HL Deb 10 April 1978 vol 390 cc348-57

4.10 p.m.

Lord PEART

My Lords, with the leave of the House I will now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:—

"With permission, I should like to report to the House on the meeting of the European Council in Copenhagen which I attended at the end of last week with my right honourable friend the Foreign and Commonwealth Secretary.

"The Council expressed to the people of Italy its distress at the cruel abduction of Signor Aldo Moro in Italy. There was agreement on the need for close co-operation among the Nine in countering terrorism and to reach conclusions on the proposals put forward by President Giscard with the aim of improving judicial co-operation among the Member countries.

"The nine Foreign Ministers, meeting separately for part of the time, reviewed a number of current international problems, including the current position in the Middle East. The Council deplored all recent acts of violence in this area and the events in Southern Lebanon, and expressed support for the new United Nations force and for the integrity of the Lebanon. The Council emphasised that the momentum of the peace process in the Middle East should he maintained with a settlement based on Security Council Resolution 242 in all its parts and on all fronts.

"A statement was issued by the Council supporting efforts of the five Members of the Security Council to bring about a peaceful solution to Namibia. My right honourable friend the Foreign and Commonwealth Secretary gave an account of recent developments in Rhodesia and the Council expressed their continuing support for a satisfactory solution based on the principles of the Anglo/American plan.

"On Community affairs, the Council agreed that the legislative procedures in the Member States were sufficiently advanced to select the dates of 7th to 10th June, 1979, for the first direct elections to the European Assembly. Each Member State will choose its customary day of the week. For Britain that would be Thursday, 7th June, 1979. The Council adopted a declaration on democracy re-affirming the link between membership of the Community and the observance of democratic principles, which is valid for both present and future Member States.

"Following the "Amoco Cadiz" disaster on the French coast, the Council called on Member States to adopt common attitudes in preventing pollution of the sea and, in particular, to co-ordinate action on compulsory shipping lanes and on effective control over vessels which do not meet the minimum standards for the operation of ships.

"It was agreed that a European Foundation should be established in Paris to promote cultural and other contacts within the Community.

"The main focus of our discussions, however, was on the unemployment of both human and material resources within the Community. The growth rate of the Community during 1977 was 1.9 per cent. and it was agreed that we should develop a common strategy designed to reverse this unsatisfactory situation. The strategy should cover five broad areas —economic and monetary affairs, employment, energy, trade and relations with the developing world—similar to those I recently suggested to President Carter as areas in which the industrial world needs to take collective action. It is the Council's view that agreement in these fields would be an important contribution to world economic recovery, higher economic growth and the creation of new jobs. The Council laid stress on the need to prevent inflation as part of the same objective.

"It was decided to aim for a Community growth rate of 41/2 per cent. by the middle of 1979 and to define the margin of manoeuvre that would be open to Member States as a result of co-ordinating their actions. The possibilities should be known when the Council next meets in Bremen in July. It was agreed to recommend a doubling of the capital of the European Investment Bank.

"An improvement in the general employment situation would be a key objective of such a common overall strategy. The Council agreed to examine whether work-sharing measures should have a supplementary part to play in alleviating the present grave employment problems.

"There was a discussion on the European aspects of what are called "industries in distress" and agreement to set up tripartite committees on a European basis made up of Governments, employers and trade unions to overcome the serious problems of structural overcapacity and to restore the industries to world competitiveness.

"Work is being set in hand on these matters and on the imbalances of current account surpluses and deficits which lead to currency instability; as well as on measures to reduce demand and increase supplies of energy in the Community. It was also recognised that there is a need to reach a successful conclusion on the present multilateral trade negotiations and for an overall increase in capital flows to the developing countries.

"It is intended that conclusions on these matters should be reported to the next European Council in Bremen early in July. This meeting will be followed by an economic summit meeting between the United States, Canada, Japan, Germany, France, Italy and the United Kingdom in Bonn on 16th and 17th July. It will thus be possible to present a European dimension to the wider summit. I am glad to say that the agreed statement announcing the wider summit also recognises the need for concerted and mutually supportive action in the main areas I have mentioned, and the participants agree to develop their policies so as to take account of this, both in preparing for the July meeting and in any action they take meanwhile. The Budget to be introduced by my right honourable friend the Chancellor of the Exchequer tomorrow will take this into account.

"This recognition of common purpose must now be reflected in the work that will take place and must lead to concrete action in the coming months and at the July summits. The discussions so far held with Heads of Governments within and outside the Community have now to be made effective by policy measures which, taken together, will offer the best chance of bringing about a change in the direction of the world economy, and an improvement in world confidence."

My Lords, that concludes the Statement.

4.19 p.m.

