HL Deb 11 April 1984 vol 450 cc1168-71

4.16 p.m.

Baroness Young

My Lords, with the leave of the House. I shall now repeat a Statement on the Foreign Affairs Council which is being made in another place by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows: "With permission, Mr. Speaker, I should like to make a Statement about the Foreign Affairs Council which I attended in Luxembourg on 9th and 10th April. I was accompanied by my right honourable friend the Minister for Trade.

"The Council had a brief discussion on follow-up to the European Council. It was agreed that further work on the text on control of Community expenditure, on which provisional agreement was reached at the European Council, should be remitted to the Council of Ministers (Finance). On budgetary imbalances, I made clear our determination to work for a satisfactory agreement. There was, however, no substantive discussion and no agreement was reached on this occasion. Until agreement is reached on an equitable solution, there can be no question of agreement on our part to any increase in the own resources ceiling.

"The President of the Commission made a statement on the financial situation in the Community in which he said that expenditure in the current financial year was expected to exceed the budget provision by about 2.5 billion ecu. The United Kingdom's position on this issue was made clear by my right honourable friend the Minister of Agriculture in the Agriculture Council on 31st March and by a formal entry in the minutes of that Council.

"The Council resolved the main outstanding difficulties on the proposed common commercial policy regulation. It was agreed that the regulation, along with a package of 15 measures providing common Community safety and technical standards for industrial products, should be formally adopted, subject, in our case, to a parliamentary scrutiny reserve on two of the directives.

"In company with other member states and the Commision, we strongly urged Ireland to withdraw its objection to the conclusion of a further five-year agreement on imports of New Zealand butter to the Community.

"There was a discussion in preparation for the forthcoming ministerial meeting on the Lomé Convention.

"A successful joint meeting with Ministers from the member countries of the European Free Trade Association (EFTA) was held on 9th April, following the establishment on 1st January 1984 of full free trade in industrial goods between the Community and the countries of EFTA.

"A co-operation Council with Egypt was held to consider progress and prospects in economic, technical and financial co-operation.

"At the ministerial conference with Spain agreement was reached on some aspects of external relations and on the issue of patents.

"Ministers of the Ten also agreed a statement on recent events in Chile. I am arranging for a copy of this to be placed in the Library of the House. We also discussed the export of certain chemicals to Iran/Iraq in the light of the United Nations Secretary General's report on the use of chemical weapons in the Iran/Iraq war."

My Lords, that concludes the Statement.

Lord Cledwyn of Penrhos

My Lords, we thank the noble Baroness for repeating the Statement and regret that the result of the talks was again negative on the crucial issue. The Statement says that there was "no substantive discussion" on the budgetary problem. I wonder whether the noble Baroness will be good enough to explain this. Why did the Ministers not move to a substantive discussion, because it does appear to add an even graver shadow over the talks? Can she confirm that the Foreign and Commonwealth Secretary suggested that the Commission should be asked for a solution? What did the Foreign Secretary have in mind, if this is the case? Is it also true that Monsieur Gaston Thorn, the President, turned this suggestion down? What reason would he have for refusing to consider that? Furthermore, did the financial statement made by the President confirm the Government in their intention not to compromise further, or is there still a possibility of a compromise in order to achieve a settlement?

On the other points, can the noble Baroness say what Ireland's response was to the Government's plea on New Zealand butter? Can she say whether the agreement with EFTA has in fact started improving our position in relation to trade with the EFTA countries? Finally, the Statement is not absolutely clear as to the results of the discussion on the export of chemicals to Iran and Iraq. Was it decided to halt the export of these chemicals in view of the use which has been made of them in the present unfortunate conflict there?

Lord Kennet

My Lords, on the major question I think I have nothing to add to the questions asked by Lord Cledwyn, and we on these Benches tend to feel now that we have issued enough warnings and sounded the alarm signals so often about the present courses of Her Majesty's Government in this respect that the best we can do now is to fall silent and simply pray that they know what they are doing. Because it is, is it not, the case that once upon a time it was Germany and us and then a couple of doubters half-way between, against the rest in this matter; then the doubters vanished and then Germany vanished, and it is now this country alone and we have in effect reduced the Community to the low position it was in at the very worst of the crisis between President de Gaulle of France and all the other countries 20 years ago?

