HL Deb 07 December 1983 vol 445 cc1101-10

3.56 p.m.

The Lord President of the Council (Viscount Whitelaw)

My Lords, I will now repeat a Statement made in another place by my right honourable friend the Prime Minister on the European Council in Athens.

"With permission, Mr. Speaker, I shall make a Statement on the European Council in Athens on 4–6 December at which my right honourable and learned friend the Foreign Secretary and I represented the United Kingdom.

"At its previous meeting in Stuttgart the European Council had agreed that it was essential at this stage to consider the long-term future of the European Community and to tackle certain fundamental problems—in particular, agricultural surpluses, effective control of Community spending and a fairer distribution of the burden of financing the Community.

"We were all agreed that the Stuttgart package had to be taken as a whole and that decisions on each item depended on agreement on the rest. Unfortunately, the Community was not ready at Athens to take the necessary decisions. A number of member states wished to follow past practices and adopt a number of unsatisfactory compromises.

"On agriculture, the main issues discussed at Athens were price policy and the limitation of open-ended guarantees, action to curb the milk surplus, import and export policy, the proposed oils and fats tax, and monetary compensatory amounts.

"There was a considerable difference of view on price policy, on the volume of milk that might be subject to quota and superlevy and on various requests and proposals from some countries for exemptions. The United Kingdom is among those member states which consider that a rigorous price policy is essential; that any other arrangements for milk, such as a superlevy, should be non-discriminatory; and that the surpluses of many other Community products need to be dealt with as well. Four member states. including the United Kingdom, made clear that the proposal for an oils and fats tax was unacceptable. On monetary compensatory amounts, the differences between France and Germany were not resolved.

"With regard to the unfair budgetary burden, there was some recognition that a lasting solution must be found which would put limits on the net contributions of member states—limits which are related to ability to pay. This would be implemented by correcting the VAT contribution of the member state concerned in the following year. The majority of countries wished to establish a lasting system on the above lines which would be part and parcel of any decision on new resources. Unfortunately, although preparatory negotiations on this matter had made considerable progress, not all member states agreed to this approach and, accordingly, no decisions could be taken.

"Similarly, with the problem of increasing Community expenditure, the will to control it effectively was just not present at the Athens meeting. Even the ideas recently advanced by the French Government were not accepted by all countries as a basis for discussion. I made it clear that there must be strict guidelines for agricultural spending which must be embodied in the budgetary procedures of the Community.

"Unless the agricultural and financial issues can he resolved, the resources for new policies such as co-operation in research and development are very limited indeed, though many of us recognise that in the long run they are very important and that room should be made for them.

"International questions such as Cyprus and the Lebanon were not discussed in plenary session but were, of course, much discussed outside it. No official statements were issued on these or any other matters.

"It is regrettable that the European Council was not able on this occasion to make the necessary progress for the next stage of the Community's development. I had made it clear that I would not consider an increase in own resources unless there was agreement on a fair sharing of the budgetary burden and an effective control of agricultural and other expenditure. There was no such agreement and therefore for the United Kingdom the question of an increase of the Community's resources did not arise".

My Lords, that concludes the Statement.

Lord Cledwyn of Penrhos

My Lords, I thank the noble Viscount for repeating the long and complicated Statement, which the House will surely wish to debate as soon as possible. While disagreements at EEC summit meetings are not uncommon, will not the noble Viscount agree that this latest disagreement in Athens is one of the worst setbacks ever known in the Community's history? In addition to the admitted failure of the conference, the Statement which the noble Viscount has just read makes it clear that the Government have lost the agreement which was secured at Stuttgart six months ago. Can we he told why the French Government in particular changed their minds on this agreement in the meantime?

Against that background I should like to seek to summarise what seems to me to be the crux of the Statement. First, is it the case that the Government are totally opposed to the new French proposal that Britain's budgetary contributions must be dealt with on a temporary basis only? Secondly, is it the case that the problem of the over-production of milk and other farm produce must be tackled now and that a stable price policy is essential? Finally, is it the case that the size of the Community budget is not to be increased, otherwise the EEC will be in dire financial difficulties next year? Is it the Government's policy that, if there is failure on those three vital matters, Britain's payments, or at least some of them, will be withheld and that Britain will certainly not increase her gross contribution to Brussels?

