§ 3.49 p.m.
§ Lord SHEPHERDMy Lords, with the permission of your Lordships' House, I should now like to repeat a Statement which is now being made by my right honourable friend the Prime Minister in another place. I should like to apologise to the noble Lords, Lord Balniel and Lord Byers, because I was absent for part of their speeches in order to get my first sight of the Statement. I will use the Prime Minister's own words:
"With permission, Mr. Speaker, I would like to make a statement about the meeting of the European Council of the Heads of Government of the European Community held in Dublin on 10th and 11th March at the invitation of the Prime Minister of the Republic of Ireland.
"The Council dealt with six main questions : the outstanding renegotiation issues of a correcting mechanism for the Community budget and access after 1977 for New Zealand dairy products; the economic and socdal situation in the Community; energy; the Conference on Security and Co-operation in Europe; Cyprus; and the British Government's proposals on the subject of raw material and food supplies, which we shall of course also be discussing at the forthcoming Commonwealth Heads of Government meeting in Jamaica. The Council agreed statements on the Conference on Security and Co-operation in Europe; on energy; on Cyprus; and on imports of New Zealand dairy products; and after the meeting Mr. Cosgrave made a statement on the budget correcting mechanism. With permission, copies of these documents have been placed in the Library and will be published in the Official Report as an annex to this statement.
"I also supplemented what my right honourable friend the Foreign and the Commonwealth Secretary, had said at 307 The Foreign Ministers' Council in Brussels on 3rd March on the subject of steel.
"The Council had a long discussion about the Conference on Security and Co-operation in Europe. We welcomed the progress that had already been made in Geneva and the hopes for sufficient further progress to be made from now on to enable the Conference to be concluded by a meeting to be held at an early date at Heads of Government level.
"The Council decided that preparatory work for the forthcoming International Energy Conference of Consumers and Producers should be carried out by a new high-level Community committee reporting to the Council of Ministers; and that the European Council itself should meet again at the appropriate moment to prepare for this conference.
"In the discussion of the supply of raw materials and food I outlined to the Council the Government's general approach to the need for further co-operation between developed and developing countries in respect of supplies and prices of raw materials and primary commodities. Our proposals carry further the ideas which my right honourable friend and I discussed with President Ford and Secretary Kissinger, and will build on both the World Food Council decisions and the stabilisation proposals of the Lome convention. I made clear to the other Heads of Government that we hope to develop further the initiative we have taken, when we attend the Commonwealth Prime Ministers' meeting at the end of April.
"As to renegotiation matters, we reached agreement on the budget correcting mechanism and on access for New Zealand dairy products. Our agreement on the correcting mechanism for the budget was based on the proposals made by the Commission. I do not need to take the time of the House with a description of these proposals, since they were the subject of a debate in this House on 27th February."
308 That is, the House of Commons.
"Certain suggestions for modifying those proposals, which would have had the effect of making them less favourable to us, were not accepted. On the other hand we secured some changes to our advantage. The House will be able to study these changes in the documents which are being circulated in the Official Report. The two main changes were on the operation of the balance of payments criterion and on the limits on refunds.
"Under the balance of payments criterion proposed by the Commission a member state would have ceased to be eligible for a budget refund if it had run a balance of payments surplus on average for three years. This criterion was modified so that, even if a country has a balance of payments surplus on average over three years, it can continue to qualify for a refund related to its VAT contribution, provided that it meets the other criteria.
"On the limits on refund, the Council agreed to drop the Commission's proposal that refunds should be limited to two-thirds of the amount by which a country's share of the budgetary contribution exceeded its share of the Community's GNP. Instead, the Council agreed upon a ceiling of 250 million units of account on the amount of a refund to any qualifying country in any single year. This would give a refund at current exchange rates of up to about £125 million in any year to a member state that qualifies. It was also agreed that, if and when the total Community budget came to exceed 8,000 million units of account, the ceiling from then on should be 3 per cent. of the budget total. The arrangements which the Community has now agreed would, if Britain remains a member of the EEC, give us an assurance of a repayment of hard cash if we found ourselves in the future paying an unfair share of the Community budget.
