HL Deb 01 February 1984 vol 447 cc661-72

3.14 p.m.

Lord Ezra rose to call attention to the need for Her Majesty's Government to take a more constructive attitude at the forthcoming meeting of the European Council in March in order to help to resolve the essential problems of the Community and to realise its full potential, particularly in international affairs; and to move for Papers.

The noble Lord said: My Lords, the Motion which I shall be introducing today is of fundamental importance, not only to this country but to all the member countries of the European Community. We have seen that at the last meeting of the European Council, in Athens in December, there was a total failure to reach agreement on the matters needed to get the Community on its course again. We now have a meeting due to take place under the presidency of M. Mitterrand towards the end of March, when the agenda which was agreed at Stuttgart in June of last year will be taken up again.

I believe it is of crucial importance that we and the other members of the Community should make a determined endeavour to resolve the outstanding problems. I am sure that this House would wish M. Mitterrand every possible success as President of the Council to resolve these problems. He has indeed started by having private conversations with the heads of state and heads of government of the other member countries in order to prepare for this important work.

The issue we have before us is the very existence of the Community. We have shown as a nation that we believe that a large part of our destiny lies in Europe. We have decided by various manifestations of the popular vote that we should become party to the European Community. It is therefore important that we should play our role in making sure that that Community succeeds.

Before I get on to discussing the issues with which we are all familiar, and make certain suggestions as to how we may overcome them, I should like to refer to what I believe are certain difficulties of an organisational nature preventing the Community from coming to effective agreement. The first remarks I should like to make are in regard to the European Council itself. The European Council is a meeting of heads of state and governments of the European Community. It was idea which was launched by M. Pompidou in the latter 1960s.

The intention was that these eminent personalities at the top of their respective countries would be discussing between themselves broad strategic issues. Unfortunately, as time has gone on, the European Council has actually taken on the detailed work of decision-making within the Community. The result of that has been that instead of the decisions being reached through the normal processes laid down in the treaty, to which we subscribed as a country when we joined, decisions on even the most detailed matters are now being deferred until they can be dealt with by the heads of state and governments. At their next meeting they have allotted themselves only two days in which to do this, and it would not be surprising if, as happened at Athens, they have no time to come to agreement. There, all the heads of state and government had their briefs on milk quotas, cereal prices and goodness knows what other detailed matters, and the thing ended in complete disagreement.

Therefore, I think that the first thing we might humbly propose to the heads of state and governments is that they might perhaps decide on a self-denying ordinance. I hope they would agree that the decision-making processes of the Community should revert back to where they were intended to be—between the responsible Ministers and the officials serving them—and that they themselves should limit themselves to the strategic issues.

Indeed, this point was raised in an important debate in the European Parliament on 13th December, and I would draw your Lordships' attention to what the noble Baroness, Lady Elles, had to say on the subject, and what Sir Fred Catherwood had to say, quite apart from the speech by M. Thorn, President of the Commission, when he addressed the Parliament. That seems to me to be one impediment in the way of making the Community go forward: that decision-making has now moved to an area where it should never have been, and beyond the heads of state and government, at any rate in terrestrial terms, there is no further recourse.

I think that in all these matters—I see the right reverend Prelate sitting there; I do not know whether spiritual guidance could help us in these matters—it is desirable that there should be some ultimate body which can decide these things and which is not committed to the detailed negotiations.

A second matter that I would refer to on the organisational aspects is the use of the veto. In the Community the veto was introduced as a result of pressures by General de Gaulle in the mid-1960s. As a result of the so-called Luxembourg Compromise of 1965, it was agreed, contrary to what is laid down in the Treaty, but nevertheless agreed, that in matters which were of vital concern to a particular country it could exercise the veto. I regret to tell your Lordships that this right of veto has been massively abused and since that period no fewer than 300 vetoes have been imposed on such relatively small matters, for example, as a veto imposed by the German Government to prevent the acceptance throughout the Community of the qualifications of architects. How that can be regarded as fundamentally affecting the interests of that particular country is difficult to decide.

There are many other instances of this use of the veto. I think the time has come when this should be reviewed. It might well be, as we all hope, that in Brussels in March there will be agreement, but then that agreement could be negatived by the indiscriminate use of the veto in its application. This is something we should look at seriously.

