§ 3.46 p.m.
§ The Lord President of the Council (Viscount Whitelaw)
My Lords, with the leave of the House I shall now read a Statement made by my right honourable friend the Prime Minister on the European Council held in London on 5th to 6th December.
"With permission, Mr. Speaker, I shall make a Statement about the European Council held in London on 5th to 6th December. I presided over this Council and was accompanied by my right honourable and learned friend the Foreign and Commonwealth Secretary. The conclusions of the 995 council have been placed in the Library of the House.
"There were two major themes for this Council: business and jobs, and safeguarding the open society. We noted that economic policies of member states had been steadily converging and that inflation in the Community was expected to fall to 3 per cent. in 1987, the lowest level for 20 years. The Council unanimously endorsed an action programme for jobs, which stems from an initiative taken by Britain supported by others earlier in our presidency.
"The programme puts emphasis on training, including up to two years' vocational education and training for school leavers and greater involvement with industry. It stresses also action to help the long-term unemployed, including schemes for job counselling. The programme will be carried forward by social affairs Ministers at their Council later this week. In future the employment programme must have priority in the use of moneys allocated by the European Community's Social Fund.
"Linked with the need to create the conditions for a growth of jobs, the Council looked at ways of encouraging small and medium businesses—one of the main sources of new jobs. The Community has agreed to over £1 billion of loans for small businesses. This will be available among other things for investment in new technology.
"The Council endorsed the principle of the Commission's proposal both to simplify VAT and to make it possible to lift the VAT threshold for small businesses up to about £25,000. This is in line with our aim to take unnecessary burdens off the back of enterprise.
"Completion of a large, single market in Europe has been a major priority of the British presidency. Thirty-two measures have already been adopted or agreed since July. These include an important step towards complete freedom of capital movement within the Community; action against counterfeit goods; common testing and marketing standards for pharmaceutical products; common standards for television by satellite; and common standards for a pan-European telecommunications system using digital technology.
"A similar effort will be made on digital cellular radio, a market worth billions of dollars in which Europe has a technological lead. We shall continue to press for easier access to cheap air fares.
"The Council recognised the crucial role of an open world trading system in achieving more growth and more jobs. We noted that the Community has already launched an action in the GATT against Japan's barriers to trade. That action may need to be reinforced unless we see early results.
"The second main theme of this meeting was concerted action to protect our citizens against terrorism, drugs, illegal immigration and abuse of asylum. Terrorism can strike anywhere, and it is vital that we act together in our common defence, as we did successfully in the case of Syria. We therefore 996 agreed on a policy of no concessions under duress to terrorists or their sponsors; and on solidarity between member states in their efforts to present terrorist crimes and to bring the guilty to justice. Free movement for bona fide travellers within the Community must go hand in hand with better controls at the Community's external frontiers.
"On drugs, the Heads of Government endorsed a seven-point plan covering intensified co-operation between police and Customs authorities; a decision that illicit drug traffickers' assets will be liable to confiscation throughout the Community; exchanges of drugs liaison officers; and exchanges of information on the treatment of drug addiction and on education about the dangers of drug abuse.
"The European Council also decided to launch a sustained information campaign on the prevention, early warning and treatment of cancer; and to designate 1989 as European Cancer Information Year. It asked the Council and Commission to ensure Community-wide exchange of information on AIDS, and to consider what further co-operation in research might be taken against the spread of this dreadful disease.
"The President of the Commission, M. Delors, reported on his review of future Community financing. He will be visiting Community capitals early in 1987 in order to set out his views and discuss options, covering future financing, the common agricultural policy and the structural funds.
"The European Council made quite clear that in the meantime work must be carried forward and decisions taken on issues already before the Council. The Agricultural Council is now in session with the aim of reaching such decisions on the reform of the arrangements for milk and beef.
"The Heads of Government discussed East-West relations and arms control. There was wide support for the points which I agreed recently with President Reagan at Camp David. We issued a statement on the Soviet occupation of Afghanistan which is now nearing the end of its seventh year.
"Foreign Ministers discussed the problems of the Middle East and the Iran-Iraq war and stressed the importance of maintaining contact with the Gulf states. They also discussed South Africa and Latin America.
