§ 3.39 p.m.
§ The Lord Privy Seal (Baroness Young)My Lords, with the leave of the House, I should like to repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I will make a Statement on the European Council in Copenhagen on 3rd and 4th December, which I attended accompanied by my right honourable friend the Foreign and Commonwealth Secretary.
"At the end of the meetings the Danish Prime Minister issued to the press his summary of the Council's conclusions. I have arranged for a copy of this document to be placed in the Library.
"In its discussion of the economic and social situations, the European Council agreed upon a number of priority goals including the re-establishment of economic stability; the continued reduction of interest rates as a means of encouraging productive activity; the creation of more employment opportunities and professional training for young people; and increased international co-operation in monetary and trade policy.
128 "A work programme was approved on four specific matters: namely, measures to reinforce the internal market; proposals in the field of research, innovation and energy; a new instalment of the New Community Instrument amounting to some £1¾ billion; and urgent consideration to be given to proposals for training young people and reorganising working time.
"The Council reaffirmed its political commitment to the enlargement of the Community by the accession of Spain and Portugal and asked the Foreign Affairs Council and the Agriculture Council to press ahead with the necessary preparatory work. I stressed that the Community must take quick and effective action to ensure more equal access in our trade with Spain.
"There was some discussion about the implications of enlargement for the ceiling on own resources. We take the view that the Community's present own resources should be sufficient. The essential requirement is effective control over the rate of growth of agricultural expenditure.
"The Council expressed its determination to pursue a constructive dialogue with the United States. It noted with satisfaction the agreement reached on steel and the United States' President's decision to lift the sanctions imposed in connection with the Siberian pipeline.
"The Council asked the Foreign Affairs Council at its next session in December to take decisions on the various ways and means of improving commercial relations between Japan and the Community.
"On fish, it was confirmed that nine member states were prepared to accept the Commission's proposals for a revised common fisheries policy. Denmark was not yet able to do so. The Danish Prime Minister said that he needed some further clarification which I understood to refer to matters outside the package now proposed. It is my hope and expectation that agreement will be reached at the next meeting of the Fisheries Council on 21st December.
"The Council was informed that the Foreign Affairs Council had set work in hand on the Commission's recent communication about the solution to the British budget problem for 1983 and later. I emphasised that unless a decision was reached before March I should have to raise the matter at the next European Council.
"As is usual, the European Council also considered international political questions.
"The Council agreed that the basis for our relations with the Soviet Union should continue to be firmness and dialogue. We stated our readiness to respond positively to any constructive moves which the new leadership in Moscow may make, and we looked for these in particular at the Madrid Conference on Security and Co-operation in Europe and in relation to Afghanistan.
"The Council agreed to keep developments in Poland under careful scrutiny so as to be able to judge the real significance of the measures which appear to be under consideration in Warsaw.
129 "On the Middle East, the Council called upon the parties to seize the political opportunity created in September by President Reagan's initiative and the Arab Summit in Fez, and urged that all Israeli and other foreign forces be withdrawn from Lebanon without further delay.
"On international economic matters, the Council stressed that the overriding priority for the Community's economic and commercial relations with other industrialised countries is a strengthening of international co-operation in all major areas to counteract recession, with particular emphasis on a return to a stable monetary, financial and trade situation.
"In this connection the Council stated the readiness of member states to work for a substantial increase of IMF quotas and their determination to contribute to an early decision to this effect".
My Lords, that concludes the Statement.
§ 3.44 p.m.
§ Lord Cledwyn of PenrhosMy Lords, we are grateful to the noble Baroness for repeating the Statement. We welcome the apparently high degree of agreement which appears to have been achieved in Copenhagen. On the economic side the position clearly remains grave, but we appreciate the attention which was paid to the unemployment problem in the Community, with 11 million people out of work, and especially the training of young people, although we appreciate that what is needed is permanent work for those who are trained. Can the Minister tell us a little more about the action which is proposed following the meeting? For example, how will the proposed loan facility—I understand 2,000 million dollars have been set aside—benefit the United Kingdom in terms of investment, and how soon, and what would our share of this normally be?
