HL Deb 19 July 1976 vol 373 cc517-29

3.4 p.m.

Lord SHEPHERD rose to move, That this House takes note of the White Paper Developments in the European Communities, November 1975 to April 1976 (Cmnd. 6497). The noble Lord said: My Lords, I beg to move the Motion which stands in my name on the Order Paper and, with the permission of the House, I shall address some remarks to the Motion that has been put down in the name of the noble Baroness, Lady Tweedsmuir. Anyone who has been in Government will know that July is always a bad month, and although I fully appreciate that my first duty is to your Lordships' House, I ask your Lordships' forgiveness if I leave at 4 o'clock to attend a series of meetings. I shall return as quickly as possible.

These two Motions require us, like Janus, to face both backwards and forwards. Backwards, as we review the developments described in the six-monthly report on the European Communities, and forwards as we look at the prospectus for Europe presented by the Belgian Prime Minister, Mr. Tindemans. We need not, I hope, confine outselves too strictly to the material in these reports, but use them rather as the main texts for a more general stocktaking. If I may be allowed a general personal comment, I believe that, hitherto, we have perhaps thought of ourselves and even at times behaved—and been thought of by others—as new boys in the Community. We can do so no longer. Our membership is now 3½ years olds and within six months the United Kingdom will for the first time have the Presidency of the Council of Ministers. We may have an opportunity of seeing the work of the Council of Ministers at close hand because, by and large, its meetings will take place in London. We shall find ourselves very much at the controls: and it is right that Parliament and the Government should now consider the direction in which they think the Community should move. We very much look forward to hearing your Lordships' views this afternoon.

The House will not, I believe, wish me to dwell at any length on the six-monthly report. The developments it describes are many and varied and, to some extent, have already been overtaken by recent events. Noble Lords will probably share my sense of relief that this is so, for it would be misleading to pretend that the period was very successful. Indeed, there were many problems. These were often those of the world at large, especially, of course, those on inflation, monetary instability and economic uncertainty. But when surveying this period we can take advantage of our double perspective. Pessimism would be out of place, since the picture is improving. Some of the failures and half-measures of that time are the successes of the present.

The European Council last week agreed on a formula for direct elections which met the requirements of Member States without creating an outsize Parliament. For our part, the formula satisfies our twin aims of providing reasonable representation for the constituent parts of the United Kingdom and ensuring that the constituencies are not too large. This decision represents a major step forward and illustrates the Community's ability to find acceptable solutions when there is the will to do so.

The Community has weathered the world economic crisis; and Member States are showing their determination to tackle the related and vital questions of restoring full employment and maintaining economic stability, both individually and in concert with each other. The second Tripartite Conference of Governments, the social partners and the Community's institutions, held on 24th June, expressed the Community's joint efforts in this respect, and its conclusions, which were approved by the European Council, will be carried forward over the months ahead.

It is appropriate at this moment to turn to the Tindemans Report, whose presentation during the period covered by the White Paper was a major event and one which focused sharply on the future. I should like again to congratulate the noble Baroness the Chairman of the Scrutiny Committee of this House and her Committee on their most helpful report on the Tindemans Report. It was a model of its type. We consider that M. Tindemans has provided a very valuable reference point for our own thinking about the future of the Community and our objectives in it. This is a large subject and not one which can be covered in a single debate. The Community itself is devoting many months to a study of the Tindemans Report, and the Government do not intend to take a final view on it until we have had the views of both Houses and have discussed the report within the Community a good deal more than we have been able to do in the past. But I would assure the House that we shall take a constructive position in these discussions.

My Lords, I shall touch only briefly on a few aspects central to the Community and to our membership of it. There is the matter of the promotion of economic convergence between Member States. M. Tindemans perceived this very clearly, and we shall wish to build upon existing Community mechanisms—such as the Regional Development Fund and the Social Fund—which are intended to assist this process by transferring resources from the richer parts of the Community to the poorer. Of course we cannot, and should not, expect an endless flow of resources. There is a great deal for us to do at home, but I am encouraged by the political will demonstrated by Finance Ministers to concert national economic policies and to co-operate closely within the Community to bring about closer convergence of its constituent parts. This is very much in our interests.