"It has been a priority of the British presidency to make the Community work better for the benefit of individual citizens. This was a practical and successful Council relevant to jobs, to our future prosperity within the Community and to the future safety of our citizens."
My Lords, that concludes the Statement.
§ Lord Cledwyn of Penrhos
My Lords, we are grateful to the noble Viscount for repeating this long Statement. No one would seek to argue that this was a great reforming summit meeting. We welcome the agreements reached on a number of subjects and the specific measures agreed on terrorism, AIDS, the fight against cancer and the traffic in drugs. We hope that the steps agreed to be taken will be effective and show quick results. 997 We are glad to know that Community health ministers are to meet later to consider further possible action on AIDS. I hope that the noble Viscount will confirm that funds will be available, if necessary, to deal with any recommendations made by the ministers.
Would not the noble Viscount agree that the big internal problems of the Community were swept under the carpet at this summit meeting? It would be unfair to blame the Government entirely for this. But it would equally be wrong for the House to ignore the facts as they are. For example, agriculture was not dealt with, in spite of the Community's unmanageable food mountain: 16.5 million tonnes of grain; 1.38 million tonnes of butter; 1 million tonnes of milk powder; and over half a million tonnes of beef.
What is to be done with all this food? Is it to be dumped on the world market at subsidised prices? Is the noble Viscount able to tell us whether we can afford the subsidies at the present time? Is butter to be sold to the Soviet Union at cut prices?
Do the Government believe that the CAP should be reformed? Alternatively—to put it another way—will the noble Viscount say whether there is any real prospect that the leaders of the Community nations are proposing to take practical steps to reform the CAP?
There is reference in the Statement to greater competition between airlines. What about steps to reduce the fares? There is a passing reference to this as something that may be done in the future. The fact is that travellers within the Community are waiting for lower fares and I should be grateful if the noble Lord would give some realistic assessment of the likelihood of that. There is a term in the Statement which speaks of easier access to air fares. What does that mean? What is the practical machinery which will enable easier access to air fares to be achieved?
Another major problem is the Community's budget crisis about which everyone is aware. No real action was taken at this summit. The deficit, at the moment, is £2 billion. Will the noble Viscount give an indication of what steps are proposed to deal with this deficit? We are told annually at this time that the Community is about to go bust. Somehow or other, when the time comes, it avoids going bust. All of us are delighted that the big bang does not take place.
However, it would be useful to know whether new machinery is being discussed to avoid this fearful moment in the Community's history when everyone says that the worst is about to take place, and that bankruptcy is around the corner.
We were glad that the leaders discussed employment seriously. It appeared to me however that there was some disagreement as to the methods to be used. On the whole it was the British recipe that was accepted. While we welcome the expenditure of £1 billion on small businesses in the Commuity, it would help if the noble Viscount would tell us what is to be the United Kingdom share of that sum.
One feels that there was no unity of purpose and no unity or major policy for dealing with the problem of unemployment. I do not blame the Government, but I must say, after listening to the noble Viscount reading the Statement, that I find it a depressing 998 document against the background of the Community's immense problems.
§ Baroness Seear
My Lords, we on these Benches would also wish to thank the noble Viscount the Leader of the House for repeating the Statement. I realise it is conventional practice to make polite remarks about Statements but on this occasion I find it very difficult to conform to that practice.
We have been told that this is a practical and successful Council. Practical and successful by what standards? Of course we are glad that there is some progress towards the internal market. That is of the greatest economic importance and we on these Benches give it our absolute, wholehearted support. On worthy matters—with which it is very difficult to disagree—such as fighting terrorists, AIDS, and cancer, we are glad to see that there was agreement. I should like to ask the noble Viscount whether the Government's devotion to fighting cancer runs to increasing funds available of cervical smears, for which we have asked on a great many occasions in your Lordship' House.
Having said that, perhaps I may say that this report is evidence of an occasion on which the Government, albeit strained, have managed to swallow what, to use the Prime Minister's favourite adjective, was a teeny-weeny gnat and choked completely on the camel. The fact is that the Community is in crisis and we have a summit which we have called practical and successful. It has not tackled the CAP, which we know is a mammoth problem and a mammoth obstacle in the way of development along the lines which the Government themselves wish to see. How can the Government talk glibly about increased support for employment from the social fund when it is so well understood that the social fund is limited for cash because over 60 per cent. of the money is going into the CAP? Until that is tackled there is—not to mince matters—a considerable degree of humbug in pretending that we are doing anything of substance.