In addition to making specific proposals on individual items such as milk and the MCAs, can the noble Viscount say whether the Government have put forward a clear and concerted policy for the long-term revision of the common agricultural policy? Does the noble Viscount agree that until the CAP is reformed, there is no hope of a successful outcome to the continuing difficulties?

Lord Diamond

My Lords, I, too, should like to thank the noble Viscount for being good enough to repeat the important Statement that was made in another place. The Statement reveals a situation which, though not completely disastrous, is indeed most unwelcome and, I believe, not wholly unavoidable. In other words, I believe that it was to some extent avoidable. Is it not the case, certainly with the benefit of hindsight—and I recognise that point—that rather than attempt to decide so many important issues—issues upon which it was known there were deep differences of view and policy—it would have been better to try to reach solutions to them one by one, rather than bite off more than the summit conference could possibly chew?

Is it not the case that these proceedings have revealed that this country must, indeed, contribute something more imaginative and creative than an attitude of pure inflexibility? I am bound to ask the Government where they intend to go from here? I assume that this was not part of a deliberate, planned stay of progress, but part of a way of negotiating what was desired. I assume that the Government were acting frankly in an attempt to secure what logic entitles us to secure. I am encouraged to go on to ask the noble Viscount whether he does not feel that, as between friends negotiating at a negotiating table, what is required is reliance more on logic than on leverage, especially as the logic of our case was so sound?

I shall not repeat the request for information which the noble Lord. Lord Cledwyn of Penrhos, has already made and which I, too, should have wished to make, but I should like to make it clear that no matter what lack of success may attend the policies and negotiations being pursued by Her Majesty's Government, we on these Benches remain totally convinced that the destiny of this country lies in Europe.

Viscount Whitelaw

My Lords, I am grateful to both noble Lords for their reception of the Statement. Perhaps I should begin with some general comments in answer to what they have both said, and thereafter deal with the details. As the noble Lord, Lord Cledwyn, said the failure to make progress at Athens was a setback and, as the noble Lord, Lord Diamond. said, it was unwelcome. No one can deny that. However, perhaps it would be wrong to exaggerate it.

As the time when decisions must be made draws ever closer—because the funds are running out—there will be a greater realisation that those decisions have to be taken. I have heard it said that in some cases time is, therefore, somewhat on the side of the United Kingdom. Nevertheless, the outcome was very disappointing.

I am equally very glad from the Government's point of view to reinforce what the noble Lord, Lord Diamond, has said. Of course we shall continue to negotiate. Of course we are determined that a sensible arrangement for Community financing and for the CAP should be found, and we shall play our full part—I say this in answer to the noble Lord, Lord Diamond—in an imaginative and creative manner. Most certainly we shall do so. We have no intention of going back on our deep commitment to the European Community and all that it stands for, particularly at the moment in political terms, and certainly in economic terms. The disagreements are disappointing, but they have to be resolved, and I think that there is a mood to resolve them.

I now turn to the details. The noble Lord, Lord Cledwyn, asked me why the agreement was secured at Stuttgart but not followed through at Athens. I must tell the noble Lord that one would have to ask the participants in the conference why it was not carried through and why, perhaps, they have gone back on some of the things that they previously said. However, I do not think that one would gain by going over that ground. We want to go forward to the future.

The noble Lord, Lord Cledwyn, asked whether the United Kingdom was totally opposed to the French idea of our problems being solved yet again on a temporary basis. The answer to that question is, yes, we have made it clear that we believe it is essential to get a clear settlement which will continue for the future.

The question of milk was raised by both noble Lords. We have stood firmly for the basis of the price mechanism which would in fact restrict production and encourage consumption. We believe that that is the best way in which to deal with the milk problem which, as the noble Lord, Lord Cledwyn, with his great knowledge, will appreciate, is the major problem of the common agricultural policy.

