HL Deb 18 March 1975 vol 358 cc625-30

3.51 p.m.


My Lords, with the permission of the House, I should like to repeat a Statement that is being made by my right honourable friend the Prime Minister in another place. May I express sincere apologies to the noble Lord, Lord Carrington, and the noble Lord, Lord Gladwyn, that they have only just received the Statement. If it is any consolation to them, I shall be reading it with them for the first time. I shall use the Prime Minister's own words. The Statement is as follows:

"Mr. Speaker, with permission I should like to make a Statement on the European Community.

"I regret that this will inevitably be somewhat lengthy, but this is one of the most important parliamentary occasions in our history, and I feel a duty to state the Government's position here in the House, rather than make a short, even perfunctory statement here, and a lengthier statement outside the House, where it is not subject to Parliamentary questioning.

"Her Majesty's Government have decided to recommend to the British people to vote for staying in the Community.

"Last Wednesday, after Dublin, I told Paliament that the renegotiations, begun last April, had now gone as far as they can usefully go and that while some of our objectives—if Britain remains in the Community—can be pursued in the continuing meetings of the Council of Ministers, we have now reached the point where Government, Parliament, and then the country must take the decision.

"The House will be familiar with the renegotiation objectives we set out, in the Manifesto for the February 1974 Election, and confirmed in October.

"While the judgment of honourable Members, and of the electorate, may, in taking their decision, go far wider than the terms achieved in the negotiations, I feel it is right to give the House my assessment of what has been achieved.

Objective One

"Major changes in the Common Agricultural Policy so that it ceases to be a threat to world trade in food products, and so that low cost producers outside Europe can continue to have access to the British food market.

"My right honourable friend the Minister of Agriculture gave precision to these objectives in his statement to the Council of Ministers on 18th June, on which he reported to the House on 19th June. He asked for:—

  1. 1. The establishment of firm criteria or pricing policy, taking account of the needs of efficient producers and the demand/supply situation.
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  3. 2. Greater flexibility, taking account of the need for appropriate measures to deal with special circumstances in different parts of the Community.
  4. 3. Measures to discourage surpluses and to give priority to Community consumers in the disposal of any surpluses which arise.
  5. 4. Improvement in the marketing régimes for some major commodities, particularly beef, with a view to avoiding surpluses.
  6. 5. The improvement of financial control.
  7. 6. Better access for certain commodities from outside the Community, with particular regard for the interests of Commonwealth producers and of the consumer.

"Now as to the outcome.

"On the 'supply of food at fair prices', in the three CAP price settlements since the Government took Office, the Minister of Agriculture has succeeded in keeping price increases below cost increases, and thus in real terms reinforcing the downward trend in CAP prices. This would benefit consumers and taxpayers and also is designed to reduce the risk of surpluses.

"Increasingly price proposals are being related to the costs of efficient producers and the supply/demand situation, and this approach is reaffirmed in the Commission's Report on the CAP stock-taking.

"On the 'greater flexibility for special circumstances and improved systems of market regulation, especially beef', the Minister has secured changes for beef under which member-States are no longer obliged to maintain high prices for producers by buying beef into store and denying it to consumers. Instead, they can let it go to consumers at reasonable prices and make up returns to producers by deficiency payments partly financed by the Community.

"In addition special encouragement has been given for sugar production in the United Kingdom. More generally the monetary arrangements have been used to differentiate the percentage price increase between member-States. There has been more flexibility in the use of national aids.

"On the 'requirements of measures to discourage surpluses and to pay more regard to consumers', the downward pressure on CAP prices is itself a safeguard against surplus production—together with our proposals, now being pursued, for the reduction of support buying prices for milk products and cereals when surpluses start to arise. Then there is the recent practice that any surpluses which do develop are run down by cheap supplies to Community consumers rather than being unloaded on world markets. We have had this in the beef subsidy for pensioners and in the increased butter subsidy. British consumers again benefit from the monetary import subsidies paid to countries which have devalued, and from special measures to keep Community prices below world prices, particularly the sugar import subsidy which is financed by the Community.

"On the objective of 'improved financial control' some progress has been made—better estimates of costs and budgetary implications of new proposals, tighter monitoring of expenditure and the introduction of precautions against fraud.

"On 'access for third-country food stuffs', in 1971 we condemned the failure to provide security for Commonwealth Sugar Agreement producers. We constantly criticised the lack of arrangements for Commonwealth Sugar Agreement supplies after the end of 1974, which in fact turned out to be a time of world sugar famine—hence the crisis we faced. But we have now got assured access for up to 1.4 million tons of sugar from developing countries, for which we pressed from 1971 onwards, so this objective has been achieved.

"During this period of shortage British refiners and manufacturers have purchased 170,000 tons of sugar to maintain continuity of supplies with the aid of Community subsidies of £36 million.

"On 'access for New Zealand dairy produce', in the autumn of 1974 we secured an increase of 18 per cent. in the prices paid to New Zealand to ensure continued supplies, and at Dublin we got agreement on the broad lines of the continuing arrangements for access of New Zealand dairy produce after 1977.

"No commitments had been made in 1971, but so far as butter is concerned, the Commission have been instructed to prepare in the next three or four months a draft based on the maintenance of butter imports from New Zealand to Britain at around the level of 1974–75 deliveries, together with price proposals to which the New Zealand Government attach the greatest importance.

"On cheese, the Protocol to the Treaty of Entry ruled out any more access for New Zealand cheese of the kind provided for in 1973–77. But last week's statement has left the matter open and we have given notice that we shall pursue it in the Protocol 18 review. We shall press this very hard.

"Improved access for other food-stuffs has been secured as a result of GATT negotiations, the trade sections of the Lomé Convention, the Mediterranean Agreement and the Community's 1975 Generalised Scheme of Preferences, which has now been agreed. Improved access, too, for tropical oils, Canadian Cheddar, soluble coffee and lard, though no achievement yet on access for certain other foods such as canned fruit and hard wheat. We have requested levy-free quotas for hard wheat and flour, and put on record that we shall at an early date seek elimination or reduction of the tariff on New Zealand lamb.

"Objective Two

Community Budget

"The Manifesto commitment was: New and fairer methods of financing the Community budget. Neither the taxes that form the so-called 'own resources' of the Communities, nor the purposes mainly agricultural support, on which the funds are mainly to be spent, are acceptable to us. We would be ready to contribute to Community finances only such sums as were fair in relation to what is paid and what is received by other member countries.

"It rapidly became clear that we could best secure our objectives not by seeking to overturn the system of financing the budget from 'own resources' but by correcting its unfair impact by a mechanism which would provide a refund to us.

"I reported to the House a week ago, and set out the corrective mechanism proposals which, as I said, were an improvement on the Commission's proposals, and which satisfactorily met what we then proposed, involving a refund of up to £125 million a year.

"Objective Three