HL Deb 24 June 1971 vol 320 cc1001-13

4.6 p.m.


My Lords, I should like now to repeat a Statement made by my right honourable friend the Chancellor of the Duchy of Lancaster in another place. It is as follows:

"With your permission, Mr. Speaker, and that of the House, I should like to make a Statement about the meeting with the European Community which I attended in Luxembourg on June 21 and 22. As the House will have seen, this meeting achieved a number of agreements of the very greatest importance. The House will, I hope bear with me if the length of my Statement is in relation to their importance.

"The meeting first reached agreement on arrangements for British participation in the main institutions of the Community. Briefly, these arrangements would give this country a place in the institutions equal to that of France, Germany and Italy.

"Certain further details, including our participation in the European Court of Justice, remain to be decided, but I think it is already clear that there will be no difficulty in making arrangements which are perfectly satisfactory to us.

"We also reached satisfactory agreement on the problems connected with our entry into the European Coal and Steel Community. In the first place the Community delegation confirmed that they had no intention of calling in question the size or the legal position of the British Steel Corporation or the National Coal Board. We ourselves had never regarded this as a matter for the negotiations. But I was glad to have the Community's statement on the record.

"For our part we have accepted the Treaty of Paris and its implementing legislation and have undertaken to remove incompatibilities between our legislation and practices on the one hand and the Treaty of Paris on the other either before or at any rate very soon after our accession. As regards transitional measures it has been agreed that tariffs for steel products covered by the Treaty of Paris would move at the same rate as has been agreed for industrial products generally. We have also secured a transitional period of two years during which we might, if we wished, maintain control over the export within the enlarged Community of certain high grades of scrap.

"In return for our access to the reserve funds of the Coal and Steel Community, which amount to about£90 million, we have undertaken to contribute roughly £24 million, to the reserve funds of the Coal and Steel Community. This is rather less than would be called for on a strict application of the ratio of the value of our coal and steel production to theirs. The£24 million would be paid in three equal annual instalments starting from the date of accession. The money would be banked in the United Kingdom and would be used primarily, if not wholly, in this country.

"I turn now to arrangements to cover the period which would have to elapse between the signature of an accession treaty providing for our membership of the Communities and the entry into force of the treaty after the completion of processes of ratification here and in the member countries of the Community.

"We have agreed with the Community that in this period joint procedures would be established to ensure that decisions taken by the institutions of the Community took due account of the interests of candidates as prospective members and that consultations would take place before such decisions were taken. It was perfectly reasonable that the Community on their side should ask for the same procedures to apply to decisions to be taken by the candidate states which might affect their obligations as prospective members of the Community.

"We also raised with the Community the problems of our hill farming areas. They themselves have similar problems and have adopted a variety of methods to deal with them. So they were sympathetic to the needs of farmers in our hill areas, and recognised the need for appropriate action in these areas where special conditions obtain. I am therefore satisfied that in the event of entry we should be able to give the continuing assistance needed to maintain the incomes of farmers in the hill areas.

"I now turn to New Zealand. The agreement which we reached with the Community in order to provide adequate arrangements for the very special position of New Zealand is a complex one, and I will ask the House to bear with me if I set it out in some detail.

"First, it was agreed that there would be special arrangements for New Zealand dairy products. Quantitative guarantees have been agreed for the first five years, during which New Zealand would be guaranteed a market for agreed quantities. Butter is of course the product of particular importance to New Zealand. The guaranteed quantity for butter would be reduced during the transitional period so that in the fifth year New Zealand would be guaranteed 80 per cent. of present quantities. For cheese, for which New Zealand can in any case expect to continue sales to this country at a reasonable level after our entry, the quantities guaranteed would be reduced to 20 per cent. in the fifth year. The result is that in terms of milk equivalent New Zealand could be assured of selling 71 per cent. of the present quantity even in 1977. The price level would also be guaranteed to New Zealand at the average of that enjoyed here during the years 1969–72. We estimate that this will result in prices to New Zealand substantially higher than the average of recent years.

"During this first five-year period, it would be open to the Council of the Community, on which we would of course be fully represented in accordance with the agreement on institutions of which I have just told the House, to make adjustments as between guaranteed quantities of butter and of cheese, provided that the tonnage expressed as milk equivalent corresponded to the total quantities approved for the two products for the year in question.

"During the third year after our accession, the institutions of the enlarged Community would review the butter situation in the light of the supply and demand position and trends in the major producing and consuming countries of the world, particularly the Community and in New Zealand.