We hear a great deal these days about interrelationship. There is a clear and close connection between the economic performance of the Community and its social policies. Unemployment, which the Community is tackling in various ways, is an obvious and crucial example of this. More generally, M. Tindemans rightly emphasises the importance of making progress towards a modern society and a form of economic growth which respects human values and social needs. The Government certainly endorse this, and we consider it essential increasingly to involve the social partners in Community-level discussion of policies or issues which directly affect their interests.

The Tripartite Conference is one forum in which such discussions take place, and its value was recognised by the European Council last week. The Standing Committee on Employment, which M. Tindemans singles out in his Report, has been charged with certain tasks arising from that Conference. The Regional Development Fund, in the period covered by the White Paper, made commitments to the United Kingdom totalling more than £56 million—or approximately 28 per cent. of the total budget—to assist the development of projects in disadvantaged areas of the United Kingdom. The successful development of the Community will depend on the continuation of policies of this kind, and we share M. Tindemans' view of the need to improve the Community's institutions.

The House will be aware of the initiative at the European Council last week, as a result of which the new President of the Commission, Mr. Roy Jenkins, will be charged with the task of reviewing the structure of the Commission. This is, of course, only one element of the Community's institutional structure. I am sure that my noble friend Lord Goronwy-Roberts will have more to say about this and other aspects of the Tindemans Report when he replies to the debate.

So far I have singled out internal policies in my survey of the Community. On the external side, one of the more visible successes of the Community during this period has been the development of common policies and the adoption of common positions on a number of foreign policy issues. We regard this as among our foremost objectives, and we will pursue our original aim of seeking to ensure that the Community is outward-looking and that its external relations give full weight to United Kingdom interests. In this context the revision of the Common Fisheries Policy is of prime importance to us, as a policy whose implications will have direct and immediate bearing on the Community's and our own positions at the Law of the Sea Conference, and in meeting the needs of our own fishermen.

The Community must quickly come to terms with a world in which 200-mile fishing limits are general; and the House will know that my right honourable friend the Prime Minister made clear to the European Council our desire for a declaration of intent on the extension of Community fishing limits to 200 miles. We shall follow up this matter vigorously, and the House will have an opportunity to debate it in full on 28th July. In addition, in the period covered by the Report we have worked successfully towards forging common positions in the Conference on International Economic co-operation, or the North/South Dialogue as it is sometimes called, and in the Euro/Arab Dialogue.

Community agreements have been concluded with a large number of countries such as the Maghreb agreement and agreements with the countries of the Indian sub-continent. Others with Canada, Iran, the Mashraq countries, Spain and the Comecon countries are under consideration or negotiation. The Community has developed common positions on a number of foreign policy issues. On the Cyprus problem, the Nine have been working as one for a settlement; it is a long way away, but we are still working on it. They have made progress with common positions towards the problems of Southern Africa.

The Lomé Convention between the European Economic Community and the 46 developing countries from Africa, the Caribbean and the Pacific was signed on 20th February 1975 and came fully into effect on 1st April 1976 following ratification by all Community Member States and more than two-thirds of the developing countries concerned. The Convention runs until 1st March 1980. It provides generous concessions in the fields of trade and aid to the developing signatories. The trade provisions which entered into force last August under interim arrangements give the ACP preferential tariff—and quota-free access to the Community for all their industrial products and practically all agricultural produce. The only obligation placed upon the ACP is that they must treat the Community at least as generously as any other developed country and must not discriminate among the nine Community Member States in trade matters.