The noble Lord, Lord Cledwyn, asked whether, if there is a failure in the negotiations, the United Kingdom will withhold payments. That must be a hypothetical question, and I hope that it is one that will never have to be answered. Her Majesty's Government are determined to proceed to secure an agreement and to continue with the negotiations. I hope that we shall reach that agreement with our friends and allies in an imaginative and creative way. I think that all realise the need to do so.

The noble Lord, Lord Diamond, suggested that we should be more imaginative and more creative. I would say to the noble Lord that that is fair as far as it goes, but we have our rights. We have stated our positions. We would be prepared to make agreements. Provided that we obtained new own resources we would be prepared to go along, so long as at the same time we were able to get a sensible budgetary settlement for ourselves. I take the view that that is something with which this country would agree and which, indeed, would certainly be agreed within this House.

Equally, if we go forward with this agreement, we must get arrangements which will curb the over-spending in the common agricultural policy and, indeed, make sense of it for the future. Therefore, although it is right to he imaginative and creative, I think that it would he unwise to depart from very clearly held positions which actually accord with the best interests of our country, as well as those of the Community, because we believe that in the end the two go together.

4.12 p.m.

Lord Home of the Hirsel

My Lords, my noble friend's Statement was necessarily very concerned with financial and economic matters. Is it not the political cohesion of Europe which will matter supremely in the critical months and years ahead when Europe's reconciling diplomacy may make all the difference between war and peace? Therefore, can my noble friend give the House the assurance that the Prime Minister and the Foreign Secretary will urge their colleagues to deal with these economic matters speedily so that time is not lost?—for when time is lost I am afraid the political influence of Europe will correspondingly decline.

Viscount Whitelaw

My Lords, I am most grateful to my noble friend Lord Home. I think that it would be accepted in this House and by a very wide section of people in this country and all over the world that no one speaks with more authority on these matters than he does. It is very welcome to be able to say to him: Yes, the Government totally agree with what he says; the importance of political cohesion in Europe is crucial. I would agree with the underlying point in his remarks that that political cohesion is damaged unless financial agreements can be reached, and can be reached speedily. Yes, my right honourable friend the Prime Minister and my right honourable friend the Foreign Secretary will certainly pursue the line which my noble friend has so properly put before this House.

Lord Molloy

My Lords, would the noble Viscount not agree that, despite the determined and strong endeavours of the Prime Minister, the Statement that he has had to read out is a lamentable defeat for the British Government, if not for the British nation? In view of all that he said about the CAP, its excessive spending and other items, would he not agree that it now seems that we have been debating this sort of thing for a couple of years? Then we always want to hurry to reassure those who it seems are beating us, chastising us and threatening us, that nevertheless we will stick with them, that it does not matter how hard they hammer us. Further, will the noble Viscount not agree that there is now a growing number, if not a majority, of British people who think that this absolute adherence, not to Europe, as mentioned by the noble Lord, Lord Diamond, but to a part of Europe, is by itself something to which we should not every time have to bow the knee, on the grounds that there is very little assurance for a flock of sheep on the way to the butcher?

Furthermore, if we are to be treated in this manner, we must take a more vital stand; indeed, we may have to revert to a pre-war stand when we were being pushed around. I believe that it is fair to say—and I hope that the noble Viscount will agree—that the Government (as, indeed, have previous Governments) have given so much and have shown so much patience. Indeed, the Government under my noble friend Lord Wilson got little back for the patience and the understanding that they showed. Our present Government are getting little back for the understanding that they have tried to show, and at least should receive some appreciation from the British people that they realise that unfairness is being shown. Therefore—

Noble Lords

Speech!

Lord Molloy

My Lords, I know that it is a speech and it is a very important one. Therefore, if we are to stay in the EEC, it is about time that the other members tried to understand the problems being explained by our Prime Minister and our Government, as has been done in the past.