"Among the considerations of which account would be taken during this review would be the progress made towards an effective world agreement on milk products and the question of New Zealand's progress towards diversification of its economy and its exports. The Community has undertaken to make every effort to promote the conclusion of an international agreement on dairy products. We have moreover agreed that the enlarged Community would undertake to pursue a trade policy which would not frustrate New Zealand's efforts to diversify. Increased earnings by New Zealand in other markets might result. I would interject that this particular element of the agreement is of the greatest importance to New Zealand and has been appreciated by New Zealand Ministers as such.

"In the light of this review, the Council of the enlarged Community would decide on suitable measures for ensuring the continuation of the derogation system for New Zealand beyond the end of 1977. This also has been particularly welcomed by New Zealand.

"All this means that New Zealand even in 1977, six years hence, would be guaranteed sales of 136.000 tons of butter and at least 15,000 tons of cheese. These are minimum guarantees and she might well sell more. Since we estimate that the price which New Zealand would receive would be substantially above the level of recent years, this would give her the prospect over the five years of total export earnings at or above the level of those which she has enjoyed in our market in recent years.

"Taken together this represents a very satisfactory deal for New Zealand and a very considerable concession by the European Community, the implications of which will not be lost on honourable Members. In the circumstances it is gratifying, but not surprising, that the New Zealand Prime Minister has commented: 'One of the main requirements from our point of view was that there should be comprehensive and specific criteria to govern the review of the special arrangement when the time came for it to be renewed. The review formula represents a major concession to New Zealand and a result which is highly satisfactory. I am confident that we can safeguard New Zealand's interests within the framework of the broad agreement reached between Britain and the Six. Moreover we shall he on a unique footing in our future dealings with the enlarged Community. No other country will enjoy the same advantages.' "I now turn to arrangements for our participation in the Community's budgetary system.

"Here the arrangements which we have agreed would provide for a maximum annual contribution to be paid by the United Kingdom in the first five years amounting to 8-64 per cent. of the Community's budget in 1973 rising to 18.92 per cent. of the Community's budget in 1977. Before the end of 1977 the Commission would calculate the contribution which the United Kingdom would have made in 1977 had we then applied in full the Community's budgetary system. On the basis of this calculation, a limitation would be applied to our contribution for a further two years, namely, 1978 and 1979, to ensure gradual progression to our full final contribution.

"The House will want to know how the resulting contributions would com- pare with the estimates which I gave to honourable Members on December 16 when we made our initial proposals. The estimates of the budget of an enlarged Community have been revised downwards substantially since last year. At that time, it was thought that the budget of an enlarged Community might grow to a figure of 4,500 million dollars in 1977. However, the butter mountain of which we heard so much at that time has melted, and agricultural prices in the Community have risen very little over the past four years, while world prices have gone on rising. The price gap, and consequently the cost of agricultural support in the Community, have accordingly fallen. The budget is now expected to grow from 3,300 million dollars in 1973 to 3,800 million dollars in 1977.

"In these circumstances, our net contribution, for it is important to remember that we shall be receiving payments from the Community's budget, would be around£100 million in 1973, rising perhaps to about £200 million in 1977. These compare with £30 million for the first year under the arrangements I explained to the House on December 16 for 1973 and £140 million to £180 million for 1977.

"These sums are important ones. But the House will recognise that the Community has made arrangements which would be very satisfactory to this country on a number of other issues during the meeting which I have just attended, particularly on New Zealand. And it is fair and right that this country should, if it joins the Community, play its proper part in all aspects of Community policies and developments.

"Finally, the Conference discussed fisheries, and I want to make quite clear what the position is. As the House knows, we have put forward a proposition based on two essentials. First a recognition by the Community of the need for change in the common fisheries policy and secondly a clear indication of what would be necessary as respects access to fishing grounds in particular. We have suggested exclusive fishing up to six miles from existing baselines for vessels genuinely fishing from home ports. This still remains our position.

"The Six have now recognised that, in an enlarged Community, the access provisions of the common fisheries policy would have to be reconsidered and this will be the point of departure for the further discussions which will be necessary. It has been agreed that these discussions should be held with the Community at Ministerial level at a meeting in the week beginning July 12, and that, at our request, the other applicant countries should also be invited in view of the fact that, as the House is well aware, fisheries is also a matter of great importance to them. I know that the House places great emphasis on a firm agreement on limits before reaching a decision, and that is why I have asked for this early meeting. I will then report further to the House.

"I would like to pay a particular tribute to the understanding and co-operation with which the Community delegation dealt with these problems and to add a special word of appreciation to the role which the Commission played during what were arduous, but what I hope the House will agree, successful negotiations.

"There is still plenty of work to be done. And we have to reach agreement with the Community on transitional arrangements for our movement to Community policies regarding capital movements, on the European Investment Bank and on the safeguarding of employment in Northern Ireland, on the position of the Channel Islands and the Isle of Man, and of course on fisheries.