In the aid field, the Convention establishes the fourth European Development Fund, under which over 3,000 million units of account (some £1,700 million) will be reserved for the ACP countries over the remaining four years of the Convention. The European Commission has sent programming missions to most of the ACP States. Reports have been produced on some 30 missions and indicative programmes have been drawn up. There is additionally a sound working consultation relationship with the United States. Looked at in a historical perspective, the Nine have moved a long way towards common positions in world affairs since our accession.

None of this justifies the view that is sometimes expressed that the Community is in a state of collapse. It is here to stay, and with every day its reality becomes more established. Equally established is the fact of United Kingdom membership of that Community. Perhaps it was inevitable, as the anniversary of the Referendum came and went, that there would be people who would try to resurrect the argument over whether or not it is to the advantage of the United Kingdom to be a member of the Community. I do not think the country as a whole will give them any encouragement for doing so. The people gave the clearest verdict last year. What is now needed is to give the fullest attention to making the most of the opportunities Community membership offers both to further United Kingdom interests and to influence the Community's future development. So far as this House is concerned, we can fairly claim to be setting an example of the advice I have just given.

Before closing, I will once again pay tribute to the work carried out by the noble Baroness, Lady Tweedsmuir, and the other Members of the Select Committee on the European Communities. Not only have they scrutinised with their customary speed and efficiency a large volume of day-to-day legislative and other proposals: they have also produced well-informed reports, and reports of very great clarity, on some of the more important topics being considered in the Community, on which we had a total of eleven debates during the period reviewed by the White Paper.

These debates, and the reports on which they were based, have covered many of the issues to which the six-monthly White Paper refers: such diverse subjects as EEC company law proposals, the budgetary powers of the European Parliament, problems of nuclear safety and the EEC farm prices proposals. The Committee have continued to perform a most valuable service, and have played a major role in enabling this House to pay full attention to events in the Community, which these events require. These reports may have been of great value to your Lordships' House, but may I put on record that they have been of extreme value also to Her Majesty's Government.

My Lords, in considering the documents before us it is apparent that our future and that of the Community are bound up closely together. Our own problems are the Community's problems, and we can and should take full advantage of the Community's resources and policies in our efforts to resolve them. It is equally true that the Community's problems are our problems; and it is our task to make whatever contribution we can to their resolution and to the achievement of progress in Europe, which is inseparable from progress in the United Kingdom.

The White Paper and the Tindemans Report chronicle some of the steps to be taken and suggest others which may be considered. It is for Parliament to consider those proposals; it is for the Government to consider the advice given and then to negotiate, not only in the interests of the United Kingdom but in the interests of the European Community as a whole. My Lords, I beg to move.

Moved, That this House takes note of the White Paper Developments in the European Communities, November 1975 to April 1976 (Cmnd. 6497).—(Lord Shepherd.)

3.22 p.m.

The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness Tweedsmuir of Belhelvie.)

My Lords, I am very glad indeed that we are able to debate these two documents together; and on behalf of my Select Committee I should very much like to thank the noble Lord the Leader of the House for the generous tribute he has paid to the many Peers—I think we are nearly 80 in number now—who give of their time and experience to what is without doubt fascinating work. We feel that we owe a debt to those who gave us our terms of reference, because they are wide enough for us to look at the larger questions which confront Europe and not only the rather smaller legislative matters which come before us from time to time.

I should like, first, to congratulate the Government on having reached what I believe to be a fundamentally important decision for this country; that is, that we should have direct elections to the European Parliament. I think myself that an increase from 67 seats for Britain, which is what was originally thought of to 81 can but benefit the United Kingdom as a whole; and it will also offer the chance to ensure larger representation of, the component parts of the United Kingdom. I would hope, for example, that Scotland will have at least ten seats when this comes to be decided. But I noticed that the Secretary of State for Foreign and Commonwealth Affairs did not commit himself to this country definitely taking part in direct elections on our own system, first past the post, in the time approved by the other Governments, with one reservation by Denmark; that is, in May or June 1978. I would only say that surely the sheer horror of appointing 81 Members of both Houses would urge the Government to speed the preparation, above all because nominated Members would not have the same authority as elected Members.