I have two further questions. On the Council meeting with Spain, what were the aspects of external relations which were discussed and what conclusions were reached? Further, on Lord Cledwyn's question about the export of chemicals to Iraq, did the Council of Ministers recognise together that they were facing the destruction of a 60-year history of agreement about chemical weapons? What do they propose to do about it? Is there a collective voice in Europe? Is there collective action in Europe on this matter?

Baroness Young

My Lords, I should like to thank both the noble Lord, Lord Cledwyn, and the noble Lord, Lord Kennet, for their reception of this Statement. Both noble Lords asked me about progress in these talks. In fact, a measure of agreement has been reached over the control of the Community expenditure framework, and on budget imbalances, and we have agreement to a lasting settlement which will ensure that we pay no more than our fair share. Negotiations are continuing and there is no lack of momentum on this matter.

The noble Lord. Lord Cledwyn, asked me a quite specific question about the Commission and I can confirm that my right honourable friend said that he believed that it would be helpful if the Commission could, at the appropriate moment, make a contribution which might break the deadlock. That was the only new proposal and it came from the United Kingdom. I hope that that will be an answer to the noble Lord's question.

The noble Lord asked me a question about the Community and EFTA. I can confirm that the development of economic and trade relations in the context of the free trade agreements between the Community and the member countries of EFTA were considered. The prospects for future co-operation were also considered. A joint declaration was issued at the conclusion of this successful meeting.

On the question of New Zealand butter, we have never seen any justification for denying New Zealand the full five-year agreement which was proposed by the Commission, and now that agreement has been reached on the reform of the milk regime there can be no reason to delay agreement further. Indeed, continued delay would be shabby treatment of a partner to whom the Community has clear commitments and we shall continue to press our partners for an early agreement.

The noble Lord, Lord Kennet, asked me a point about the Spanish accession. The particular outstanding questions which remain, both for Spain and for Portugal, include difficult areas of social affairs, agriculture, fisheries, institutions, own resources, and, for Spain, transitional arrangements for industrial tariffs. We hope that these dossiers will at least be substantively completed by the autumn.

Both noble Lords raised a point on the very serious matter of chemical exports to Iraq and Iran. I should like to confirm that the matter is under urgent study both here and within the Ten. The House will be informed as soon as firm decisions have been reached. On the use of chemical weapons, the United Kingdom Government wholeheartedly endorse the Security Council's condemnation of the use of chemical weapons in the conflict between Iran and Iraq, and we have repeatedly made it clear that we condemn the use of chemical weapons whenever they may occur.

Lord Gladwyn

Is it not becoming clear that the maintenance by Her Majesty's Government of what might, I suppose, be properly described as a Gaullist attitude towards our contribution to the budget is becoming increasingly untenable? I may be wrong but, as I understand it, the general formula governing the long-term contribution of members to the budget has now been more or less agreed, and the outstanding point, apparently, is the actual amount which separates our estimation of what we should pay from that of our nine colleagues. I believe this is only about £120 million. Why not therefore just call it a day and say we will accept a compromise whereby we go fifty-fifty and accept £60 million instead of £120 million, thus probably ending the controversy straight away?

Baroness Young

My Lords, as I indicated in my earlier answer to the noble Lord, Lord Cledwyn, we have made some headway in these meetings, in some directions. On this occasion we did not move forward but on the other hand we did not move backwards, and work is continuing to try to bridge the gap. We remain determined to reach a satisfactory solution.

The noble Lord asks if the gap was so small, why could we not get a compromise? The fact is that the notional base figure is of crucial importance because it provides the foundation for a system that will operate into the future. It is therefore very important that we should get it right. The gap between what we regard as an equitable figure and what our partners are offering is a more significant one so far as the United Kingdom is concerned than for the other nine member states who would contribute jointly to finance it.

Baroness Trumpington

My Lords, before the debate is resumed, I should inform your Lordships that the revised time for the end of the debate is 6.7 p.m.