Foreign Affairs Council: Luxembourg (Hansard, 20 June 1984)

§ Baroness Young
My Lords, with the leave of the House, I shall now repeat a Statement on the Foreign Affairs Council meeting in Luxembourg on 18th and 19th June 1984 which is being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows: "I will, with permission, Mr. Speaker, make a Statement on the outcome of the Foreign Affairs Council which met in Luxembourg on the 18th and 19th of June. I represented the United Kingdom together with my right honourable friends the Minister for Overseas Development and the Minister for Trade. Ministerial negotiating conferences with the Portuguese and the Spanish and a ministerial meeting of the European Community/ Yugoslavia Co-operation Council were held in the margins of the council.
"The council discussed preparations for next week's European Council. I made clear that if discussion at Fontainebleau was to be of real value, the negotiations started at Stuttgart must also be completed.
"On the budget question, I took the opportunity to have a series of separate meetings with each of my Community colleagues, the President of the Commission and the French Presidency. I made clear the view of the British Government that it remains to complete the negotiation on the basis of the texts circulated by the French Presidency at the Brussels European Council by reaching agreement on the notional figure for 1983. This would determine the scale of our contribution to the Community in future years.
"There was also some discussion of the Commission's proposal for a loan to cover the forecast budget overrun in 1984. A number of member states again expressed reservations about the proposal, reinforced by a recent report by the European Court of Auditors which criticised the Commission's estimates. I reiterated the need for further savings to be found. The issue was remitted to the July Budget Council.
"The council agreed that further work on budget discipline should be undertaken by Finance Ministers. I reminded the council that an effective system of budget discipline remains one of our conditions for an overall settlement.
303 "The Council discussed the Community's position for the ministerial negotiating conference in Luxembourg on 28th and 29th June between the Community and the African, Caribbean and Pacific signatories of the Lomé Convention on a successor to the present convention.
"The council also considered possible changes in the conciliation procedure for reconciling disagreements between the European Parliament and the council. In view of Danish opposition, however, no text was adopted and discussion was adjourned.
"At the ministerial conference with the Portuguese, the Community presented declarations on agriculture and on some outstanding points in the external relations chapter. At the ministerial conference with Spain, the Community presented substantive declarations on agriculture and industrial tariff transition.
"The council formally adopted the new regulation for the European Regional Development Fund, following a successful conciliation procedure with the European Parliament.
"The council discussed a package of 15 directives designed to agree common technical standards for industrial products throughout the Community. We made clear that the few outstanding technical problems should be speedily resolved so as to clear the way for adoption of the package and of the Common Commercial Policy Regulation to which it has been linked.
"We underlined the importance of agreement at the July council on arrangements for continuing supplies of duty-free newsprint for 1984."
My Lords, that concludes the Statement.

§ Lord Cledwyn of Penrhos
My Lords, we are grateful to the noble Baroness for repeating the Statement. Once again it seems that little of major substance has been achieved by the meeting or by the series of bilateral talks held by the Foreign Secretary—there has been little more than recognition of the fact that the need for a settlement is even more urgent.
Reports which I have read in the press indicate that the Government would not move unilaterally. What is being asked of the other EEC members is some return for our acceptance of a compromise budget settlement. Have any specific proposals been formulated in preparation for the important Fontainebleau Summit at the beginning of next week to which the Statement refers and which will, we hope, be successful? For example, is it the case that the Government are now prepared to offer a compromise budget settlement of a figure between 1.25 billion ECUs (the original demand of £750 million) and 1 billion ECUs, (£600 million) which our Nine partners offered us? I wonder whether the noble Baroness could comment on that? Are the Government now ready to settle at a halfway mark, and has that a chance of being accepted?
These matters have been speculated upon in the press over the past 24 hours and perhaps the noble Baroness can clarify the position. Furthermore, will 304 the noble Baroness tell us the Government's response to the insistence of Germany that financial reform of the Community should be linked to the successful outcome of the enlargement programme involving Spain and Portugal? Do the Government support that?
In the ministerial conference with Spain, to which reference is made in the Statement, can the noble Baroness say whether the question of Gibraltar, and all that that entails, was raised? Finally, we note that the Government have submitted the blueprint on the future of the Community. Can the noble Baroness say whether that will be discussed at Fontainebleau, and will the discussion on the blueprint depend on the prior settlement of the budget problem?