Earl FERRERS

My Lords, we are grateful to noble Lord the Lord Privy Seal, for having repeated that Statement. Like all Statements of this nature, it refers to generalities rather than to detail, and, while generalities are welcome as objectives to aim for, the difficulty comes in their implementation as between one country and another or corporately. I would share in the regret expressed by the Heads of Government over the abduction of Signor Moro. It is a sad reflection on our civilised society, in which we take great pride, that there are throughout the world those who are shown to be quite ruthless in determining to overturn regularised society for their own ends and by any means. Our sympathy goes to the people of Italy and to the family of Signor Moro and we are grateful to know that the Heads of Government are determined to use all in their power to redress this drift which has taken place.

We welcome the date of the elections to the European Parliament. These have been long delayed and we are glad to know that there is now a fixed date for June of next year. I would also welcome the declaration on democracy to which the Statement referred. It is an important statement of policy, and we are glad to see it reaffirmed that there is no part in the European Community for countries which are or have become one-Party States.

The Statement covers a very wide ground. I shall restrict myself to two areas on which I should like enlightenment. The first is that the Statement mentioned Rhodesia in a passing but important way. It said that the Council expressed their continuing support for a satisfactory solution based on the principles of the Anglo-American plan. I should like to ask the noble Lord whether this means that the European Council welcomed the proposed settlement in Rhodesia, or does it mean by implication that they rejected it because it does not conform to the exact pattern of the Anglo-US proposals? When the Statement refers to a satisfactory solution, will he explain to whom that is supposed to he satisfactory? Is it to our Government, to the United States Government or to the people of Rhodesia? Presumably it is to the people who live in Rhodesia, and presumably it is satisfying to them as it was a settlement agreed internally. Is it therefore the philosophy of the Heads of Governments that, even though a solution may be satisfying to those living within Rhodesia, it should nevertheless be considered unsatisfactory if it does not meet the requirements of those living outside Rhodesia? If so, will the noble Lord say on which of the Six Principles the Heads of Government considered the settlement to he unsatisfactory?

The second area upon which I should like enlightenment is the economy. How much real agreement was there on currency problems? Did the Heads of Government accept that the resolution of the European Economic Communities' currencies was dependent upon the resolution of the dollar problem or did they consider it a problem which was internal to the Community? The Statement said that the growth of the economy during 1977, which finished only four months ago, was 1.9 per cent. I think that the Finance Ministers agreed last month that the objective should be that by mid-1979 there should be an average growth of 41/2 per cent. Already in the Statement which the noble Lord has given us that has been altered to achieving a growth rate by mid-1979, as opposed to an average for the year, of 41/2 per cent. It is difficult to see the practical application of such declarations if they are altered so substantially within a month.

Will the noble Lord the Lord Privy Seal agree that, while such declarations are important, we can contribute little to the solution of this corporate problem until we put our own house in order; and that so long as we create conditions in this country where incentive is discouraged, and where it pays people better not to work than to work, it is difficult for us to be able to solve our own economic problems without contributing to the solution of the European Communities' problems? Will the noble Lord say whether he agrees with that and, if so, how he proposes to rectify the problem exercising us?

4.24 p.m.

Lord BANKS

My Lords, I should like to join in thanking the noble Lord the Leader of the House for repeating the Statement which has been made in another place. While we on these Benches regret that the original target date of 1978 for direct elections to the European Parliament has not been achieved, we welcome the fact that a firm date has now been fixed and that Thursday, 7th June 1979, is to be the date on which these elections will take place in this country.

I should also like to welcome the declaration on democratic principles, linking the membership of the Community with the adherence to the principle of democratic government. I think that this is important at a time when enlargement is in prospect, both as a reminder to the existing Members and to the prospective Members of the basic nature of the Community. I wonder whether the noble Lord can tell us whether the Heads of Government have considered the decision-making process of the Community in the light of enlargement, and what may be necessary in the way of its reform. I am quite sure that the whole House will join in sharing the distress which was expressed by the Heads of Government about the abduction of Signor Moro. We remain convinced that terrorism and abduction of this kind requires a calm but determined reaction. I welcome the support once again on the part of the Government for a solution of the Middle East problem on the basis of Resolution 242 of the United Nations.

A great deal of time at the Summit Meeting appears to have been taken up with discussion of economic matters, and understandably so. We welcome the determination to work for a growth rate of 4.5 per cent. by the middle of next year. We understand from Press reports—and, indeed, it is touched upon in the Statement—that much attention was given to monetary matters. Mr. Jenkins, as President of the Commission, put forward proposals for linking the currencies within the "Snake" in a flexible way with the currencies of other Community Members outside the "Snake". I wonder whether the noble Lord can tell us a little more about what has been decided in that respect.

4.28 p.m.

