I should like to see a much greater degree of retention of sovereignty in this Parliament through scrutiny by hon. Members in the Select Committee on European Legislation considering matters that come before the House. Sovereignty must reside in Parliament.

I am not against Europe, political involvement in Europe, or a degree of unity, but I am against federalism. As the Prime Minister stated unequivocally: I do not believe in the concept of a united states of Europe … I am constantly saying that I wish they would talk less about European and political union. The terms are not understood in this country."—Official Report, 5 December 1985; Vol. 88 c. 432.] The matter is of great importance and I await with interest what my hon. Friend the Minister has to say.

Mrs. Chalker

The right hon. Member for South Down (Mr. Powell) asked me what rights and powers, in the sense of article 2 of the European Communities Act 1972. were contained in the preamble. The preamble is included in the present legislation to the extent that it relates to the Communities simply because it is part of the Single European Act.

Mr. Budgen

What does that mean?

Mrs. Chalker

If my hon. Friend would contain himself for just a couple of moments, he might learn.

It does not mean that the preamble must confer rights and contain obligations. It does not do so, anymore than the preambles to the original Community treaties which were given effect to by the 1972 Act.

Several hon. Members asked exactly what the status of the preamble is in relation to the substantive provisions of the Single European Act. Article 31(1) of the Vienna convention on the Law of Treaties provides that treaties shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. Article 31(2) of the convention makes it clear that the preamble forms part of the context in which the treaty must be interpreted. In the case of the Single European Act and other treaties, the European court would generally be— —

It being one hour after commencement of proceedings on the motion, THE TEMPORARY CHAIRMAN proceeded, pursuant to the Order [1st July], to put forthwith the Question already proposed from the Chair.

The Question being put, That the amendment be made:—

The Committee divided: Ayes 42, Noes 157.

Division No. 252]	[11.15 pm
AYES
Bell, Stuart	McKay, Allen (Penistone)
Bermingham, Gerald	McWilliam, John
Budgen, Nick	Marlow, Antony
Canavan, Dennis	Nellist, David
Clay, Robert	Patchett, Terry
Cocks, Rt Hon M. (Bristol S)	Pike, Peter
Cohen, Harry	Powell, Rt Hon J. E.
Cook, Robin F. (Livingston)	Powell, Raymond (Ogmore)
Crowther, Stan	Raynsford, Nick
Dixon, Donald	Redmond, Martin
du Cann, Rt Hon Sir Edward	Roberts, Allan (Bootle)
Foot, Rt Hon Michael	Robertson, George
Foster, Derek	Shore, Rt Hon Peter
Foulkes, George	Skinner, Dennis
Fraser, J. (Norwood)	Smith, Rt Hon J. (M'ds E)
Harrison, Rt Hon Walter	Taylor, Teddy (S'end E)
Haynes, Frank	Walker, Bill (T'side N)
Hogg, N. (C'nauld & Kilsyth)	Welsh, Michael
Howarth, Gerald (Cannock)	Williams, Rt Hon A.
Leighton, Ronald
Lewis, Terence (Worsley)	Tellers for the Ayes:
Loyden, Edward	Mr. Eric Deakins and
McDonald, Dr Oonagh	Mr. Nigel Spearing.