§ Lord Gladwyn
My Lords, we, too, should like to thank the noble Baroness for repeating an even more than usual anodyne Statement regarding the activities of the Foreign Ministers. I should like to ask the noble Baroness three questions. As regards the budget—and I think that this is more or less the same question as was asked by the noble Lord, Lord Cledwyn—is it not becoming increasingly clear that the actual amount which separates our attitude from that of all of our colleagues is rather trivial? Moreover, in order to obtain the refund of £750 million, which is our due, and a reasonable settlement of the whole problem posed by our contribution, shall we not have to come rather closer to the solution which our colleagues are now proposing themselves?
On the so-called budget discipline, which I suppose is largely concerned with the agricultural problem, are we right in supposing that we shall, for our part, have difficulty in maintaining the milk quota now imposed on our own farmers, if there is any reason to suppose that our colleagues are not imposing a similar quota on their farmers?
Finally, as regards the apparent Danish veto on what were obviously reasonable proposals for conciliation in respect of relations between the Council and Parliament, does not this reinforce the recent suggestion of the French President that the time has now come—as we would think—to have such matters as these settled by qualified majority voting?

§ Baroness Young
My Lords, I should like to thank both the noble Lord, Lord Cledwyn, and the noble Lord, Lord Gladwyn, for their response to this Statement. I think that the first question of both noble Lords was: as the gap in the negotiating position between our own Government and those of other governments in the Community does not seem large, cannot the gap now be bridged by negotiation? The position is that we believe that with flexibility throughout the Community it should be possible to resolve the remaining differences. All sides have moved and what is now needed is one more move to clinch the agreement.
As my right honourable friend the Secretary of State made clear to other member states, we have only a limited margin for manoeuvre. We are willing to join with other member states in an effort to reach agreement; but there must be movement by the other member states too if they want to see the negotiations successfully concluded. As the noble Lords have said, 305 it is the fact that the gap may not seem large but by definition it is larger for us than it is for the others. The fact is that every step that we take to meet the Nine has to be paid for exclusively by the United Kingdom; whereas the cost of every step that the other member states take is shared out among nine countries. There is therefore a difference.
The noble Lord, Lord Cledwyn, also asked me a particular point about the proposals for the Spanish accession to the European Community. As the noble Lord will know, we have supported these proposals. However, we have said with regard to Gibraltar that the restrictions on movement which exist between Spain and Gibraltar are incompatible with the obligations which Spain will assume as a member of the Community. We fully support the Spanish accession, but it would be inconceivable for Spain to join the Community and not allow ordinary traffic across its frontiers with Gibraltar.
The noble Lord, Lord Gladwyn, asked me about the super-levy. My understanding is that this is a tax on milk production on which agreement was reached at the meeting of Agricultural Ministers in March, and it does apply of course to all the countries of the Community. For our own part, the £50 million Outgoers Scheme which was announced by my right honourable friend the Minister of Agriculture is to provide aid specifically for those farmers who now wish or need to move out of dairying. I have no information that the super-levy is not being applied to other members of the Community, because it was an agreement reached between all the countries of the Community.

§ Lord Harmar-Nicholls
My Lords, is it the Government's intention to continue to resist the idea of the internal loan from member states? Was it not understood at the beginning when the Treaty of Rome was formed that they would not have power to borrow? If they borrow internally, that may well set a precedent which would encourage them to go on spending beyond their income, which is one of the great problems that we must overcome. Therefore, do the Government intend to resist this precedent which, as I say, may well cause dangerous over-spending in the future, as it has done in the past?

§ Baroness Young
My Lords, the Government's view on the question of the loan is that we want to see the expenditure of the Community brought under control, including of course the agricultural expenditure. We also wish to see a final settlement of our own budget questions, which have been the subject of all this negotiation, before we can consider any increase in the Community's own resources—the problem which the whole question of the loan is designed to relieve.