HL Deb 27 October 1982 vol 435 cc502-6

3.46 p.m.

Lord Skelmersdale

My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:

"With permission, Mr. Speaker, I will make a Statement on the outcome of the Foreign Affairs Council held at Luxembourg on Monday the 25th and Tuesday the 26th of October.

"Agreement was reached yesterday on the implementation of the agreement of 25th May on refunds for the United Kingdom for 1982. This is subject to final confirmation within three days by the French Government. I am arranging for the text of the council conclusions to be placed in the Library of the House together with a short explanatory note.

"The main issue discussed by the council was the method of financing the refunds. In particular, the agreement of 25th May provided for relief for Germany without specifying how the relief was to be given. This has now been satisfactorily resolved, and I am satisfied that the arrangements correctly implement the agreement of 25th May.

"The council had a useful discussion of East-West economic relations and of the Community dimension of the current discussions with the Americans. There was general support for the efforts being made to reach agreement on a framework for the handling of East-West trade and economic issues.

"As the House will be aware, there remain restrictions on general trade between the United Kingdom and other countries of the Community and Argentina. We have discussed this with our partners and I am glad to report that the council agreed with my suggestion that the Community should put to the Argentine Government immediately a proposal for the reciprocal lifting of these restrictions.

"A ministerial conference with Spain in the margins of the council made progress on a number of points. There will be a ministerial conference with the Portuguese in November, and the council reviewed the preparations.

"The council agreed a mandate for the negotiation of the trade régime with Cyprus for 1983. There was also a meeting at ministerial level of the EC Cyprus Association Council. The Community announced its agreement in principle to a second Financial Protocol for Cyprus to enter into effect on 1st January 1984.

"The council also discussed a number of important trade issues for which my honourable and learned friend the Minister for Trade was present.

"Points connected with the preparation of the Community position at the forthcoming GATT Ministerial Meeting were remitted to officials for further work. Meanwhile, the Community will continue to participate constructively in the preparations for the meeting on the basis of the guidelines endorsed by the council in July.

"On relations with Japan, the council deplored the lack of progress so far in the consultations under the dispute settlement procedures of the GATT. A copy of the council's conclusions is being placed in the Library of the House.

"On steel, the United Kingdom pressed strongly for a tighter and more realistic import régime for 1983.

"On textiles, the Commission reported on the negotiations for new bilateral agreements under the multi-fibre arrangements and were given instructions to re-open negotiations where agreements remained to be concluded".

My Lords, that concludes the Statement.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord for repeating the Statement. While we welcome the agreement on refunds, so far as it goes, is the noble Lord aware that it is extremely complicated and it seems to fall short of the speedy and permanent solution which we had been led to expect? Is it true that long-term budget arrangements, which are so desirable, were not pressed by the United Kingdom on this occasion? Can he therefore tell the House what the prospects are for a long-term settlement? Also, does the Prime Minister intend to raise this when she goes to the Copenhagen Summit at the beginning of December? Can he also say a word about the United Kingdom contribution to the Community budget? This was thought to be about £840 million, but reports this morning give a figure of about £1 billion. Can the noble Lord say which of the two is the accurate figure?

In the discussion on East/West trade to which the Foreign Secretary referred was the question of the Siberian pipeline raised and, if so, with what result? Further on this point of East/West trade, was the proposed sale of butter surpluses to the Soviet Union discussed and what conclusions were reached on that?

With regard to the lifting of restrictions on general trade with Argentina and the Foreign Secretary's proposals on this, can the noble Lord say whether any conditions were attached?—for example, a clarification of Argentina's position on the total cessation of hostilities. I think the House would wish to know what the conditions were which the Foreign Secretary attached to the proposals that he made. Is he aware that we on this side of the House would support any reasonable step in this direction, and the improvement of trade with other South American countries?

With regard to the paragraph on Spain, can the noble Lord say whether there was any time-scale agreed regarding the accession of Spain and Portugal to the Community?

Lastly, in the sentence on steel, having regard to the considerable anxiety which exists about the state of the steel industry in Britain at present, can the noble Lord say what was the response of other Community countries to the pressure of the United Kingdom for a tighter and a more realistic import régime for 1983?

Lord Gladwyn

My Lords, we on these Benches on the whole would like to congratulate the Foreign Secretary on what he has achieved at this last meeting. It seems to me to be extremely satisfactory on almost every point, and more particularly perhaps in regard to the implementation of the agreement of 25th May on refunds for 1982. I think we can only hope that the French will agree, and I believe there is every reason to suppose that they will. The only point which perhaps might have been made and was not discussed was in regard to Poland. I am not quite certain why they did not discuss what action, if any, they might take in regard to Poland in connection with the latest moves of the Government there.