Viscount Whitelaw

My Lords, in answer to the noble Lord, I do not think that I would wish to go the way of some of his expressions. I do not accept that this disagreement, which I have described as regrettable and indeed unfortunate, is a lamentable defeat. We did not lose anything. If the words "lamentable defeat" mean anything to me, they mean that we actually lost something and, whatever else, the fact of the matter is that we did not lose anything. We did not gain anything and nor did anyone else. The tragedy is that the Community did not gain, but it cannot be a lamentable defeat unless we lose something. That is the first point.

As for all this business about being beaten about and all the rest, I can only say to the noble Lord that I hear other views about my right honourable friend the Prime Minister. I have never heard of anybody beating her about, pushing her around, or all these other expressions. I have heard it said that she was pushing them around, but never the other way round. Therefore, I think that we can be assured that she will stand up for our interests; and that is right.

However, surely the noble Lord will also accept that among a community there are strong views and differences of opinion. It is the purpose of negotiators to resolve these. Frankly, I do not think that rude and perhaps somewhat ill-chosen comments about those with whom one is trying to negotiate are wise. On behalf of the Government, I certainly would not wish to indulge in them. I believe that, as my noble friend Lord Home said, we must make sure that we gain the political advantage of European cohesion. We have to work to that end. That is what the Government are determined to do.

Lord Beloff

My Lords, I should like to ask a brief question of the noble Viscount. Would he not agree that, to some extent, the damage that has been suffered by the European idea in this country and no doubt elsewhere is due to the fact that much limelight is thrown upon Prime Ministers and Presidents when they gather together in this way? Would there not now be a case for leaving the negotiations on milk prices and matters of that kind to junior Ministers and to officials, and for the Leaders of Europe to come together only when they are assured that they will be signing something already agreed?

Viscount Whitelaw

My Lords, I am grateful to the noble Lord and I think we would all agree that there is a good deal in what he says. Perhaps one of the tragedies of the position in Athens was that a great deal of preparatory work, which is what he requests, had been done in the time leading up to the meeting. Probably one of the major tragedies was that, when there was hope that that preparatory work was leading to a basis of agreement, somehow in Athens that basis of agreement disappeared again. Indeed, that was probably the greatest damage of all. My right honourable friend the Foreign Secretary and all my other colleagues will continue these negotiations, as they have done before. If your Lordships knew how many of my colleagues appear to be permanently out of this country attending various meetings on this score, you would be amazed at the amount of negotiating work that is taking place. It must go on. I hope that next time the ground work will have been laid and then advance will be made from the position when the Prime Ministers and Leaders get together.

Lord Gladwyn

My Lords, will the Government agree that, if there is to be agreement under a French presidency next year—as we all hope and, indeed, as I myself believe there will be—to some extent all members of the Community will have to change or modify their present attitudes? For instance, Mr. Mitterr and will obviously have to go back to his earlier proposal for a reform of the CAP, and push it strongly; he will have to abandon his present insistence on a temporary solution of our budget difficulties. The Danes, the Irish and the Italians must accept certain sacrifices for the general good. The Germans might be more forthcoming on MCAs.

Finally, I suggest that our own Prime Minister might, as a general contribution to this accord, be rather less intransigent in her actual demands for a very great reduction in the contribution that we make to the budget. The sum of £500 million or £600 million is not enormous for a country which pleads poverty on the grounds that its production is very low owing to our own incompetence, but which its colleagues on the Continent think is very rich owing to the enormous sums it receives from North Sea oil which benefit its balance of payments. Consequently, if Mrs. Thatcher. as a contribution to the general accord, could reduce her demands to some extent in that respect I should have thought it would be a great contribution to the general agreement.

Viscount Whitelaw

My Lords, I think it would be unwise of me to follow someone of' the noble Lord's great diplomatic eminence and skill in the advice he is giving to other countries. I have no doubt that they should consider it. I think they would take it better from him than perhaps they would take it from me, and I do not think therefore that I would wish to proceed on that line. Regarding his remarks about my right honourable friend the Prime Minister, it is exactly what I was saying to the noble Lord, Lord Molloy, before: at one moment she is said to be being beaten about the place, and then the next moment too intransigent.