Again, to what extent will the proposed plan for co-operation in technical research, energy, and industrial intervention affect our North Sea oil resources, if at all? Would the noble Baroness agree that this summit marked a move towards protectionism by the Community? Perhaps she could state Her Majesty's Government's attitude towards this and towards imports into the Community, and what specific measures are proposed in relation to Japan? Was any progress made with regard to the United Kingdom's future budgetary contribution? I note some vague reference to next March, but the noble Baroness will recall that this question was to have been discussed in Copenhagen. Are we to understand now that it was raised but that no progress was made on it? Is there now a firm commitment for next year? The impression given by the Statement is that there is no firm commitment, and this is bound to be disappointing.
On steel, where reference is made to an agreement, could the noble Baroness confirm that Britain's share of any future cut will take account of the enormous sacrifice that the British steel industry has already made by comparison with our partners in the Community? Then, the Prime Minister says that she is confident that agreement on a common fisheries policy can be achieved before 21 st December. We are 130 extremely glad to hear this. It would be interesting to know what grounds the Prime Minister has for this hope and expectation in view of the apparent obduracy of the Danish Government on the subject; and, given that two-thirds of the fish are in British waters, can she indicate what allocation we are likely to get under the quota?
We generally welcome that part of the communiqué which deals with foreign relations, particularly the CSE conference in Madrid. On the Middle East, is there any further development with regard to a British contribution to the peace-keeping force in the Lebanon? With regard to the accession of Spain, can the noble Baroness say whether there is now a better prospect for implementing the 1980 Lisbon agreement? On the question of the sufficiency of the Government's own resources to which the Statement refers, will not the accession of two new countries exacerbate our budgetary position in the longer term?
§ Lord BanksMy Lords, I should like to join in thanking the noble Baroness the Leader of the House for repeating the Statement made in another place by the Prime Minister. The European Council has clearly discussed many important aspects of world affairs. Like the noble Lord, Lord Cledwyn, and the Government themselves, we on these Benches hope that the Danish Government will, before long, accept the Commission's proposals for a revised common fisheries policy.
With regard to the accession of Spain and Portugal, I wonder whether the noble Baroness could say what are now the likely accession dates? The Statement mentioned the Middle East, and the noble Lord, Lord Cledwyn, referred to that. Is it the Government's opinion, in view of matters reported in the press today, that in no circumstances can the PLO be included on the Arab side in discussions of the Reagan plan?
In the discussion on unemployment, to which the Statement refers and to which the noble Lord, Lord Cledwyn, referred, was there any general acceptance of the need to take measures to stimulate the European economy at a European level in order to have some modified expansion of the European economy? Is not the recession a cause of the increasing protectionism, and is there not a danger that this protectionism will be the major response of Governments to the recession? While acknowledging that special measures are necessary in the case of certain crisis industries, such as steel and textiles, I would ask the noble Baroness whether there is not a danger of a general slide into bilateral deals with particular countries outside the GATT, with unhappy consequences for world trade? Is it correct to say that the EEC is moving towards a freer internal market, which is welcome, and a less free or more managed external market, which is not welcome?
The Government say in the Statement that the present resources of the EEC should be sufficient. We on these Benches find it difficult to accept that there can be a long-term solution to the British contribution problem without a considerably increased Community budget from which this country would benefit more than it does from the common agricultural policy.
§ 3.50 p.m.
§ Baroness YoungMy Lords, I thank both noble Lords, Lord Cledwyn and Lord Banks, for their response to this important Statement. Both raised the question of the economy and attached particular importance to what the Statement said about the problem of unemployment and training. One of the conclusions of the Summit conference was the concern expressed about the depth and length of the recession and the difficulty of finding enough lasting jobs, particularly for young people. It was important that there was a welcome degree of agreement that the only way to tackle these problems is to get inflation and interest rates down and, in addition, a sensible package of measures to ease the social and economic difficulties which this structural adjustment is causing, and both noble Lords commented on the fact that training measures are proposed.
I was asked about any particular action that was proposed. The new Community instrument enables it to borrow on the markets and on-lend to industry for energy and infrastructure projects. It was expanded by about £600 million earlier this year and the commission has now proposed another approximately £1½ billion. Finance ministers will, of course, have to study the implications of this for the financial markets—the level of demand for these loans and the timing and so on—but we have agreed that they should take a decision on these matters by March.
Both noble Lords asked about the accession of Spain and the enlargement of the Community. Once again, the council has re-affirmed its commitment, which was necessary to reassure both Spain and Portugal, and believes that progress in accession negotiations must be made so that both countries can join the Community at an early date. Negotiations with both countries are proceeding separately but in parallel. Both we and the applicants hoped that they could join on 1 st January 1984, but this is now widely recognised to be an unrealistic date.
