HL Deb 12 March 1979 vol 399 cc462-8

8.20 p.m.

Lord GORONWY-ROBERTS rose to move, That the draft order, laid before the House on 31st January, be approved. The noble Lord said: My Lords, before I move the Motion standing in my name on the Order Paper I should like to make a comment on the reason why this item on the Order Paper is being taken now and not, as previously indicated, before the debate which we have just held. Noble Lords will be aware that last week a question was raised in another place about the powers of this House as regards Orders-in-Council made under Section 1(3) of the European Communities Act 1972. The question was referred for a decision to the authorities of the other place and, as noble Lords will know, a ruling was given this afternoon that the financial implications of the order are not such as to make its discussion and approval by this House a breach of the privileges of the other place.

I trust that your Lordships will agree with me that, in the circumstances, it was well that we should take the Commonwealth debate first so that the results of proceedings and rulings in another place could have time to mature and reach us in this place. I think that it was necessary, out of respect to the Speaker of the other place, that that should be so, and I hope that your Lordships will agree that I took the correct procedure even though it meant, at very short notice indeed, reversing the position of two items on the Order Paper.

With that word of procedural explanation, I now beg to move that the draft European Communities (Definition of Treaties) (ECSC Decision on Supplementary Revenues) Order 1979 which was laid before the House on 31st January 1979, be approved. The order specifies as a Community Treaty the decision taken at the Council of Ministers on 30th October 1978 to allocate supplementary revenues to the 1978 budget for the European Coal and Steel Community (ECSC).

If the House approves, the order will formally define the decision as a Community Treaty. I know that the noble Lord, Lord O'Hagan, is well versed in this matter, but he will agree with me that I should take one or two minutes to place formally on record what we are doing. The order will formally define the decision as a Community Treaty under Section 1 of the European Communities Act 1972—the enabling Act which we passed when we joined. I believe that noble Lords are familiar with this procedure—I know that the noble Lord who is to speak for the Opposition is very familiar with it—which we have considered on a number of occasions in the past.

The purpose of the Council decision specified in the order is to provide the European Coal and Steel Community with the additional revenue needed to make good a deficiency in its 1978 budget as a result of increased expenditure arising from the steel recession. As the House knows, the steel industry has been hit by a sharp fall in demand, at a time when world steel production capacity had been greatly increased in anticipation of a high level of demand which failed to materialise. The steel industry has suffered accordingly.

In human terms, the main brunt has fallen on the steel workers themselves, a distressing number of whom have been made redundant throughout the Community. The deficiency in the 1978 budget has arisen largely as a result of Community policies designed to soften the impact of the crisis on these men. As the House may know, they qualify for resettlement aid. That takes the form of making up for a period the earnings of re-employed workers to the level they received before they were made redundant, providing additional unemployment benefits, and making grants towards re-training. The 1978 budget provides for an increase of 35 million EUA (European Units of Account) on expenditure in this area. Noble Lords will wish to know that Community reimbursement to the United Kingdom of aids for resettlement is expected to be £7.7 million in 1978 compared with £2.1 million in the preceding year, 1977.

The Community of course provides not only resettlement aid. As noble Lords know, it has agreed policies for encouraging the creation of alternative employment for redundant workers. Interest rebates, generally of 3 per cent. over five years, are given on ECSC loans for projects providing employment for redundant coal and steel workers. A recent example is the interest rebate given on an ECSC loan of £78 million towards the cost of the Ford motor company's projected new engine plant in South Wales. The 1978 budget increased expenditure in this field by 7.7 million EUA.

In addition, interest rebates are available on ECSC loans for coal projects and aid for those steel projects which are considered to be of particular value in restructuring the industry. The Community's objective here is to bring the steel industry's capacity into line with the level of demand forecast in the 1980s, and to improve its efficiency so that it can meet world competition. An increase of 12.5 million EUA is included in the 1978 Budget under this heading. The total of expenditure provided for in this way in the ECSC operation budget amounts to 152 million EUA for 1978. This is some 38 million EUA more than for 1977. This figure takes account of the reduction from 18 to 5 million EUA in the ECSC's contribution to the general EEC budget towards the administrative expenses of the Commission.

Given these plans for increased expenditure, the Community was faced with the problem of deciding how to raise the necessary funds. In view of the difficulties currently facing the steel industry, the Community decided against raising the production levy above its existing level of 0.29 per cent., that is, the production levy on the coal and steel industries by which Community expenditure is financed under the terms of Articles 49 and 50 of the ECSC Treaty. The Council agreed instead, in December 1977, to make up the anticipated 1978 deficit by means of exceptional contributions from member States totalling 32 million EUA, a figure which was subsequently reduced to 28 million EUA. In the event the sum raised by the production levy had increased as a result of a slight improvement in production levels in 1978. So the figure was subsequently reduced to 28 million EUA. The Council subsequently agreed on the contributions that individual member States should make. The United Kingdom will contribute 17.4 per cent. as compared with 21.3 per cent. contributed by France and 33.1 per cent. by the Federal Republic of Germany. Accordingly, I seek approval for the necessary Order-in-Council, and I shall seek to answer as well as I can any points of clarification or detail which the noble Lord. Lord O'Hagan, or any other noble Lord may care to raise.

