HL Deb 23 June 1983 vol 443 cc22-8

3.20 p.m.

Viscount Whitelaw

My Lords, with the leave of the House, I will now repeat a Statement which is being made in another place by my right honourable friend the Prime Minister.

"I attended the European Council in Stuttgart on 17th/19th June, accompanied by my right honourable and learned friend the Foreign and Commonwealth Secretary. The main questions discussed were: first, the future financing of the Community and a more equitable basis for sharing the burden of member states' contributions to its budget; second, the 1983 budget refund for the United Kingdom; third, the Declaration of European Union proposed earlier by the Foreign Ministers of the Federal Republic of Germany and Italy, Herr Genscher and Signor Colombo; fourth, economic recovery with particular concern for youth unemployment. The Council's conclusions and the text of the Declaration have been placed in the Library of the House.

"Future financing: As regards the future financing of the Community, it was our objective to achieve clear directions on the detailed issues to be resolved, together with a tight timetable and an effective procedure for discussion during the autumn. The Council's conclusions meet this objective and provide: that negotiations will be started under an urgent procedure in which special meetings of Foreign and Finance Ministers will take place; and that the result of the negotiations will be submitted to the next European Council in Athens on 6th December 1983.

"The main issues for discussion will be: measures to ensure greater budgetary discipline and effective control of agricultural and other Community expenditure; measures to avoid the constantly recurring problems of certain member states and to assure a more equitable sharing of the burden of financing the Community budget; and the Community's requirements in terms of own resources taking into account the accession of Spain and Portugal and future Community action in other fields. Decisions will be taken in common on all these issues at the end. I made it clear that we remained to be convinced that there is a case for increasing the future resources of the Community.

"1983 British refund: Agreement was also reached on a 1983 budget refund for the United Kingdom of 750 million ECU (£437 million). Consequently, the United Kingdom will have received for the four-year period, 1980 to 1983, budget refunds of more than £2,500 million, roughly two-thirds of our unadjusted net contribution. This was the intended proportion in the 1980 and 1981 settlements, and the 1982 settlement was to be on similar lines and was so settled. A series of undertakings to find a solution for 1983 were given, but by the time of the Stuttgart Council no arrangements had been made. As the conclusions of the Council state, a net refund of 750 million ECU was agreed and a consequential figure 'will be incorporated in the draft Community Budget for 1984'.

"On European Union: with other members of the Council I signed the Declaration on European Union. We strongly support the objectives of greater political co-operation which are set out in this Declaration, and we welcome the reaffirmation of the wider objectives of the European Community.

"On other matters: the European Council welcomed the decision of the Council of Ministers on the reform of the European Social Fund which will give high priority to the fight against youth unemployment. It called for completion of the internal common market and continued work to remove various forms of distortion, including trade barriers caused by differences in national standards and distortion in the services sector. It stressed the need for action to combat the pollution of the environment, in particular protection of forests, reduction of the amount of lead in the environment and progress towards the use of leadless petrol.

"Political Co-operation: finally, the European Council discussed a number of international political questions, including Poland, the Madrid Conference, the Middle East and Central America. The Presidency's conclusions on these matters have been placed in the Library of the House.

"This was a critical meeting of the Council. At the outset no figures of any kind had been proposed for the British refund. Some member states had said that they would refuse to negotiate any refund at all. Had that view prevailed, I should have had to make a very different Statement today.

"Thanks to the efforts of the German Presidency and of a number of other countries we achieved not only a settlement of the British refund for this year but also made encouraging progress towards a long-term settlement of the financing problems which have for so long bedevilled Community discussion."

That, my Lords, concludes the Statement.

3.26 p.m.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Viscount for repeating the Statement. As we have not had an opportunity to study the Statement, much of which is relevant to today's debate, I do not propose to go into it in any great detail.

While acknowledging the difficulties which existed during the summit negotiations, would the noble Viscount not agree that compared with previous years it is not a generous settlement: that in fact it is less than one-half of our contribution? Is it the case that Her Majesty's Government will now be pressing very hard for changes in the common agricultural policy? And what is the attitude of the Government to the proposal to raise the 1 per cent. ceiling on VAT? Could the noble Viscount say how long he thinks that the proposed talks on future financing will take?