It is my privilege to present on behalf of the Select Committee our report on the Belgian Prime Minister's Report on European Union. He is rather sad in his introduction. He sometimes seems to reflect the way in which many people look at the European Community today. He says: Why has the European concept lost a lot of its force and initial impetus? He goes on: The European idea is partly a victim of its own successes: the reconciliation between formerly hostile countries, the economic prosperity due to the enlarged market"— this may sound odd today but, taken from the start of the Common Market, this is true— the détente which has taken the place of the cold war, thanks particularly to our cohesion, all this seems to have been achieved and consequently not to require any more effort. He goes on to say: Our peoples are concerned with new problems and values scarcely mentioned by the Treaties. … We must listen to our people. What do the Europeans want? What do they expect from a united Europe? The Tindemans Report on European Union considers there are two main urgent matters which we must achieve if we are to promote unity among the Nine. First, direct elections to invigorate the Community's institutions; and, secondly, a common effort to fight inflation and recession. The Select Committee are particularly glad to have had a chance to consider this report, which is of undoubted political importance. The House may be aware that we, as a Scrutinity Committee, have long been almost buried under the draft legislative matters which we are asked to look at in detail. They seem to deluge us from time to time. Therefore, the work involved in study and in taking evidence inevitably means that we see only a part of the work of the Community; and the Select Committee have thought it important to examine the direction being taken by our partners and ourselves in Europe so that we can, maybe, get ideas on how this country can share in the shaping of Europe.

The Tindemans Report is especially interesting in that the Belgian Prime Minister is himself a federalist, although he has sought to say how we can cooperate by pragmatic means, and suggests certain practical ways in which we can achieve greater unity. Yet his report reflects the fear that the European Community has lost its force, and the object of his report is to suggest how the cohesion and power of the Community, as conceived in the original Treaty, can be enhanced. At first sight the Tindemans Report seems to suggest a two-tier community, comprising those States who have the power and the will to forge ahead and those who will need aid and help to catch up.

This conception of a two-tier Community has, however, been denied both in public and in private. Mr. John Davies (who, as the House will know, is chairman of the Select Committee on the European Communities in another place) and myself had the privilege of meeting Mr. Tindemans about his report, and we asked him why he thought it had been coolly received in the capitals of the Nine. He said that he had had to try to find a middle way between federalists and those who believe in the evolution of common policies. But, my Lords, even evolution must be stirred by energy and by beliefs. Had the United Kingdom been a member in the earlier years many of the problems which now seem so hard would not have existed. We should have built Europe together.

My Lords, as the House will appreciate, the Select Committee Report is a work of many minds. We have studied and commented upon the various sectors of the Tindemans Report and the order in which he fashioned them. There are a few omissions. One of them is rather extraordinary. Very little is said about the Common Agricultural Policy which takes up three-quarters of the budget. But the kernel of the Report so far as foreign affairs are concerned is this sentence: European union implies that we must present a united front to the outside world. I should have thought that it was on this, from whatever quarter we came, that we would all agree. But when one examines the implications of security, of economic relations, of development aid, it does not always work out without some traumas.

There is a closer relationship developing now between the larger States of the Nine except where Italy's lack of effective political leadership has at present caused a vacuum. But this has caused some resentment among the smaller States. A recent example was the acceptance by the so-called Big Four of President Ford's invitation to the Puerto Rico Summit; without direct representation for the smaller nations or even of the Community as a whole. Of course, we must work with the Americans in every way, but Europe as a whole is our prime concern. So if the unity of Europe is vital to all our interests, it surely is important to study the institutions which govern all that we do. The Tindemans Report contains an important chapter on the action that can be taken within the Treaties and those which, in his opinion, should precede an Act amending or extending the original Treaties. We are much indebted to the noble and learned Lord, Lord Diplock, and his sub-committee for his careful analysis of this section of the Report. But it seems to many of us that much could be done by strengthening and improving the performance of the existing functions of the Community.