"But the agreements reached in Luxembourg mean that we have now broken the back of the negotiations. We have been able to progress so far because the Community have demonstrated their political will to see the Community enlarged and to have Britain in as a full member with them."

My Lords, that is the end of the Statement.

4.20 p.m.


My Lords, may I first thank the noble Marquess for repeating that long Statement. It is the longest Statement I can remember in this House, but that is probably not surprising because, whatever may be one's views, it is certainly the most important Statement in my memory: indeed, I would go so far as to say it is a historic Statement. It will not be universally welcomed; I am sure that there will be many noble Lords on this side of the House to whom it will be most unwelcome. Before I ask the noble Marquess one or two questions, may I be allowed to say that my own position on this issue has been made very clear over the years in speeches I made as a Minister in the Foreign and Commonwealth Office, and it has not changed since I moved from Government to Opposition. As a former negotiator, I should be less than honest if I did not say that I have been impressed throughout by the determination and skill of the Government negotiating team, and I share their relief at the conclusion of this most crucial phase in these historic negotiations. It is perhaps disappointing that the cost of contribution to the Budget is higher than we have expected; but on the other hand, there has been a clear concession, as the Prime Minister of New Zealand publicly said, to the position of New Zealand. and one is no longer able to say, as I did in the past, that it is no good going into negotiations and making all the concessions without exacting some from the other side.

Having said as much, I should like to put a few questions to the noble Marquess. some procedural and some designed to elicit information which I hope may be useful in our later discussions. I shall be grateful to know when we may expect the White Paper to emerge so that we may have time to study it before our further discussions; and I wonder whether I may ask the noble Marquess to assure us that when it emerges it will be written in plain English, so that everybody may understand exactly what we are being asked to agree to. On the question of the package so far as it has emerged, why is it that the price levels in the New Zealand agreement have been fixed at the 1969-72 levels? Presumably there is a reason for this. I am not clear why some allowance was not made for inflation and why that particular period was chosen.

On the question of fisheries there seems to be a great deal still left in the air.


Hear, hear!


The Statement admits as much. But may we ask when the fisheries policy will become clear; and may we have an assurance that it will be made absolutely clear before the House is asked to take a decision on the full package? My last substantive question concerns EFTA. Can the noble Lord say whether it is true, as reported in some newspapers to-day, that EFTA has been offered the benefits of an industrial free trade arrangement with the Common Market; that is to say, in effect the Common Market will become a member of EFTA. Is this true? Can he throw any light on these reports? Finally, on a procedural matter, I understand that there has been agreement through the usual channels for an extensive debate on this subject. Can the noble Marquess confirm that and can he give us any indication when it may take place?


My Lords, I need hardly say that we on these Benches heartily welcome the agreement which has now been reached in Luxembourg, and once again extend to Mr. Rippon and his team all our congratulations. As the noble Lord, Lord Chalfont, has said, it is indeed a historic occasion. As we see it, there can be no denying that Mr. Rippon (with the exception of the fishing and one or two other smaller points which look as if they are going to be settled satisfactorily quite soon) has got everything he could possibly have been expected to get and, so far as New Zealand is concerned, considerably more than most people expected. The concessions which his tenacity has obtained from the Six are, we must all admit, really remarkable. And in any case, entry on these broad terms will have far fewer economic disadvantages, notably as regards our balance of payments, than those forecast in the last White Paper on the subject, to say nothing of the cataclysmic results then forecast by the anti-Common Marketeers. The conclusion must therefore be that nobody can oppose our entry on the terms now proposed save those who on principle object to our joining E.E.C. in any circumstances whatever. Such people, as our own Party Leader, Mr. Thorpe, has said, even if mistaken are no doubt numerous, sincere and patriotic; but they can hardly include those who supported the great efforts of Mr. Wilson and Lord George-Brown (to whom, if he were in his place, I should like to pay a sincere tribute, as also to the noble Lord, Lord Chalfont) to enter the Common Market on terms which included, in principle, acceptance of the Common Agricultural Policy.

I have only one specific question. Speaking of the review of the butter situation as regards New Zealand that will be held in the third year after our accession to the E.E.C., Mr. Rippon said that the Council of the enlarged Community would decide on suitable measures for ensuring the continuation of the derogation system for New Zealand beyond the end of 1977". This is the question I should like to put: how would the Council so decide? If by unanimity, would this mean that the existing derogation system would continue to be applied in the absence of a decision to alter it? Or is that not the case?