The third area of the organisational operations of the Community to which I should like to draw attention is the role of the Parliament. We have in the European Parliament on the British side and all the other countries' sides, some very eminent personalities devoting much time to these affairs. But, apart from their ability to hold up the budgetary decisions, they have no real authority. Now that we are coming up to the second elections to the European Parliament, when many eminent people will be appointed to represent their countries in that Parliament, we should be leading in a re-examination of the rôle of the Parliament in order to make the whole Community organisation more democratic.

But what we are concerned with primarily in this debate today is the United Kingdom's position in the forthcoming negotiations. I regret to have to say that the impression abroad of the United Kingdom position is very negative. The position that the United Kingdom Government actually hold in this matter is, in my opinion, not as negative as is thought. We have had the benefit in this House of hearing what Ministers have had to say. I have read carefully what Ministers have said in another place. I think that the view taken of Community affairs is fairly broad, but it is regrettable to have to say that, for those of us who go abroad a great deal—I am one of them—the impression that people have in other Community countries is that we are obsessed with the recovery of our overpayments to the exclusion of all other considerations. I do not believe that is correct, but I should like to state that it is the view.

It is very important that in the run-up to the March deliberations we should correct that impression. If the Government's view, as I believe it is, is that the issues in the Community are wider than the mere recovery of overpayment, as we regard it, I think we should undertake a major campaign to make that clear, because our many friends abroad have the impression that we are solely concerned with the recovery of those monies. This would be a very unfortunate basis on which to go into these renewed negotiations.

There are in fact many issues to which the heads of state and governments should be addressing themselves at present. The time has come when we need to raise the whole level of the European debate. We need to start considering the fundamental issues which confront our various nations. Of course we want to get the budgetary position right; of course we want to resolve the problems of agriculture; of course we want to ensure that efficient use is made of whatever resources we dedicate to the Community, but we must not lose sight of the fact that we as a group of nations came together to try to have an impact on world affairs of a beneficial nature. We are like-minded countries with democratic systems and we have, for the moment, abdicated the discussion of the major issues affecting the world to the two big powers. Because the European Community has not been able to resolve its internal problems its external presence has been diminished.

Thus the priorities are very simple. We need quickly to sort out our internal differences and we need very quickly to start asserting ourselves as a group of like-minded nations in the external debates of the world.

If your Lordships will allow me, I should now like quickly to deal with some of the internal problems. I shall not start with agriculture or the budget or the United Kingdom contribution, because I believe that internally there is something far more important than those. As a country, we are, like our other fellow countries in Western Europe, going through a massive period of structural change. We are now reaching a period when we are at the start of a change the like of which we have not known since the first industrial revolution. This is not something which has come about simply because of the recent recession. It has come about also because of the fundamental development of technology and the emergence of the newly industrialised countries, known as the NICs, which have moved into the basic industrial activities in which we previously led. This is because they have started from scratch with new equipment and new motivations, and, in steel, shipbuilding and textiles (one could name a whole range of these enterprises), they have secured a dominant position.

The result of all these things is that we have at present an unemployment level in the European Community of no fewer than 13 million persons. We have, as we know, some 3 million in the United Kingdom. That is the outward manifestation of this structural change which is taking place. We all know that it will not go away overnight and so it is my opinion that the first thing that the European Council should be concerning itself with is the implications of this structural change, the implications for our economy, for our society, for our way of life and for our financial position. This is the fundamental issue which we should be considering together. It is indeed a problem that we should be considering in this country in much greater depth than we are doing at the moment.

We ought to be doing the same with our colleagues abroad. That means that we ought to be re-examining the role of the Regional Fund and the Social Fund; and I must say that it disturbs me very much indeed that the United Kingdom should be one of the very few countries which are holding up the ESPRIT project. If I may explain to your Lordships who may not be familiar with it, the ESPRIT project is one by which the 10 most technologically advanced companies of the Community are banding together in providing half the resources necessary, the other half to be provided by the Community in order to develop the next phase of information technology, so that we can compete with the big strides being made by the United States and Japan. No single West European country can meet that challenge; we can only meet it together. I think it is sad that the United Kingdom should be one of the few countries standing in the way of that development.

If we are to cope with the structural change which we now face, we have to make sure not only that we are in the vanguard of technological development but that we also have clearly defined policies for the retraining and restructuring of industry and for the proper support of those who, through no fault of their own, are thrown out of jobs. All these things form part of what I believe, from the internal point of view, is the most important issue to which the European Council ought to be addressing themselves.

