HL Deb 22 February 1984 vol 448 cc779-82

3.48 p.m.

Baroness Young

My Lords, with the leave of the House, I shall now repeat a Statement 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 will make a Statement on the outcome of the Foreign Affairs Council held in Brussels on 20th and 21st February, at which I represented the United Kingdom and my right honourable friend the Minister for Trade was also present. A Co-operation Council with Israel on 20th February and a ministerial conference with Spain on 21st February were also held in the margins of the Council.

"The Council gave unanimous support to my proposal for a request for the Parliament's opinion on the 1983 refund regulations to be given in time for them to be considered at the next meeting of the Foreign Affairs Council on 12th/13th March.

"There was a follow-up discussion to the talks which had taken place over the weekend on preparation for the European Council next month. It was agreed that the Commission should now produce a document covering all those aspects of the negotiations not already being handled in other specialist councils. The paper will therefore cover the central budgetary issues—budget imbalances and budget discipline—for discussion at the March European Council. Separate discussions between individual member states will of course continue in the meantime.

"The Council agreed a substantive declaration on the agricultural transitional arrangements with Spain, which was presented to the Spaniards at the ministerial conference.

"The Council reached agreement on the arrangements which will govern Greenland's relationship with the Community from 1st January 1985. There will be a treaty amendment linked to agreements on fisheries which balance the development of Greenland's own fisheries with the needs of the Community. The change in status is subject to ratification by member states in accordance with their constitutional procedures.

"The Council had a first discussion, without taking any decisions, of the Commission's proposal to stabilise imports of certain cereal substitutes.

"The Council agreed a declaration emphasising the Community's concern at the build-up of protectionist pressures in the United States. The Council also discussed the proposal for a new Common Commercial Policy Regulation. Work is to continue on the technical aspects of this.

"The Council reviewed progress in negotiations to renew Voluntary Restraint Agreements for steel imports from EFTA suppliers and Spain."

My Lords, that concludes the Statement.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Baroness for repeating the Statement. We much regret that the meetings were so disappointing. Would not the noble Baroness agree that, unless urgent action is taken and a settlement achieved at the Summit in Brussels on 19th and 20th March, a very grave crisis will follow? Does she think that bankruptcy is a possibility in those circumstances?

We welcome the support of the EEC Council referred to in the Statement and their decision to request a special meeting of the European Parliament before 12th March—an essential pre-requisite, as I understand it, if the rebate is to be paid before the end of the financial year—and we hope that the budgetary problem will be resolved. If there is no progress, can the noble Baroness say what steps the Government will then take? Do they propose to withhold part of the contribution for 1983–84?—that is, equivalent to the sum owing? Also, can she say whether, in those circumstances, they would agree to an increase in the amount of own resources?

Finally, are the Prime Minister's projected meetings with Chancellor Kohl, Prime Minister Lubbers of the Netherlands and President Mitterrand designed to help resolve these very serious difficulties which are impending?

Lord Gladwyn

My Lords, I thank the noble Baroness for repeating this important Statement. Am I right in thinking that parliamentary approval is necessary before we can get our agreed refund of £475 million, or whatever it is? If so, what are the prospects of the Parliament agreeing to such a refund?

With regard to the budgetary issues referred to in the Statement, I take it that by "budgetary imbalances" is implied the whole vexed question of the excessive present expenditure on agriculture, involving of course the production of absurdly large surpluses. "Budget disciplines" I take it we must understand to refer to the allegedly unfair contributions made by some members to the common funds. Are we to assume that on these two crucial issues there has been no unanimity at all in the discussions during the last two months between all the experts of the countries concerned and, that being so, that everything depends on the ability of the Commission at the last minute to produce some compromise capable of being accepted by the European Council on 4th March? I fear the chances of this appear to the uninitiated observer at the moment to be extremely dim!

Baroness Young

My Lords, I should like to thank the noble Lords, Lord Cledwyn of Penrhos and Lord Gladwyn, for their reception of the Statement. The noble Lord, Lord Cledwyn, asked a number of questions and his first was: if we do not get the refund that we are entitled to, would we consider withholding our payments? The view of the Government is that, of course, we want to secure payment of the bulk of our refunds by the end of March and we do not want to precipitate a premature and needless confrontation over this matter. My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs raised the issue of Parliament's attitude at the Foreign Affairs Council on 20th February. The council agreed to adopt my right honourable friend's suggestion to send a letter to the Parliament under Article 139 of the EEC Treaty, formally requesting the Parliament to give its opinion on the refund regulations in good time for the Foreign Affairs Council on 12th and 13th March. I hope that what I have said answers the first point put by the noble Lord, Lord Cledwyn, and also the point put by the noble Lord, Lord Gladwyn, on the need for Parliament to give approval for the refund.

On the question of own resources and whether or not we would withhold our contributions, my right honourable friend the Prime Minister made it clear at the end of last year that if the Community does not meet its obligations on the 1983 refund, we would have to take steps to safeguard our position; but of course we would not wish to do so prematurely and we hope that, following this letter that has been written to the European Parliament, the Parliament will give a favourable opinion on the repayment of the refunds to which we believe ourselves entitled.

The noble Lord, Lord Cledwyn, also asked about the meetings which my right honourable friend the Foreign Secretary is to have. Of course, I have no doubt that the issue of the budget will be one of the matters to be discussed at the meetings. This is a matter which clearly is of great importance not only to us but to the whole of the European Community.

The noble Lord, Lord Gladwyn, asked what was meant by "imbalances" and "budget discipline". On budget discipline, we believe that there should be a ceiling on the amount of expenditure and on the amount of expenditure which should go to the common agricultural policy. As to imbalances, it is of course a question of the disproportionate amount which we as a country pay into the budget. We hope very much that the Community will look positively at our proposals for a safety-net in order to meet our specific budget problem.

Lord Cledwyn of Penrhos

My Lords, I am very grateful to the noble Baroness for those answers. Would she not agree that it is very important to underline the gravity of the developing situation within the Community? There are three weeks to go before the next summit, which will be a crucial occasion. Would she be prepared to say to the House and to the country that unless a settlement is achieved a very serious economic crisis will follow?

Baroness Young

My Lords, I should be perfectly prepared to agree with the noble Lord, Lord Cledwyn, that this is a very serious matter. We hope very much that we shall get a settlement by the March meeting, and of course it is a very serious matter not only for us but for the whole Community as the year goes on. Not only is it important in terms of getting a settlement on the budget and on the CAP, but of course until that happens the Community cannot think positively about many of the other things which it might be doing.