NOES
Adley, Robert	Forsyth, Michael (Stirling)
Alexander, Richard	Fowler, Rt Hon Norman
Alison, Rt Hon Michael	Fraser, Peter (Angus East)
Amess, David	Freeman, Roger
Ancram, Michael	Gale, Roger
Ashby, David	Galley, Roy
Atkins, Rt Hon Sir H.	Gardiner, George (Reigate)
Atkinson, David (B'm'th E)	Garel-Jones, Tristan
Baker, Nicholas (Dorset N)	Goodhart, Sir Philip
Baldry, Tony	Greenway, Harry
Banks, Robert (Harrogate)	Gregory, Conal
Batiste, Spencer	Griffiths, Sir Eldon
Bellingham, Henry	Grylls, Michael
Benyon, William	Gummer, Rt Hon John S
Biggs-Davison, Sir John	Hanley, Jeremy
Blackburn, John	Hargreaves, Kenneth
Blaker, Rt Hon Sir Peter	Harris, David
Boscawen, Hon Robert	Harvey, Robert
Bottomley, Peter	Hawkins, Sir Paul (N'folk SW)
Bottomley, Mrs Virginia	Hayes, J.
Bowden, Gerald (Dulwich)	Hayward, Robert
Bright, Graham	Heathcoat-Amory, David
Brinton, Tim	Henderson, Barry
Bryan, Sir Paul	Hickmet, Richard
Buck, Sir Antony	Hicks, Robert
Burt, Alistair	Hind, Kenneth
Butler, Rt Hon Sir Adam	Hogg, Hon Douglas (Gr'th'm)
Butterfill, John	Holt, Richard
Chalker, Mrs Lynda	Howarth, Alan (Stratf'd-on-A)
Chapman, Sydney	Howells, Geraint
Chope, Christopher	Hunt, David (Wirral W)
Coombs, Simon	Hunter, Andrew
Cope, John	Johnson Smith, Sir Geoffrey
Corrie, John	Johnston, Sir Russell
Crouch, David	Jones, Gwilym (Cardiff N)
Currie, Mrs Edwina	Jones, Robert (Herts W)
Dorrell, Stephen	Jopling, Rt Hon Michael
Douglas-Hamilton, Lord J.	Knowles, Michael
Dunn, Robert	Knox, David
Dykes, Hugh	Latham, Michael
Eggar, Tim	Lawler, Geoffrey
Fallon, Michael	Leigh, Edward (Gainsbor'gh)
Favell, Anthony	Lennox-Boyd, Hon Mark
Fenner, Mrs Peggy	Lester, Jim
Finsberg, Sir Geoffrey	Lilley, Peter
Forman, Nigel	Lloyd, Sir Ian (Havant)

Lloyd, Peter (Fareham)	Spicer, Jim (Dorset W)
McCurley, Mrs Anna	Stanbrook, Ivor
MacKay, Andrew (Berkshire)	Steen, Anthony
MacKay, John (Argyll & Bute)	Stern, Michael
Major, John	Stewart, Ian (Hertf'dshire N)
Malone, Gerald	Temple-Morris, Peter
Maples, John	Terlezki, Stefan
Mather, Carol	Thomas, Rt Hon Peter
Maude, Hon Francis	Thompson, Donald (Calder V)
Meyer, Sir Anthony	Thompson, Patrick (N'ich N)
Moynihan, Hon C.	Thurnham, Peter
Neale, Gerrard	Townsend, Cyril D. (B'heath)
Neubert, Michael	Tracey, Richard
Oppenheim, Phillip	Trippier, David
Ottaway, Richard	Twinn, Dr Ian
Page, Sir John (Harrow W)	van Straubenzee, Sir W.
Page, Richard (Herts SW)	Vaughan, Sir Gerard
Portillo, Michael	Wakeham, Rt Hon John
Powell, William (Corby)	Walden, George
Raison, Rt Hon Timothy	Waller, Gary
Renton, Tim	Wardle, C. (Bexhill)
Rhodes James, Robert	Warren, Kenneth
Rhys Williams, Sir Brandon	Watts, John
Rippon, Rt Hon Geoffrey	Wells, Bowen (Hertford)
Roe, Mrs Marion	Wheeler, John
Rowe, Andrew	Whitfield, John
Rumbold, Mrs Angela	Wilkinson, John
Sainsbury, Hon Timothy	Wolfson, Mark
Sayeed, Jonathan	Wood, Timothy
Shelton, William (Streatham)	Yeo, Tim
Shepherd, Colin (Hereford)
Sims, Roger	Tellers for the Noes:
Smith, Tim (Beaconsfield)	Mr. Archie Hamilton and
Speed, Keith	Mr. Tony Durant
Spencer, Derek

Question accordingly negatived.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

1. Clause 3
cc560-72
1. PROVISIONS RELATING TO EUROPEAN ASSEMBLY 6,997 words, 1 division