Lord PEART

My Lords, first may I take the point raised by the noble Earl, Lord Ferrers, which was taken up by the noble Lord, Lord Banks, concerning the declaration on democracy: in other words, the admittance of other States, Greece, Spain and Portugal, into the Community. I would say to the noble Lord, Lord Banks, that obviously there are problems there. Naturally, such a decision will create problems and these must be sorted out if the Community is to be enlarged. I know that in a particular area in which I was previously concerned, when I was at the Council of Ministers concerning agriculture, inevitably there will be problems of a very important kind affecting the economy of all the countries, including our own. These are matters which have certainly been discussed by those people who have specialist tasks to perform in relation to achieving a satisfactory solution.

The noble Earl, Lord Ferrers, referring to Rhodesia, asked what our aim is there. He talked about a satisfactory solution and asked for whom was it to he a satisfactory solution. Of course it is to the Anglo-American alliance, the Council of Europe, the people of Europe and of the world. This is our aim. We want peace there and a satisfactory solution. We think that what we have proposed is the only way we can achieve it. Of course that has been elaborated here on many occasions.

On currency problems the noble Lord, Lord Banks, raised a matter which was referred to by Mr. Jenkins as President of the Commission at the talks; the question of the Snake. I understand that there is an interest in this point. As my right honourable friend the Prime Minister will agree, the position of the dollar is at the heart of our world currency problems. The difficulties which have been mentioned are important; but, for the moment, I believe that the position of the dollar is at the heart of the world currency problems. Again, I accept what has been said about the Middle East by the noble Lord, Lord Banks. That was endorsed by the, noble Earl. Above all, these talks were fundamentally about economic matters. I am not underestimating the political issues which were raised. But unemployment in the Community and trade— and world trade in particular—are matters of great concern.

The noble Earl had his little "dig". The Government have been trying—and I as a Minister have been trying—to create a new situation in this country, and to reverse the trends which took place in our economy long before we took power. The road is going to be a long one, but we can see the way ahead now. There has been a change in the economic climate. There are still problems, but I suggest that the noble Earl, in his desire to score debating points—quite rightly, if he so wishes—should await the Budget speech of my right honourable friend tomorrow.

Lord HOME of the HIRSEL

My Lords, I accept of course that the Government's objective is peace in Rhodesia; but would the noble Lord accept that the settlement in Rhodesia and the ultimate grant of independence is a matter solely for the British Parliament? Could he give an assurance that the Government are not trying to farm off, either on to Europe or the United States, the responsibility for a settlement of this kind?

Lord PEART

My Lords, that is absolutely right, and I give that assurance to the noble Lord.

Lord NORTHFIELD

My Lords, may I ask my noble friend two brief questions? In the discussion about elections to the European Parliament, did the summit discuss a permanent seat for the European Parliament and, if so, have they made any progress on it? We have been waiting for a decision on this for a very long time. Secondly, in relation to the European Cultural Foundation, did the summit make not just a decision in principle but did they actually vote funds for it and show how it could be put on the road to success?

Lord PEART

My Lords, I know there is concern about this matter of the seat, whether it is Luxembourg, Strasbourg or Brussels. I do not think it was discussed: I get that impression. This meeting was mainly to discuss economic matters, as I have said. On the other hand, there were discussed such matters as the Cultural Foundation. I do not think any funds, as such, have been allocated, but it has been stated in principle as a desired objective.

Lord HARMAR-NICHOLLS

My Lords, is the noble Lord aware that the fact that our unemployment is so much worse than that of countries which are our main competitors is not a debating point or a Party political point? It is a fact of life; and the reason why it is essential to keep referring to it is because, if the Government, which have the power, are suggesting that this is a world problem, without recognising the special problem which is ours, then we cannot feel that they are on the right track for getting us out of trouble.

Lord PEART

My Lords, the noble Lord must accept that there are some problems which are common to a lot of people in Europe and all over the world. The steel industry is one classic example. It is not just peculiar to this country. I take a great interest in this as my former constituency was concerned with steel. This is a world problem, and some of our difficulties were there when the noble Lord was an active supporter of a Tory Government in another place. We are trying to overcome these problems and we think, given goodwill and co-operation between all concerned—after all this affects industry, trade unions and the general British public—that we can overcome these difficulties. We have to, otherwise, it will be disastrous not only for us but for the world and for Europe.

Baroness GAITSKELL

My Lords, noble Lords opposite keep saying that our unemployment figures are much higher than those of countries in Europe and other parts of the world. I do not believe that is so. Is it really so, and could we not have an answer on this point, with figures?

Lord PEART

My Lords, I am prepared to get figures for European and other countries and I will write to the noble Baroness; but our position is certainly no worse than that of other countries. In fact, when you consider the progress that has been made to counteract inflation, we have a success story.