"On New Zealand dairy products, the Heads of Government were concerned, not with the detailed arrangements for access after 1977, but with laying down the political guidelines on which the decisions on these matters 309 are to be prepared. These represent a substantial improvement on the existing protocol. First, it was agreed that annual imports of butter for the first three years after 1977 (from 1978 to 1980) may remain close to deliveries in 1974 and 1975. The Heads of Government accepted, what had been strongly urged on us by the New Zealand Government, the need for periodic review of the prices received by New Zealand, and provided for these to be adjusted as necessary to take account, among other things, of future developments in the levels of Community intervention prices. In the existing protocol signed in 1972 the special arrangements for cheese expire altogether after 1977, but it is now accepted that this creates problems which, in the words of our agreement, will be examined by the Community with due urgency. In other words, we have now kept open the option for some continuing imports of New Zealand cheese after 1977, when they were due to cease under the 1971 terms. The Commission have been invited to bring forward their report for the review of the protocol together with the necessary proposals. I would expect this to be done during the summer.
"I made clear to the other members of the Council that, with these agreements on the budget and on New Zealand, we had now taken our discussions within the Community on renegotiation as far as they could go. The Cabinet will shortly be reviewing what has been achieved over the last year in the renegotiation as a whole, on the basis of the objectives set out in our Party Manifestos of February and October last year. I expect to announce the Government's decision to Parliament before the Easter recess."
§ Following are the statements referred to:
§ C.S.C.E.
§ "The Heads of Government reaffirmed the determination of the Nine to pursue and develop their policy of détente and co-operation in Europe.
§ "They expressed the hope that this policy will encourage ever-increasing understanding and trust among peoples, which is the basis for a genuine improvement of the political climate on the continent. This objective will find particular expression in the development of relations between States and peoples in which 310 an important part should be played by the individual.
§ "In this context, the Conference on Security and Co-operation in Europe, and the implementation of its decisions, are destined to piay an important part.
§ "The Heads of Government expressed their satisfaction with the constructive role which, due to their concerted diplomacy and the common positions they have adopted, the Nine have been able to play in the course of this conference, which is closely related to the interests of the European Community.
§ "The Heads of Government reviewed the development of the work which is currently under way in Geneva: they noted that substantial progress had already been made, but also that some important points remained to be settled.
§ "They pronounced themselves in favour of as rapid a conclusion as possible to this work. To this end, they intend to continue and intensify their efforts to seek in an open and constructive spirit, positive solutions to the problems which are still under discussion or outstanding.
§ "The Heads of Government hope that all participating States will as they have decided to do themselves, make every effort necessary to obtain balanced and satisfactory results on all the subjects on the agenda. This would make it possible to envisage the conclusion of the conference at an early date and at the highest level.
§ Energy
§ "The Heads of Government, meeting in Council in Dublin, examined the problems connected with the International Energy Conference. They agreed that the Community should undertake intensive preparation for this conference without delay. Preparation will involve listing the various problems, concerning both matters specifically relating to energy and directly connected questions concerning economics, finance and the developing countries, to be dealt with at the conference and the preparatory meeting for it. Preparatory work will also attempt to define the joint responses to be made depending on the positions adopted by the other participants at the conference.
§ "The preparatory work will be earned out under the authority of the Council (Foreign Affairs) by a high-level ad hoc committee composed of representatives of the member States and the Commission. It will be based on the inventory, to be drawn up by the Commission, of problems to be dealt with at the conference and the preparatory meeting, any proposals which the Commission submits to the Council on these problems and suggestions and requests made by the member States.
§ "The Council will take the appropriate decisions on this basis and in particular will determine the content of and arrangements for the dialogue to be conducted with the other consumer and producer countries.
§ "The Council has agreed to meet at the level of Heads of Government in good time to prepare for the conference.
311§ CYPRUS
§ "The Heads of Government and Foreign Ministers recalling the statement issued by the Foreign Ministers following their meeting in Dublin on 13th February, hope that in the context of the discussions currently being held at the United Nations in New York, there will be an early resumption of negotiations on the question of Cyprus. The Nine will of course continue to keep in close touch with developments as regards the situation in Cyprus.
§ NEW ZEALAND DAIRY PRODUCT IMPORTS
§ "The Heads of Government, meeting in Council at Dublin the 10th March, underline the importance which they attach to Protocol 18 of the Act of Accession, as regards the relations of the Community with New Zealand, a traditional supplier of dairy products to a substantial part of the enlarged Community.
§ "They invite the Commission to present a report in order to prepare the review provided for in Article 5 of the Protocol and to submit as soon as practicable a proposal for the maintenance after 31st December 1977 of special import arrangements as referred to in that Article. They observe that the institutions of the Community have already carried out certain price adjustments in the framework of the Protocol. In the same spirit, the Community, which remains attached to a fair implementation of the Protocol is ready to review periodically and as necessary to adjust the prices having regard to the supply and demand developments in the major producing and consuming countries of the world, and also to the level and evolution of prices in the Community—including intervention prices—and in New Zealand, taking moreover into account cost developments in New Zealand and trends in freight charges.