I have only one general point to make and that is in relation to the negotiations on the British contribution to the budget. I believe it is only right that the Government should fight their own corner in maintaining that our contribution, generally speaking, is too large—I am all in favour of that—and in maintaining that there should be a notable reduction. But I suggest that it would be wrong to be too tough in these negotiations.

Do they not see that, far from regarding the United Kingdom as one of the poorer members of the Community, the French regard us—with some reason—as one of the richer members, sitting as we are on a mountain of coal, surrounded by an ocean of oil and gas, with a nuclear energy programme of our own and, above all, with a balance of payments which now is happily more or less in surplus? On the other hand, the French, as we know, are enormously dependent on imported energy, which can hardly be said to be their fault. Any additional drain on their resources consequently affects them more than us. In these circumstances, why should we quarrel unduly about £50 million or £100 million which, in relation to our own expenditure, is now really only a drop in the ocean?

3.57 p.m.

Lord Skelmersdale

My Lords, I am grateful to both noble Lords for their response to the Statement. I think perhaps that of the noble Lord, Lord Gladwyn, was a little warmer than that of the noble Lord, Lord Cledwyn. However, I shall do my best to answer their questions.

Both noble Lords commented, not unnaturally I think, on what I hope the House will regard as the "meat" of the Statement: that is, the budget. I would agree with the noble Lord, Lord Gladwyn, that this is a good solution for Britain and also for the EEC. It is not, of course, a long-term solution, as will be quite obvious. The main benefit is that there will be a very substantial bringing forward of the payment of our refunds. We shall receive our basic refund of £600 million before the end of this year and not in 1983, as specified in the 25th May agreement. We shall also receive payments under the risk-sharing formula out of the 1983 budget and not out of the 1984 budget, as the 25th May agreement also specified. Without these concessions we should not have received most of this £600 million until March 1983, and a significant part of it would not have crossed the exchanges until even later. So the bringing forward of the amount is in itself a great benefit.

The noble Lord, Lord Gladwyn, also asked about the long term. I can tell him that my right honourable friends and their colleagues have already had bilateral discussions with the Commission and most of our partners. The Commission will shortly put forward some ideas as a basis for discussion. Now, the Community has undertaken to take decisions by the end of November, so we hope that by the time my right honourable friend the Prime Minister goes to Copenhagen in December it will be too late and the matter will not need to be raised again.

The noble lord, Lord Cledwyn, mentioned the Siberian pipeline; and the reason it is not mentioned in the Statement is that it was not specifically raised. We hope that the United States ban will disappear on the working out of a new East/West economic policy and that such a policy will include this and facilitate it. The noble Lord also asked about Poland. This was not on the agenda at all. As for the Soviet butter sales, they will be on the agenda of the Agricultural Council and not on the agenda of the Foreign Ministers' Council.

I also asked about Argentina and I can tell the House that our primary aim is to achieve the normalisation of commercial relations as quickly as possible, which is obviously in all our interests, bilaterally and multilaterally, with the other Latin American States. Naturally, if all remaining sanctions are lifted, it will be on the clear understanding that there will be no further acts of violence in the South Atlantic. Should that not be the case, a new situation would arise to which the Community would have to react immediately—and indeed we now know that it is well capable of doing so.

Finally, the noble Lord, Lord Cledwyn, asked a question on the subject of GATT. The paper setting out the guidelines proposed by the Commission, which was broadly endorsed by the July Foreign Affairs Council, is available to the House. This will also be put in the Library. The ministerial meeting is important as a collective demonstration of political will to maintain and strengthen the open trading system at a time of recession. The United Kingdom is particularly concerned to press for a fairer balance in terms of access to markets where our exporters face unnecessary barriers.

I thought that that concluded the answers to the questions, but I see that there was one on steel. We pressed for a substantial cutback on imports and we have good reason to believe that our Community partners will accept this, but a decision still has to be made. I would expect it at the next council or the one after; in other words, either November or December.

Lord Diamond

My Lords, may I also express my gratitude for what is, after all, a fairly full Statement. But may I, nevertheless, draw the Minister's attention to that part which refers to the discussion of a number of important trade issues? Would the Minister kindly give us some indication of what they were, other than those which are already referred to in the Statement? Would he also say, in particular, whether there was any discussion on matters relating to the restriction of trade?

Lord Skelmersdale

My Lords, at first blush the noble Lord, Lord Diamond, misread the Statement just as I did. The paragraph to which he is referring is, in fact, an introduction to the following paragraphs in the Statement, which I hope are already self-explanatory.

The Lord Chancellor

My Lords, I am not sure where we are now. Are we having another Statement or are we going back to the debate? Perhaps Amendment No. 23 should be called.

Lord Elton

My Lords, I think that we have to occupy ourselves on the Bill for the time being.