EUROPEAN COMMUNITIES (DEFINITION OF TREATIES) (ECSC DECISION OF 9TH APRIL 1979 on SUPPLEMENTARY REVENUES) ORDER 1979 (Hansard, 19 July 1979)

Viscount LONG

My Lords, on behalf of my noble friend Lord Trefgarne I beg to move that the draft European Communities (Definition of Treaties) (ECSC Decision of 9th April 1979 on Supplementary Revenues) Order 1979, laid before the House on 5th July 1979, be approved. The order specifies as a Community Treaty the decision taken at the Council of Ministers on 9th April 1979 to allocate supplementary revenues to the 1979 budget of the European Coal and Steel Community.

If the House approves this order, it will formally define the decision of the Council of Ministers as a Community Treaty. I should like briefly to set out the legal basis for the procedure which we are undertaking, although I believe that some noble Lords will be familiar with it. The order will define the decision of the council as a Community Treaty under Section 1 of the European Communities Act 1972. This was the enabling Act passed when this country joined the European Communities. Approval of the draft order will allow the Government to make the necessary payment to the ECSC under the powers conferred by Section 2(3) of the same Act.

The object of the Council decision specified in the order is to provide the European Coal and Steel Community with 1591 the additional revenue needed to make good an anticipated deficiency in its budget for 1979, resulting from the increased expenditure arising out of the steel recession. As the House will know, the steel industry has been hit by a sharp fall in demand, at a time when world steel production capacity had been greatly increased to meet an anticipated level of demand which failed to materialise. The industry has suffered accordingly.

At the Foreign Affairs Council of Ministers in December last year, the Commission therefore requested a supplementary contribution from member States of 60 million EUA (European units of account) to the 1979 budget of the ECSC. Most member States considered this to be an excessive demand but, after a discussion prolonged over several months, it was agreed, subject to the completion of the necessary national Parliamentary procedures, that a supplementary contribution of 28 million EUA should be raised. Member States also agreed that each should pay the same percentage of the sum as for the similar contribution made to the 1978 budget. In the case of the United Kingdom this is 4.87 million EUA. The decision was finally taken without further discussion at the Council of Ministers on 9th April 1979.

The steel recession has of course seriously affected employees of the steel producers, a very large number of whom have been made redundant throughout the Community. The short-fall in the budget for 1979 has arisen to a substantial extent as a result of the Community's intention to supplement national measures designed to alleviate the impact of the recession on these men. As the House may know, those who are made redundant qualify for settlement aid. This takes a number of forms: grants are made towards retraining, additional unemployment benefits are paid and for a period the earnings of people employed in new jobs outside the steel industry are made up to the level they received before they were made redundant. The 1979 budget allocates 67 million EUA under the heading of resettlement aid. The provisional allocation to the United Kingdom out of this total is 14 million EUA or £8.82 million. This is the second highest allocation for any member State and is over £1 million more than the allocation for 1978.

1592 The Community does not of course only provide resettlement aid. As noble Lords know, it also has policies for encouraging the creation of alternative employment outside the coal and steel industries for redundant workers. Loans raised by the Commission by borrowing at the cheapest rate of interest prevailing on the money markets are on-lent with an interest rebate, generally of 3 per cent. over five years, for projects providing employment for redundant coal and steel workers. In 1979, it is expected that a total of 15 million EUA for the ECSC budget will be used throughout the Community for such interest subsidies. It is not possible to say how much of the sum will be used for projects in the United Kingdom but so far this year loans for three projects in this country have been approved. These will provide new employment opportunities. Other applications for loans with interest relief are being considered.

The ECSC budget also provides loans towards new investment in coal and steel projects. Grants are made for research into new production processes as well as into pollution control and the improvement of safety. Of the steel research budget, £1.41 million or 11.5 per cent. of the total of £12.3 million has gone to BSC. As for the coal industry's research programme, allocations of £4.9 million have been made to the NCB and £1.1 million for safety and health, out of total allocations of £10.7 million and £6.3 million respectively.

Noble Lords will be aware that the ECSC's traditional source of income is the levy on coal and steel production, the percentage yield of which remains at 0.29 per cent. This year, it was again judged inexpedient to raise this level, bearing in mind the present financial pressures on producers. Nevertheless, there are great demands on the ECSC budget in the current situation. If the ECSC budget were not to be supplemented, the activities of the Community would have to be curtailed. I believe that noble Lords would agree that this would not be advisable. Accordingly, I seek approval for the draft Order in Council. I beg to move.

§ Lord GORONWY-ROBERTS

My Lords, the House will be extremely grateful to the noble Viscount for the clarity with which he has moved this important order. On the principle that one good speech is quite enough, even for this House and even on such a fascinating subject as this, I shall confine myself to just one or two points. The opposition of course approves the order and joins with the Government in hoping that the House will pass it. We shall look forward to studying the noble Viscount's speech in Hansard—if we are lucky enough to have one—and particularly to studying the extremely important and useful figures he has given about contributions by member States, including the United Kingdom, the percentage of the whole, and the derivation to us, like other member States, in the benefits that we receive.

I have made one or two calculations of my own, but I shall consult the Official Report tomorrow to see whether I have got it right. At random, the House will have heard with satisfaction that our contribution to the 28 million EUA which is now sought as a supplementary estimate is something over 17 per cent. of the whole, while last year, as the noble Viscount reminded us, our receipts on resettlement grants were rather over 20 million EUA. This is an example. I am not arguing that we must break even between contributions and receipts all the time. But the mood of the country, and I think probably of the whole of Western Europe, is that those two calculations must, over a certain period, reasonably come together as one looks back on contribution and receipt as a matter of progress.

I note with satisfaction too that the Joint Committee of both Houses appointed to scrutinise delegated legislation of this kind sees no reason to draw the special attention of this House, or indeed of the other place, to any feature of this order. We are well served by the Joint Committee. It is useful and reassuring for both Government and Opposition to have before them always the definitive report of the Joint Committee as to the status, as it sees it, constitutionally and otherwise, of any Statutory Instrument that comes before the House. I join with the noble Viscount, therefore, in hoping that the House will approve this order.