To be frank, the order and priority of some of the documents that come before your Lordships' Select Committee seem to lack both rhyme and reason. We have discovered that there is no central body which decides on priorities or defines the scope of possible action and its policy consequences. There is, in fact, no central policy review body; there is no European "think tank". I, for one, am absolutely delighted that the right honourable gentleman the Home Secretary is to become the next European Commissioner. I should like to wish him every success and also happiness in an absorbing task; but I should like to ask the Government whether the Tindemans Report recommendation that the President should choose his own commissioners has been accepted. It seems to make sound sense.

I understand that Mr. Jenkins has been asked to examine the work of both the Commission and the Council of Ministers. It would obviously give him greater support in his work if he had a freer hand to choose his 13 commissioners. They are due to retire at the end of the year. Many are active politicians; and, while they swear fealty to the European ideal, they are, of course, nominated by their national Governments and therefore, being human, they are bound to ponder on their future as to what happens to them at the end of their four-year term.

As the House knows, there are now 20 directorates-general. One cannot help feeling that these should be greatly reduced. Mr. Michael Shanks, who formerly served the Commission, has suggested that there are really only six major areas of policy which could be grouped under six directorates-general. In the present structure, as the House knows, five of the 13 commissioners are named as vice-presidents and, therefore, one could have a kind of inner political cabinet so to speak. This could be composed of the vice-presidents and the president with the commissioners remaining heading a re-grouped number of directorates-general. These are ideas which are aimed at securing some method of decision on priorities and the avoidance of harmonisation in small matters which cause irritation in the public and can hardly help towards the unity of Europe.

In any case, I am sure there should be an organisation to serve the Commission in research and on long-term forecasts and priorities. The Commission itself asked for a study to be made two years ago, called Europe plus Thirty. The distinguished chairman was the noble Lord, Lord Kennet, who I am glad to see is to speak later. Many able people took part in that study; but I understand that the Commission will not decide whether to accept the ideas of this project team until the autumn.

In the meantime, two weeks ago, I had the honour to represent the noble and learned Lord the Lord Chancellor and your Lordships' House at a conference of Presidents of Western European Assemblies. I was accompanied by the Clerk of the Parliaments who gave me invaluable assistance. From the other place came Mr. Speaker himself—and Mr. John Davies because there were many subjects on which it was unsuitable for Mr. Speaker to take part. Among other things it was proposed to recommend that there should be an "institute for research" which seemed to me—and I dared to say so—to overlap work already commissioned by the Commission on which they had not yet made a decision. But the more interesting proposition, perhaps, came from the President of the Bundesrat who proposed a "Chamber of States" with members nominated by the national Governments of the Nine to act as check and balance to an elected European Parliament.

There is no doubt that elected Members will at once ask for increased powers. As this can only come about by the unanimous decision of the Council of Ministers, the relations between the Council and the Parliament will be of paramount importance. As we have no European Government, the implications for national Parliaments will, I am sure, be long debated and we shall have many other opportunities to debate them. But European union, as such, can come about in the end only if the 250 million people now represented in the Community understand it and want it to succeed. It seems to me that the two problems which fill their minds above all else just now are inflation and unemployment. If we could tackle these with success, then, in the words of our report: The EEC will have the added strength of public support based on the broad social and moral objectives of the Community. If Europe so far has no world political reality, let us remember the forces, both seen and unseen, that threaten us on every hand. As President Giscard d'Estaing said to this Parliament a short time ago: For once the wind is not blowing across the Channel—it blows from other quarters, and so brings us closer together. So, my Lords, whatever the shape of European union that we cannot yet clearly discern, I believe that we shall have to achieve it in the end. We need only to stay together and to stay the course.