We next come to the very important problem of agriculture which we cannot avoid talking about, because agriculture takes up about two-thirds of the total Community budget, which is equivalent to £15 billion, of which £10 billion goes on agricultural support. I am not personally involved in agriculture. With my noble friend Lord Gormley, I was involved in another industry which dealt with the land, but we dealt with under it, not on top of it. So I recognise the problems that anybody dealing with physical factors has to cope with.

I think the farmers of this country and in the rest of the Community have achieved a remarkable amount in the last 10 or 15 years. From being an area which was dependent on massive imports of food from elsewhere, we have now become more than self-sufficient in most food products. The efficiency of our farming has enormously improved; and so we have to be very careful how we deal with this farming problem.

I do not think there is any solution in forcing prices down or altering thresholds in such a way that the farming community could be set right back in their achievements, but I believe the farming community would be the first to admit that there have to be modifications made to the CAP. I had the advantage recently, in preparation for my contribution to this debate, to have a chat with Sir Richard Butler, president of the NFU. It was clear to me that he and his members were ready to face the problems so long as they took account of the fact that solutions could not be rushed. If there is a criticism one could make, it is that this problem was not realised sooner. We have allowed the farm problem to go on too late—to the point now at which we are forced to take radical measures.

We should have recognised several years ago—indeed, I believe the Commission was continually drawing attention to this—that it was time to start modifying the farm support system in the Community. We have gone on and on, building up the cost of those operations until now we are faced with a situation where, if we take measures which are really draconian, we would harm the farming community beyond measure, and if we take inadequate measures it would be very difficult for us to resolve the financial problem in the Community.

This has arisen, I regret to say, through delaying a decision on these matters for so long; and so there is a very difficult issue to be faced here. Nevertheless, proposals have been put forward by the Commission following on the Stuttgart agenda. I am of the opinion that if we have the proposals discussed at the proper levels in the Community and not just left for heads of government to decide, we could get near an agreement on what might be achieved.

We next come to the related budgetary problem. The fact is that, whereas nearly 90 per cent. of those employed in the Community are in industry and in services and some 10 per cent. in farming, the disbursements from the Community budget are in the ratio of 65 to 66 per cent. to farming and the remainder to the rest. Therefore, this disequilibrium has to be corrected over a period of time. It is going to take time. I do not think, as I have indicated, that we can rush the solution of the farming problem without seriously harming the achievements of farming. Equally, we have very pressing problems on the industrial front on restructuring and on technological development.

Then, we have the problems of the new entrants, Spain and Portugal. We are all agreed, on political grounds, that they must be welcomed in the Community, but they are countries in great economic difficulty and they will undoubtedly present further burdens for the rest of us. Therefore, I think it is virtually certain that if, on the one hand, we are trying to solve the farming problem without too serious a disruption and, on the other hand, we recognise the difficulties on the industrial front, as well as realising that in enlarging the Community we are welcoming in two countries that are in great economic difficulties, some increase in the resources available to the Community will be inescapable. We shall be unable to do all these things within the present resources. I am very glad, reading carefully the debates in another place, that Her Majesty's Ministers of State have made it clear that their minds are not closed on the subject and that they are prepared to consider this.

Then we come to the question of the sharing of the burdens. I think everybody agrees that the situation now is one that cannot go on and that the British position in particular, with the special circumstances of Britain, has been the one that has suffered most. Although since 1980 a number of rebates have been agreed, I think the Government are right in saying that that cannot continue. We have got to find a long-term solution to this problem.

The solution is not impossible. The Commission have proposed a way round it and Her Majesty's Government have proposed a way round it. I believe there is general agreement that this has got to be resolved and I would have thought that if people of good will got together, they would be able to resolve it. What it needs, however, is for the European Council and heads of government to be very firm that they want the Stuttgart agenda to be carried out and to be very firm in stating that they have the political will for these matters to be resolved. But I very much hope that they will not try to resolve them themselves, because they will get into a bargaining situation in which, with their knowledge of the subject—being heads of state and of government they cannot know everything, however important they may be—the time available will not enable them to deal with these very difficult and complicated matters.

The importance of resolving these issues is not only because the Community internally cannot continue without their solution, but also because it would enable the Community as a body of like-minded countries to exert much more influence in international affairs. At the moment, we are weak in the world's deliberations. The big debate on nuclear arms is going on between the two super-powers. If we speak up on our own account—any one of us in the European Community—our voice will be drowned. If we were to speak together in that big debate, as a concentration of populations with like-minded views held by people who are likely to be at the very centre of any possible nuclear conflict (we hope that it will never occur), we could play a very big role.