§ "As regards the annual quantities to be established by the Community institutions in the framework of the special arrangements after 1977, these should not deprive New Zealand of outlets which are essential for it. Thus for the period up to 1980, these annual quantities depending upon future market developments, could remain close to effective deliveries under Protocol 18 in 1974 and the quantities currently envisaged by New Zealand for 1975.
§ "They note that Protocol 18 provides that \ the exceptional arrangements for the import of cheese cannot be maintained after 31st December 1977, and that this situation and the problems which may arise from it will be given due attention with appropriate urgency, taking into account also the considerations in the following paragraphs.
§ "The Heads of Government note, more-over that New Zealand and the Community together provide the major part of world exports of dairy products. They, therefore, express the wish that, in the same spirit with which the Community approaches the application of Protocol 18, an ever closer cooperation be developed between the institutions of the Community and the New Zealand authorities with the objective of promoting in ! their mutual interest an orderly operation of 312 world markets. Such a cooperation, apart from its intrinsic value, should provide a basis from which to achieve, in a wider framework, the conclusion of an effective world agreement such as is envisaged in Protocol 18.
§ Budget Correcting Mechanism
§ "The Council agrees on the correcting mechanism outlined by the Commission in its communication entitled The Unacceptable Situation and the Correcting Mechanism with the following modifications:
- 1.The criterion concerning the balance of payments deficit and the two-thirds ceiling are dropped.
- 2.The following provisions will be incorporated into the agreed mechanism:
- A. The amount of the correcting mechanism shall be up to a ceiling of 250 million units of account. However, as soon as the amount of the Community budget exceeds 8.000 million units of account, the ceiling shall be fixed at an amount representing 3 per cent. of total budget expenditure.
- B. When a moving average drawn up over 3 years indicates that the balance of payments on current account of the country in question is in surplus the correction shall only affect any difference between the amount of its VAT payments and the figure which would result from its relative share in the Community GNP."
§ 3.8 p.m.
§ Lord CARRINGTONMy Lords, the House, as always, is grateful to the Leader of the House for having repeated this Statement. Equally, I think it would be a considerable exaggeration to suggest that anybody in your Lordships' House will be surprised at the outcome in Dublin. It is not, perhaps, quite such a cliff-hanger as one might have supposed, although familiarity is breeding something or other within us. Without wishing to be too unkind to the Government, the story seems to unfold with all the predictability of a speech by the noble Lord, Lord Wigg. But here we are, so let us be thankful.
The Prime Minister has decided that he now has the best terms that he can obtain, though we do not know, I think, whether he will recommend those terms to the Cabinet. Perhaps the only lesson we can draw from all this is that the sooner this sorry episode is behind us the better. Members of the Cabinet will then be able to stop campaigning against each other, and, should they still be on speaking terms, they will be able to concentrate on the appalling economic situation which faces this country. I have only one question to ask the noble Lord and it is the 313 only important one: do the final terms arrived at in Dublin fulfil the terms of the renegotiation in the Government's mind?
§ Lord BYERSMy Lords, I should also like to express the gratitude of this House that this well-rehearsed charade by the Prime Minister and the Foreign Secretary has now come to an end. May I ask very seriously whether before Easter we shall know not only the decision of the Government but what they have decided to recommend to the country?
§ Lord SHEPHERDMy Lords, the noble Lords, Lord Carrington and Lord Byers, have put me in a difficult situation. We have a long debate in front of us and if I were to rise to what I thought were the unnecessarily provocative remarks of both noble Lords, I should only stimulate further questions from behind. Since I am ill-equipped to reply -having seen the Statement only five or six minutes ago-I do not intend to run that risk. However, I should have thought that the noble Lords, Lord Carrington and Lord Byers, had been less than fair. Whatever the judgment of the Cabinet, Parliament and the country may be on the renegotiated terms, they are an advance on the situation when this Government came into Office. If the noble Lord feels a little sour, I can assure him that the people and the industries of New Zealand and the peoples in the developing countries-particularly of the Caribbean-will feel very different.
My Lords, the decision will be taken by the Cabinet after a full examination of the terms that have been renegotiated. An announcement to that effect will be made in your Lordships' House and, as I said on a previous occasion, it will be contained in a White Paper. If we are to give our recommendations, clearly this Government will give their reasons.
§ Lord WIGGMy Lords, before I put a question to my noble friend, may I be permitted to thank the noble Lord, Lord Carrington, for the kindly reference to me As my speeches are entirely predictable, he can be quite sure that anything he hands out to me will be returned in due course with compound interest and tied up with ribbons.