I must say to the noble Lord that I do not accept the argument about intransigence. In fact, we have said we are prepared to reach an agreement; but we say that if we are going to have an increase in own resources it is surely reasonable that we should get an agreement on the amount that we are going to have to pay, and a sensible and long-term agreement and not a short-term one. Surely it is in our interests and the interests of all the countries in the Community that a sensible arrangement of the common agricultural policy is worked out because unless it is the Community will perpetually be in extreme financial difficulties. I do not think it is intransigence to try to get an agreement on those lines.

Baroness Llewelyn-Davies of Hastoe

My Lords, can the noble Viscount tell the House whether the whole question of the enlargement of the Community by Spain and Portugal, which is so relevant to the financing of the Community, was discussed either in plenary session or perhaps, as he described, outside it?

Viscount Whitelaw

My Lords, it was a great disappointment, as my right honourable friend the Prime Minister has said. that no progress was made on enlargement. It is very unfair on the countries concerned that no agreement was made. It was one of the disadvantages of no advance, and still it is important that that goes forward as soon as possible.

Lord Boothby

My Lords, I shall not keep your Lordships long. I should like to ask the noble Viscount the Leader of the House whether we should not bear in mind our own responsibility for the collapse of the EEC, which is clearly facing us at the moment? I was a member of the original Council of Europe at Strasbourg which consisted of members of their own Parliament, and which therefore meant something. That Council of Europe was smashed by us, by the British Foreign Office, under Mr. Eden.

As I was at the receiving end, I asked Mr. Eden whether it was his intention to destroy the existing Council of Europe, and he said, "Yes, it was". He did not agree with it. Therefore, we have our responsibility. Then when Mr. Heath took us into the EEC he made us sign the Treaty of Rome which we had played no part in framing, because we took no part in the Messina negotiations. The result is that we joined the Treaty, which I always felt was unworkable, without having had any say in what should be done.

Now, what can be done to retrieve the present disastrous situation?—and it is disastrous. I think that we require to renegotiate the Treaty of Rome, and play a full part in it ourselves. I do not think that the EEC, with its present farm policy and its present financial policy, can ever work. It was the late Field Marshal Lord Montgomery who said to me, "Until we get the political situation straightened out, and as long as we have nothing but an international civil service of enormous size and no power, and a talking shop in Strasbourg, we shall never get real strength or union in Europe". How right he was! And that is what we have today. I want the Government to consider seriously whether they should now scrap the whole thing, and start on a new conference altogether, in which we should all play a full part, and negotiate a much more effective treaty of union than the EEC can ever be.

Viscount Whitelaw

My Lords, I think I can assure the noble Lord briefly that this Government are determined to play their full part and to take their full responsibility in the future for seeking to make the Community work, and to make any adjustments which are necessary to make sure that the Community works for the good of Europe and, I believe, for the good of the world. That will be our purpose.

Lord Mackie of Benshie

My Lords, will the noble Viscount agree that part of the trouble is that many of the original countries in the Community do not regard us as being wholehearted Community members, and that it is the failure to overcome this which has been one of our greatest mistakes or failures? Really we are in the position of the Scots mother—it is a story with which the noble Viscount will be familiar—who was watching a squad of recruits drilling. She said, "Isn't it awful. They are all out of step but our Jock". I think that we sometimes adopt an attitude which puts up the backs of our partners in Europe despite the strong and sensible case that we have.

Viscount Whitelaw

My Lords, I must simply, I think, note what the noble Lord said. It is certainly not our purpose to do that. We are most anxious to show that in all these matters—and I believe we have shown over a period of time—we are wholehearted members of the Community and are determined to make it work. We have consistently said so. This Government made it clear at the time of the last election and previous elections that that is the case. We shall continue on that basis. If there have been mistakes over the past by any British Governments in this field, let us learn from them, and let us make sure that we are wholehearted Community members in the future.