My Lords, may I thank both noble Lords who have spoken and, if I may, echo the very handsome tributes they have paid to Mr. Rippon and his team. The noble Lord, Lord Chalfont, has asked me several questions, some of which I can answer, some of which I cannot be quite specific about. The first question he asked was when the White Paper might be expected. I am afraid that I cannot personally give him a date for this; but obviously it will have to be within a very few weeks, to give the House time to read and digest it before we come to our debate. I think I am right in saying that this will be arranged through the usual channels. I should not like to go further than that at the present time. I shall also try to ensure that the White Paper is written in language that both he and I and the rest of the House can understand.

He also asked me a question as to why the dates 1969–1972 have been chosen as the standard for the average price of New Zealand dairy products. My Lords, I am not absolutely certain that I can give him the answer to that as I was not at Luxembourg during that time. All I can say is that Mr. Marshall, who was in Luxembourg, must, I think, have been perfectly satisfied that this was a reasonable period which would give them a reasonable price. As to the question of fisheries, I can assure the noble Lord that we hope to have absolute clarification on the matter before there is any question of a decision. He also asked a question about EFTA. I may say that I have not seen this report, and therefore I should not like to comment on it; but I will, of course, look into the matter.

The noble Lord, Lord Gladwyn, asked a question about what would happen in the third year if the Commission did not come to an agreement about the derogation—


No, my Lords; I asked how would the Commission make its decision.


Well, my Lords, the Commission will make the decision—and at that stage we hope we shall be a party to it—in the light of the facts (as I said in my Statement) of the situation of the supply, demand and pricing at that time.


My Lords, may I ask the noble Marquess three short questions? The first is this. Is he aware that it is necessary (in view of the euphoria expressed in the language of my noble friend Lord Chalfont who apparently wholeheatedly supports the agreement that has been reached at Luxembourg) to say that my noble friend is not speaking for every noble Lord on this side of the House; and certainly not for the Labour Party or for a majority of people in this country? That is my first question, and I hope that I have made it abundantly clear to your Lordships' House.

My second question is this. Is not the agreement, particularly about New Zealand, the alleged concessions, and also the concessions to the French for which they have been asking for quite a long period of time, namely, that the initial contribution in the first half of the transitional period should be increased, as indeed Mr. Rippon has agreed to—a complete surrender to the French; and, moreover—




I am asking the question, and I want the answer from the noble Marquess, and not from the ancient advocate of going into the Common Market on my right. The interruption was forced on me. I know that I am not supposed to indulge in it and that I should merely ask a question. I put the question again. Is not the concession to New Zealand, a limited concession, attributable almost entirely to the concession made to the French, for which they have been asking for a long period of time; and does not the reduction—this is my third question—in food imports from New Zealand over a period of time mean that it will pave the way for imports of precisely the same kind of dairy products from France, and from some of the other countries of the Six, which means that a rise in food prices, particularly dairy products, is inevitable?


No, my Lords, I do not think I can agree that there has been a surrender to the French—


I should be surprised if you did.


—in the matter of the initial contribution. Of course, we should have preferred a lower contribution; there is no doubt about that. On the other hand, the agreement reached so far is that we shall be paying something in the region of about half what the Community originally suggested that we might pay. So I really do not think that the noble Lord can honestly say that we have surrendered to the French in this matter. We have been very pleased that the Community, the Six, have been able to help us and to help the Government of New Zealand. I should like to re-emphasise that the Government of New Zealand, in the person of their Prime Minister, have expressed themselves as very satisfied in this matter. I feel that the noble Lord's first "statement", as I think I might call it, is not one for me to comment on.


My Lords, may I ask the noble Marquess one simple question on a subject which, I suspect, he thinks that I am going to ask about; that is, whether the fishery negotiations will be completed in time for inclusion in the White Paper? The timing of this business is rather important, and it was not quite clear from Mr. Rippon's Statement (I think that Mr. Rippon is to be warmly congratulated on his achievement) whether the fishery proposals will come before or after the issue of the White Paper.


My Lords, I think this rather a difficult question, and I cannot be absolutely certain of the answer. My feeling is that it may be, in view of the time factor, that the White Paper will have to be published before the final results of the fishery proposals. As Mr. Rippon himself has said, this will not mean that he will not, when he has the result, come to Parliament and report.


My Lords, with regard to New Zealand and the reply given by the noble Marquess—particularly in respect of the question from the noble Lord, Lord Chalfont—is it to be understood that there is no provision for escalation at all in the agreement, as is provided for in so many other international agreements, where there is an escalation clause related to the increase of population?


No, my Lords; my understanding is that no escalation matters have been considered in this way.


My Lords, may I ask the noble Marquess whether the White Paper, when published, will tell us not only what are the benefits and costs of going into the Market, but also what would be the position of this country if we stay out?


My Lords, I do not think that I can foresee, or prophesy, what the White Paper will include; but I will certainly take note of what the noble Lord has said.