Having made that point, may I ask my noble friend how, if these negotiations were as important and as cliff- 314 hanging-to use the expression of the noble Lord, Lord Carrington-as the Press communiqué this morning indicated, it comes about that the issue centred only on a payment of about £150 million? Also, as the German Government made it quite clear that it had been agreed before the Conference opened, what caused the Prime Minister's public relations officers, or maybe those of the Foreign Office, to announce at six o'clock last night-using Reuter, I regret to say -that the Prime Minister was about to emulate the example of Disraeli at the Berlin Conference and was packing his bags to come home? Was that part of the cliff-hanging operation and staged in order to give the impression that the Prime Minister was snatching victory from the jaws of defeat?
§ Lord SHEPHERDMy Lords, I happened to be in your Lordships' House until a late hour last night and I did not have the same opportunity as my noble friend of reading Reuter's dispatch or any other medium of communication in order to learn what may have been coming out of Dublin. Again, since I have been working rather hard today, I have equally not been aware of that during today. I would suggest to my noble friend that very shortly we shall be able to have a full examination and debate on all the terms that have been renegotiated. We shall be able to examine them with full knowledge rather than in the light of information based upon what Reuter or any other form of short-term news medium tells us.
§ Lord FERRIERMy Lords, could the Leader of the House confirm that copies of Hansard will continue to be sent by post to Members?
§ Lord SHEPHERDMy Lords, I do not know how that arises on the Statement, but I shall endeavour to see that the noble Lord receives his Hansard as in the past.
§ Lord HARMAR-NICHOLLSMy Lords, while one understands the noble Lord's reply to the noble Lord, Lord Carrington, and respects the way in which he got out of the difficulty of the question, I feel that the noble Lord ought to remember that some members of the Cabinet in the previous Labour Government stated that the conditions arrived at 315 by the last Conservative Government would have been acceptable to them. They said that it had reached the measure of satisfaction that they had in mind. Other members of the Cabinet, including the Prime Minister, said that the conditions were not satisfactory. Can we now say that the new conditions brought back from Dublin are ones that will satisfy those who before said that they fell short of what they had in mind?
§ Lord SHEPHERDMy Lords, when the noble Lord has been in your Lordships' House a little longer, he will know that if I do not want to go any further than I have, I never do. I am not going to break that habit this afternoon.
§ Lord GORE-BOOTHMy Lords, is it not time that somebody was a little gracious about this episode? The renegotiations may have started very badly, but is it not appropriate to express at least appreciation that they have been brought to an efficient end and that, in the intervening period, certain points have usefully been gained? It would also not be a bad thing to express appreciation to our eight partners for their evident desire that we should remain partners with them.
§ Lord SHEPHERDMy Lords, I am very grateful for what the noble Lord has said. I think that he has drawn attention to the fact that there was recognition among other partners that the terms that were negotiated in 1971 were unfair to this country.
§ Lord MACKIE of BENSHIEMy Lords, would it not perhaps be as well to reflect on the attitude of the Leaders of Governments in Europe in any future negotiations that take place, in that what they have given to help the Government in their political device in these negotiations may well be taken off this country in the future?
§ Lord SHEPHERDMy Lords, the noble Lord must be well aware of the mechanism of the Council of Ministers. An agreement has been reached and the Prime Minister has said that this is the limit of these renegotiations. The noble Lord must be well aware that, in the Community, what one has one can hold.
§ Lord WIGGMy Lords, would my noble friend not agree that the Manifesto 316 of 1974 contained the basic demand by the Labour Party at the Election that there should be a retention by Parliament of those powers over the British economy needed to pursue effective regional, industrial and fiscal policies? Clearly, my noble friend must be aware of those words even if he is not aware of what Reuter put out yesterday. Could he explain why there is no reference to them in the communiqué.
§ Lord SHEPHERDMy Lords, I am well aware of those words and I am aware that I am making a Statement as to what took place in Dublin. I cannot speculate as to the reasons why matters were not taken up in Dublin.
§ Lord MAYBRAY-KINGMy Lords, is the noble Lord aware that, in spite of the chilly reception which his Statement has received, there are many people in Britain who are delighted at the suc cess of the negotiations in Dublin?
§ Lord SHEPHERDMy Lords, I am not at all surprised about the chilly reception. In my experience of your Lordships' House, when a Labour Government have something to put forward that has a touch of success-and I should not wish to go any further than that-the Opposition are always slightly sour.