We should also like the heads of state and of governments of the Community to be discussing, having resolved by determination the internal problems, the problems in the Middle East and in Central America, and the big sovereign debt problem. All these are matters of very great moment to us all, on which as individual European countries we can have very little impact. But grouping ourselves together we could make a considerable impact. So my thesis is that as a group of countries we want to resolve these problems, and we must devise ways to do it. The objective is not only to resolve a number of internal problems, but also to make sure that the Community can play its role in international affairs.

The Community is now at its turning point, and there are three possibilities ahead. At the worst, if Brussels does no better than Athens, and if there is total disagreement, then the Community could disintegrate into an unseemly squabble over what would appear to be matters of detail. Each country would then be forced to take its own measures to cope with the consequent situation, and the whole concept of European co-operation would suffer a setback for several years. That is the worst possibility.

The medium possibility is that we could have a botched-up attempt to cope with the situation for a short period, trying to get through for a year or so. But that would be bad, too, because as a result the fundamental issues would get worse. So we hope that the outcome will be different from that: that we shall have the European Council recognising that it must leave the detailed negotiations of these very complicated issues to the appropriate Ministers and officials; that it should concern itself with strategy; and that the main issues with which it should concern itself are the problems of restructuring and world peace. My Lords, I beg to move for Papers.

3.45 p.m.

The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne)

My Lords, your Lordships will be grateful to the noble Lord, Lord Ezra, for introducing his Motion today, and I welcome the opportunity created by the noble Lord to set out the Government's approach to the current negotiations on the future of the European Community. Your Lordships will derive added pleasure from the fact that my noble friend Lord Fanshawe is to make his maiden speech.

Let me say at the outset that the Government are fully committed to enabling the Community to realise its full potential, both in the interests of the member states themselves and so as to permit the Community to play the full role in international affairs to which the noble Lord has alluded. The noble Lord, Lord Ezra, would be the last to claim that the British Government should not fight, and fight hard, for British interests. But in calling on the Government to take a more constructive attitude in the next European Council, the noble Lord implies that if only we were to press our case a little less vigorously then we could achieve a breakthrough which would resolve the Community's current difficulties.

I regret to say that I do not think that the issue is as simple as that. For the question we have to answer, and which underlies the noble Lord's Motion, is: what kind of Community are we working for? Britain has never been a country to pay lip service to grand and unrealisable schemes promising European union but ignoring the steps needed to achieve it. We do have clear and far-reaching ideas for the future development of the Community, which I shall describe in a moment, but we also believe strongly that the Community's blueprint is already laid down in the Treaty of Rome and that fulfilment of the treaty, in letter and in spirit, is the best way of determining the direction which the Community should take.

The Community as a whole is now faced with a crisis which the authors of the Treaty of Rome could not have foreseen. The Community's future viability depends upon how we resolve that crisis. The easy way out would be to agree that the Community should be allowed to increase own resources while settling, in exchange, for vague commitments about the control of expenditure and about resolution of the budget problem, which is a Community problem but one which has affected Britain in an acute form. I hope that that is not what the noble Lord means by "a more constructive attitude". It would be irresponsible to commit ourselves to raising more revenue without first ensuring that we have achieved the essential reforms which would prevent a recurrence of our present problems; nor would the Government recommend such an outcome to Parliament, which must ratify any increase in own resources.

The approach which the British Government have adopted throughout the negotiations is not to close our minds to an increase in own resources but to say that such an increase would be considered on two conditions: first, provided that we achieve control of agricultural and other expenditure; and, secondly, provided it is accompanied by a fair sharing of the budget burdens. We cannot ignore the fact that the common agricultural policy is consuming 65 per cent. of the budget. There is, therefore, less money available for other policies to which the Community should be devoting itself.

We must ensure that Community spending, particularly agricultural spending, is properly under control; in other words, finance must determine expenditure, and not the other way about. Similarly, it is right for the British Government to seek, not a special deal on the budget but that the Community should honour its obligations, which are implicit in the Treaty of Rome and explicit in the commitments we have received, to ensure that we do not bear an unfair budget burden.

The problem has been recognised. But it has until now been dealt with in a series of ad hoc settlements. Now that other member states are seeking major changes to the basis of the Community's finances, it is right that we must insist that the problem of budget inequity is dealt with on a fair, lasting and systematic basis.