I was also asked, following on the important point about the economy, about the whole question of free trade and its effect. As noble Lords will recall from the Statement we had following the GATT meeting, the ministerial meetings demonstrated a collective determination to maintain the GATT system, despite the strains imposed by the world recession, and established a substantial work programme for the future covering important issues like services and trade barriers maintained by newly industrialising countries. The European Council has confirmed that this is something to which the Community will make a constructive contribution.
I was also asked about the Middle East and our attitude to representatives of the PLO. I confirm that my right honourable friend the Prime Minister has made it clear that neither she nor the Foreign Secretary receives representatives of the PLO, which is a terrorist organisation.
§ Lord KennetMy Lords, we on these Benches are grateful to the Lord Privy Seal for repeating that Statement, and I have just one question to ask. The Statement contains 13 separate points, all of them extremely general in the way they are phrased. It is not 132 only a motherhood Statement but a Statement in favour of motherhood, fatherhood, brotherhood, sisterhood, cousinhood and kindness to animals. My question is simply whether the Government are sure that the supreme authority of the European Community is not considering too many things which should be considered in sectoral councils, and deciding too few?
§ Baroness YoungI agree with the noble Lord, Lord Kennet, my Lords, that the Statement covers a great many issues; but when heads of state meet together it is an opportunity to review policies on a great number of important and urgent matters which are concerning the world. I would have hoped that, having read the Statement, he would have agreed that it has a number of very positive things to say on the economy, where most countries are now accepting a need for more restrained economic policies. It suggests, I think accurately, that relations with the United States are better; it describes the problems of trade with Japan and the Far East; and it has something positive to say about the common fisheries policy. I accept, as the noble Lord said, that these are all very big issues and that each one would be the subject of a major debate. Nevertheless, it is encouraging that these issues should be discussed in Europe and that we can, in that forum, play a major part in the outcome of it.
§ Lord Mackie of BenshieMy Lords, will the Nine Governments, if there is a failure of Denmark to agree to the fishing agreement, remain determined to implement national measures which will bring an agreement into being?
§ Baroness YoungMy Lords, I do not think I can go further than what I have said in the Statement. We hope the Danish Government will indicate at the next fisheries council, which will take place on 21st December, their acceptance of the package of measures. If not—and one does not wish to pursue this further—the Nine would then expect to decide on national measures in consultation with the Commission.
§ Lord MayhewMy Lords, may I ask the noble Baroness to give the reasons for the shift in the Government's attitude on the Palestine problem, which was evident at Copenhagen, and for the hardening of the Government's line on the subject of Palestinian representations, which led to the cancelling by the Government of the visit to this country of King Hassan of Morocco and his delegation, which has given grave offence to a number of moderate Arab leaders?
§ Baroness YoungMy Lords, I have given the reason, which was well expressed by my right honourable friend the Prime Minister at her press conference following the European Summit. She has said, and she confirmed, that she does not feel it would be right to receive representatives of an organisation which has not denounced terrorism.
§ Viscount EcclesMy Lords, is it right to conclude from the Statement that the willingness of the Governments of the Community to co-operate on economic 133 and financial matters took a marked step forward? It appears to me that their willingness to face the recession not separately but as a group is now very much more marked. In particular, was there any talk of sterling joining the EMS, as there was some reference to monetary and exchange affairs?
§ Baroness YoungMy Lords, I thank my noble friend for that supplementary question. It is true to say that the countries of Europe are coming increasingly to recognise that there is no easy way out of the recession for any country, and that many of the policies which we in this country have been pursuing over the past few years are indeed policies that they, too, will have to pursue. I think it is encouraging that there is this measure of agreement. As I understand it, the whole question of joining the EMS was not one that was discussed in Copenhagen. But I believe that, arising from the Statement and the results of the conference, there are areas where there has been a positive move on co-operation, and that must be good.
§ Lord Taylor of GryfeMy Lords, is the Minister aware that the final paragraph of the Statement, which refers to increasing the quotas to the International Monetary Fund, will be greatly welcomed, and has had today an immediate response from the United States, in so far as it, too, has indicated that it is prepared to increase quotas to the IMF; and that this should lead to a greater degree of financial stability in international banking affairs, and encourage world trade?
§ Baroness YoungMy Lords, I thank the noble Lord, Lord Taylor, for that question. I think that that is another piece of good news that is included in the Statement.