While accepting the desirability of the accession of Spain and Portugal, would the noble Viscount not agree that their entry into the Community will increase the financial problems of the Community? Is it not very doubtful that they can be accommodated within the present resources of the Community?

Could the noble Viscount also say a word about the £450 million refund? Shall we have to wait until the Athens summit to receive it, or is it possible that with French agreement we might receive it earlier? Finally, on a matter which I know is of considerable interest to noble Lords in all parts of the House—namely, the question of youth unemployment—could the noble Viscount say how the fight against youth unemployment will be assisted by the reform of the European Social Fund? Are there specific proposals to this end?

Lord Gladwyn

My Lords, since I propose to deal to a considerable extent with Stuttgart in the remarks which I shall make during the forthcoming debate, I shall not say much now, beyond observing that the real problems have still to be solved and that the £437 million rebate which we have obtained from our rather reluctant colleagues is not, as I understand it, to be regarded as in any way a final and definitive settlement but as one which, unless I am wrong, will have to be negotiated after agreement has been reached on the new budget at the end of the year (which the Community evidently requires) or perhaps in the course of the negotiations on that matter.

In general, I fear that I cannot congratulate the Government on the line which, as the full communiqué reveals, they have been pursuing so far as European unity is concerned, even if this attitude conforms, I must admit, to the present nationalist mood of much of the electorate. If the Government were now energetic in explaining exactly why such a mood could have fatal consequences, they might have more chance, as I see it, of getting a majority of the summit on their side when, later in the year, it will, as I believe, become necessary for this country to change its view on such matters as qualified majority voting and the so-called Luxembourg compromise.

Viscount Whitelaw

My Lords, I thank both noble Lords for their reception of the Statement. In answer to the noble Lord, Lord Cledwyn of Penrhos, I think it is fair to point out that if one takes the four years as a whole we have achieved a refund of two-thirds of our net contributions—some 65.48 per cent. This is a very considerable achievement, considering what was said by many of the other nations before the summit took place.

As for the problem of when we may receive the refund, that has not yet been finally settled. Then, as for the youth employment provisions, these are still being debated in the various councils, and I cannot say any more to the noble Lord on that point today.

As to the point raised by the noble Lord, Lord Gladwyn, I would have thought (although it would certainly be no part of my position in this House to argue again what was argued at the hustings) that one thing which had become abundantly clear was that the British people accepted the argument that Britain was a member of the European Community and was going to stay a member of the European Community; and that those who argued otherwise were decisively rejected—on other points, too, but on that point particularly. That is why I believe it is important—and this answers another point made by the noble Lord—that the discussions which take place for the future (which I believe will be complicated and difficult, and no-one should pretend otherwise) at least proceed on the basis that this country is accepted as a full member of the Community, determined to play its full part and to get sensible arrangements for the future of the Community. I believe that is a very considerable step forward.

3.31 p.m.

Lord Kennet

My Lords, all those who would go along with the noble Viscount's last words must take comfort from the last part of the Statement, which spoke of the progress that is being made towards a general financial settlement of the structure of the Community. Can the Government now accept it as a stated aim to get into the position where they can abandon the language of British refund? This is a phrase that occurs several times in the Statement, as though the Community were a kind of shop that has not given satisfaction. Once the finances are straight, we can abandon that kind of talk altogether, and may we hope that next year the phrase "British refund" will not appear in Government speeches or Government statements?

We realise that there are many documents to read in the Library. One of them is alleged in the press to contain references to security; that is, to the increased ability of the political co-operation machinery to go into security matters. Can the Leader of the House say anything about that point, even in general terms?

Viscount Whitelaw

My Lords, on the first point that the noble Lord, Lord Kennet, puts forward, it is important to state that the discussions on the future position of Community finances prejudged nothing. There were those who would have wished to enter into them on a prejudged basis. That we succeeded in not having, and I believe it is very important that they are not prejudged in any way.

As for the question of a British refund, I believe there has been a feeling in this country in the past that we were not being fairly treated as compared to others—and we are as entitled as any other nation to stand up for our own interests (and in the Community. they all do). That is what we were properly doing. Provided we can achieve a sensible arrangement for the future financing which is acceptable to all concerned and which places the burden of Community financing fairly, then I hope that the idea of a British refund will go. But we must stand up for our own interests. On the second point raised by the noble Lord, I must ask him to read the communiquê because I cannot add anything to it at this stage.