In June 1983, Community heads of government, meeting in Stuttgart, reached agreement on the terms of reference for a major negotiation intended to resolve these problems. The fact that the terms of reference for the post-Stuttgart negotiations include both a solution to the United Kingdom budget problem, as an integral part of the Community's revised financial arrangements, and the need to find ways of controlling CAP expenditure, is a measure of how far we have moved in the Community since the Government took up these issues after we took office in 1979. What was at that stage regarded by other member states as exclusively a British problem has now been recognised for what in reality it always was—a problem for the Community as a whole.

It was of course a major disappointment that, following the far-seeing programme laid down at Stuttgart, the Athens European Council failed to take any decisions. What is important now is to avoid trying to apportion blame but rather to ensure that there is no repetition of Athens and that decisive progress is made at the next European Council on 19th and 20th March. Your Lordships should be in no doubt that the British Government will play their full part in helping to ensure that solutions are reached. My right honourable friend the Prime Minister has already had talks with the French President on 23rd January and with the Italian Prime Minister on 27th January. There will be other bilateral talks between now and the March European Council.

In turning to the detail of these negotiations, let me start with the CAP. The basic problems of the CAP stem from the fact that developments in farming technology and the development of larger and more efficient farming units—the noble Lord, Lord Ezra, referred to these during his speech—have resulted in a steady increase in agricultural productivity in a situation of static or declining consumption. This, combined with the provisions of the common agricultural policy, which provide for virtually unlimited price support, regardless of the level of production, has inevitably resulted in the wholesale generation of surpluses. The Community is therefore faced with the problem of how to dispose of surplus produce for which there is no economic market in the Community and which can only be exported at enormous budgetary cost and to the detriment of our commercial relations with third countries.

If we are to tackle the fundamental problem of agricultural surpluses, it will be necessary to pursue a rigorous policy of price restraint, involving no increases for products in structural surplus and a review of the market regimes for each commodity so that all production is no longer guaranteed, irrespective of the market situation. In considering ways of reforming the CAP, we must avoid solutions which either increase the burden on consumers or attempt to transfer the problem to third countries.

Necessary though these reforms are, we do not consider they will be sufficient in themselves. In our view, therefore, the commodity-by-commodity approach must be reinforced by the setting of a strict financial guideline for the CAP to ensure that it does not continue to devour the lion's share of the budget and to rise, as it did last year, by 30 per cent. in one single year. This guideline would provide the frame-work within which the Commission would make its price proposals and the Council take decisions on CAP prices each year.

This brings me to the second main group of problems covered by the post-Stuttgart negotiations, namely, the Community's financial arrangements. The Community's present financial arrangements stem from agreements reached by the original six member states in 1970. They clearly reflect the interests and needs of the original members. We recognised at the time these arrangements were drawn up that they were likely to be disadvantageous to the United Kingdom both with regard to contributions to the Community budget and with regard to receipts, because the way in which Community expenditure had developed resulted in agriculture taking up a dominant share of the budget.

We drew this problem to the attention of our future partners in the negotiations for United Kingdom accession. Their response was to assure us that, should the operation of the Community's financial arrangements result in the development of an unacceptable situation for a member state, the Community institutions would devise appropriate solutions. This assurance, since restated on a number of occasions, has provided the basis for our subsequent claims for redress.

As a result of the negotiations which have taken place since the present Government came to office in 1979, we have secured a total refund for the years 1980 to 1983 amounting to more than £2,500 million. This is approximately two-thirds of our unadjusted net contribution over that period and represents a satisfactory outcome to the Government's efforts during this period to secure alleviation of the inequitable burden placed on us by the operation of the Community's financial arrangements.

Had it not been for the resolute approach adopted by this Government, the level of redress which we would have secured would have been very much less. Had we acted differently we could justifiably have been accused of neglecting the fundamental interests of the British people. I would also note in passing that in achieving this successful outcome we have inadvertently, but no less happily, brought about a sea change in the policy of the Labour Party, or at least in the attitude of its leader. Mr. Kinnock has now discovered that thanks to our efforts Britain is better off in the Community than outside it. Needless to say, the British people had come to that conclusion long before he did.