Moved, That the draft order, laid before the House on 31st January, be approved.—(Lord Goronwy-Roberts.)

8.30 p.m.

Lord O'HAGAN

My Lords, the House will be grateful to the noble Lord, Lord Goronwy-Roberts, for changing gear with his customary facility and drawing the attention of the House to this important, though minor, Definition of Treaties Order. This is, of course, part of the continuing constitutional protection secured by the European Communities Act, 1972. We are grateful that another place has made up its mind as to the standing of your Lordships in this matter and, of course, understand the reason why this order's place was change in today's business.

I listened with interest to what the noble Lord had to say. The only question that has arisen in my mind when studying, the order he did not answer. In the memorandum of the Foreign and Commonwealth Office of 3rd January it was stated, as he repeated, that our own contribution would be about £3.3 million. It was also stated that: Each Member State will pay a specified sum on 1 December 1978, or soon after". The question I should like to ask the noble Lord is: Has our sum been paid, has that of other Member States been paid, and are we all paying on the same date or not?

I do not want to delay your Lordships and I hope the House will understand that I am trying to help the noble Lord by giving him a little time if I say something on a personal note. This is the last occasion on which I shall be speaking from this Box and from the Conservative Front Bench, perhaps for many years. I am resigning from the Front Bench and returning to the Back-Benches in your Lordships' House in order to have more time to work to return to the Back-Benches of the European Parliament following the elections on 7th June to that Assembly or Parliament, as your Lordships may choose to call it. It is, of course, peculiarly indicative of the way in which this House works that we have spent an afternoon talking about one worldwide relationship in general, that we return to a particular aspect of today's most powerful link of Britain with the wider world in discussing this order and that we end with an Unstarred Question on the Constitution of our country and its evolution. I do not want to say anything about the activities to which I shall primarily be devoting myself in the coming months, but, should I be successful in reaching the Back-Benches of another Parliament, I should wish to disappoint my noble friends on this side of the House and my noble friend on the other side of the House if they think that they have heard the last of me. I believe that those of us from this House and from another place who may have the opportunity of serving in the European Parliament have a special duty to help to ensure that this new and squalling baby in the long line of Parliaments has some sort of link with our own and most ancient and primary Parliament. That I shall seek to carry out in my own limited and Back-Bench way.

Quite properly, this order is the subject of scrutiny by this House. Direct elections make no difference to the need for this House to examine this sort of order. I am glad that we are still allowed to inquire into it and that the other place has permitted us to do so. I hope that the noble Lord, Lord Goronwy-Roberts—my noble friend—will be able to tell us about the position regarding the contributions of the different member States.

Lord GORONWY-ROBERTS

My Lords, before I answer the specific point put to me by the noble Lord—if I may say so, in turn, my noble friend—I should like to add to the words of explanation which I made to the House about the order of business. The Motion which I then moved and which I now conclusively move—if I may put it like that—was originally to be taken before the debate which has just been concluded; that is, the debate on the Commonwealth. Last Friday it was decided to take the order after the Motion, and a Notice was accordingly circulated to that effect. It was brought to my attention that a Business of the House Motion should have been moved to dispense with Standing Order No.37(4).Unfortunately, that preliminary was overlooked, but I am quite sure the House will agree that, despite this technical breach, we were quite right to proceed with the order and that it should now be approved.

Before I conclude, I should like to say something about the noble Lord, Lord O'Hagan. I wish that he had announced his intention of moving—howsoever temporarily—to the Back-Benches without asking, as is his unfortunate wont, a very difficult question. However, the resources of the British Civil Service are not exhausted, and while I was puzzling over this procedural problem I was able to find the answer for him. It is like trying to solve both the Guardian and The Times' crosswords at the same time. Our sum has not been paid and will not be paid until the procedure in which we are engaged tonight is completed. Other member States will pay when their procedures are carried out. I think that, financially and procedurally, that is fair enough.

Before I sit down, may I say that I listened to the noble Lord's statement of his intentions with mixed feelings: with a certain sense of relief, which is understandable, that his very pointed and effective attentions from that side of the House will not, at least in the foreseeable future, be my lot. For that relief, much thanks. On the other hand, we all feel disappointed that he should be removed, however temporarily, from that Bench and only hope that his retirement—his retreat—to the Back Benches is not only temporary but strategic, and that he will re-emerge like a lion refreshed, primed with experience in the European scene, which is quite a good apprenticeship for the larger task of coping with this House.