Lord Beswick

My Lords, may I ask the noble Viscount by what date he expects this £450 million to be paid?

Viscount Whitelaw

My Lords, I cannot at this stage give the noble Lord, Lord Beswick, the answer to that question because various discussions are still continuing in the Community and in the various councils.

Lord Elystan-Morgan

My Lords, in order that the House may be in the best possible position to judge the issue of the refund, will the Leader of the House give the figures for the net deficit suffered by the United Kingdom in respect of those payments since 1st January 1973?

Viscount Whitelaw

My Lords, I hope that the noble Lord, Lord Elystan-Morgan, will excuse me when I say that I shall really need notice before I can give him the answer to that question.

Lord George-Brown

My Lords, may I just put to the noble Viscount—whom I welcome of course, and this is my first opportunity to say so—the simple point that until the rest of Western Europe recognises us as a full political member of Western Europe, we will go on having these ridiculous arguments about how much money we get or do not get. Is it likely that in the next four years of this Government—in with the minority of votes but with the majority of seats—we will convince our friends in the rest of Western Europe that we believe in Western Europe and will stop arguing about the figures? Does the noble Viscount accept that if we do that, we might get the figures right?

Viscount Whitelaw

My Lords, I am grateful to the noble Lord, who speaks with great experience on these matters. Regarding other countries accepting us as full members, I would have thought that the election result—however one might look at the votes—certainly made it clear that the British people had no time for wishing to leave the Community. That is a very important development. They realise that leaving the Community would cost jobs for this country. That is also a very important development. If it was needed to persuade our partners that we are full members, then that was a very definite advance. Our partners do believe that, and it is up to us to convince them in these forthcoming discussions.

Lord Mackie of Benshie

My Lords, if farmers continue to grow the large crops which they do, when will the money actually run out? When will the budget become critical—when we shall need to raise fresh money or cut the farmers down most considerably?

Viscount Whitelaw

My Lords, the noble Lord will appreciate that in another capacity I have some of the same interests that he has. I would equally say to him that already the finances of the Community are in a very critical situation. That is why these discussions are so desperately important. The position of the future of the common agricultrual policy and how it works is at the very centre of the discussions which are now to take place.

Lord Pitt of Hampstead

My Lords, does the Leader of the House not agree that our becoming a member of the European monetary system will do more than anything else to convince the Europeans that we really are part of the Community?

Viscount Whitelaw

My Lords, I do not think that I should wish to be drawn on that particular point this afternoon.

The Earl of Onslow

My Lords, will my noble friend say whether it was made absolutely clear to the other members of the Community at the European summit that in spite of wishing for the accession of Spain and Portugal the problem of the Gibraltar border must be settled before Spain becomes a complete member of the European Community?

Viscount Whitelaw

My Lords, without going into complete detail on that point, I would say to my noble friend that he will have observed the passage in the gracious Speech which made a clear reference to the commitment of this country to Gibraltar.

Lord Ardwick

My Lords, may I for the first time and for the last time today say a kind word about the result that the Prime Minister has achieved? But is it really a result? Is it not dependent in the end upon French agreement? And is that agreement not dependent upon a general settlement being reached about the new rates of contributions?

Viscount Whitelaw

My Lords, certainly it depends on agreement; but it does not, as I understand it, depend on the final agreement of all the other financial matters. The decision on the British refund was agreed specially, away from those other discussions.

Lord Jenkins of Putney

My Lords, is the noble Viscount aware that opinion polls have suggested that the Government were elected not because of their attitude towards Europe but in spite of it?

Viscount Whitelaw

My Lords, without wishing to cross swords too much with the noble Lord, with whom I have crossed swords in the past in another place, I shall simply say that one point which was made clear was that those people who tried to get us out of the Community and argued to go out of the Community were very decisively rejected.

Lord Beswick

My Lords, may I press the noble Viscount about the actual payment of the refund? Is he thinking in terms of one month, six months, 12 months, or what?

Viscount Whitelaw

As soon as possible, my Lords, is the answer that I must give the noble Lord.