The recent problems concerning the 1982 risk-sharing refunds and the difficulties with the European Parliament over the 1983 refunds reinforce our view that we must now get away from ad hoc arrangements and devise a new system which will provide a solution to the problem of budgetary imbalances for as long as the problem lasts. We have put forward our "safety net" proposal with this in mind and a number of other member states have put forward alternative ideas. We remain firmly convinced that what is needed is an equitable and durable system providing a satisfactory level of redress. Your Lordships would not expect us to continue to put up with a situation in which the United Kingdom remains the second largest net contributor to the budget while ranking only seventh in terms of Community prosperity.

There remains the question of possible new own resources for the Community. If existing Community policies, notably the CAP, operate unchecked, the Community will, later this year, come up against the 1 per cent. VAT ceiling. A number of member states have argued that forthcoming enlargement of the Community and the need to develop new policies mean that the Community's own resources should be raised above the 1 per cent. ceiling. We have not dismissed that case out of hand. We have made it clear to our partners that we are ready to consider such an increase, subject to the two conditions of effective control of existing Community expenditure, particularly the CAP, and a lasting solution being found to the problem of budgetary inequities.

This brings me to the third main aspect of the post-Stuttgart negotiations, namely, the development of new Community policies. Our commitment to Community membership is not a negative one. We are anxious to see it develop in new areas in which, by acting together, the Community can achieve more than member states acting alone.

We face major technological challenges. We should make the most of our collective strength in the new technologies to take on the competition of the United States and Japan. We must also tackle more mundane problems, many of them not a question of new initiatives but of implementing the original Treaty of Rome. We want to see completion of the Common Market. This means removal of the remaining barriers to the mobility of goods and services; streamlining of frontier formalities to ease the passage of goods traffic; liberalisation of transport, including air transport; and implementation of a liberal regime for non-life insurance services. We have made firm proposals in all these fields—and in others, including the area in which the noble Lord. Lord Ezra, has outstanding expertise; namely, solid fuels policy. We believe that the Community should devote to solid fuels the same amount of attention it has given to other energy sources, including nuclear and oil. All our proposals are cost-effective; many of them are cost-free. Indeed, if, as we are trying to do, we could minimise delays for commercial traffic at Community frontiers, that alone would save £500 million per year.

I share the frustration expressed in the Motion that the internal problems of the Community are damaging its image in the world and distracting it from playing the international role that it should. Its role is already very important. In the external field, it has been making, and will, I trust, continue to make, a leading contribution to the maintenance and strengthening of the open trading system, which is essential if there is to be a sustained and balanced recovery in the world economy. We attach the greatest importance to the commitments in this area assumed at the Williamsburg summit and at the OECD Ministerial.

The Community has already—with the declaration of the December Foreign Affairs Council—started to implement those commitments, and we look to other developed countries to do the same. The member states of the Community already work together to help meet the needs of the developing countries, both through favourable trade access and through aid. The Community gives a third of all aid given by developed to developing countries—a half in the case of aid to the least developed. We very much want to see a successful outcome to the current negotiations on a successor to the second Lomé Convention, which expires in 1985.

But Europe's promise is still greater than its performance. We have long felt that the Ten, with their shared interest and ideals, should make a much more significant impact in international affairs. The United Kingdom has played a leading part in the development of political co-operation. In the British presidency in 1981, my noble friend Lord Carrington was able to achieve some useful improvements, and the successes of political co-operation since have not been negligible. Particularly topical is the Stockholm disarmament conference—the latest product of the CSCE process. The Ten have played a key role in steering this in directions helpful not just to Western interests but to peace and stability in Europe. The Ten have a long way to go before their joint political influence matches their economic might. But the example I have just cited shows that we can act together. We need to learn to do so more consistently.

I should add that the post-Stuttgart negotiations must of course lay the framework not only for the present Community of Ten but for the future Community of Twelve. Both Spain and Portugal were disappointed at the outcome of Athens. We need to get on as fast as we can with the accession negotiations so that Spain and Portugal can join the Community by 1st January 1986, as they wish.

The decisions which the Community will have to take in 1984 are vital for its future development. By concentrating on these problems the Government cannot be accused of being unconstructive. My right honourable friend the Foreign and Commonwealth Secretary likened the European Community to a car with a flat tyre. The flat tyre should not be the most interesting thing about the car; but until you have repaired it, you cannot drive the car at all, let along get anywhere in it. The Community now has an opportunity to set itself on a sound basis. It should be a giant on the world stage; but it is now hamstrung. Of course we are negotiating in the British interest; that is what your Lordships would expect of us. But we are negotiating also in the interests of the Community as a whole.