As the noble Lord, Lord Cledwyn, said, the financial position of the Community is serious in the extreme. M. Delors has said so and he is anxious that something should be done, as well he might be. However, that matter does not even figure in the summit. It seems that in order to have a successful summit the Government have excluded from discussion all those matters which are controversial. However, unfortunately those matters are the matters which are important.
Will the Government give a real lead in dealing with the CAP? Until we stand up to the vested interests which prevent change, we shall get nowhere. We on these Benches, who supported the European idea before Members on either of the other two Benches were interested in it, are deeply concerned that so little progress has been made.
§ 4 p.m.
§ Viscount Whitelaw
My Lords, I am grateful to the noble Lord, Lord Cledwyn, for his reception of the Statement. I do not know whether I should be grateful to the noble Baroness, Lady Seear, because she did not want me to be grateful. I should certainly be grateful to the noble Baroness if she wanted me to be grateful, but 999 as she did not want me to be grateful I do not think that I should be ungracious in not being particularly grateful.
The noble Lord, Lord Cledwyn, referred to the meeting as a great reforming summit meeting. In effect, the noble Baroness, Lady Seear, said that it had not done anything at all. When I come to deal with the remarks of the noble Baroness I shall point out a good many matters that the summit achieved. It was somewhat unfair to leave on one side those matters which were done and to concentrate on those matters which certainly were not done this time but which certainly will be tackled.
The noble Lord, Lord Cledwyn, welcomed the agreement on terrorism; the action against terrorism, cancer and drugs; and the action in respect of research. The noble Lord also asked about the funds to tackle AIDS. I am in a position to say that the Government have already provided considerable funds to tackle AIDS. Indeed, I do not think that funds will be the problem. The problem will be deciding on what is the best action and the success of research into some form of antidote which will be effective. That matter will certainly be pursued very actively, as is stated in the Statement. We must all deeply hope that such research work will lead to productive results.
The noble Lord also referred to the question of employment. He welcomed the £1 billion and asked what would be our share. I cannot give the noble Lord a direct answer today because it obviously will depend upon the projects which are put forward. I should have thought that this was a matter which would be very widely welcomed. It will be up to the British Government to put forward the projects as quickly as possible and to get the maximum share that they clearly can. I can assure the noble Lord that we shall do that.
The noble Lord also raised a question about air fares. No one can say that the British Government have not tried extremely hard, as the communiquée points out, to achieve cheaper air fares, and they have taken a considerable initiative on that particular front. That we have not been successful so far is certainly not to be laid at the door of the British Government, but we hope that progress will be made on what I accept at once from the noble Lord is an extremely important matter.
The noble Lord said that internal problems had been swept under the carpet. I am glad that, having made the point, he then came back to the question of jobs and welcomed what was said on that matter, because I think that after the last summit it was the Leader of the Opposition, Mr. Kinnock, in another place who blamed the Government for doing nothing about jobs and for taking no initiative on them. Therefore it can be said that this time that criticism would certainly in no way be justified under the British presidency. Indeed, a considerable effort was made. I should have hoped that that particular initiative would be welcomed by the noble Baroness, Lady Seear. In a way it was welcomed by the noble Baroness, though she did not quite say so. The noble Baroness has given a great deal of support to training of all kinds, and that is one of the initiatives that was taken at this time together with the other measures on employment.
1000 Therefore I am sure that she would welcome those initiatives even though perhaps on this occasion she did not bring herself to say so.
The noble Baroness equally suggested that, against the background of the problems of the CAP, action on terrorism, AIDS and cancer was of little account. So far as concerns individual citizens in the Community, I should have thought that all those matters were of very considerable account and would be seen to be so.
Against that background I turn, in answer to both the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, to those problems that were not solved; for example, the problem of the CAP. That matter is being pursued by the Agricultural Council and by M. Delors in his discussions with the countries concerned and in the Commission. The Agriculture Council is meeting this week and, as the communiquée says, it is seeking to make progress on the problems of both milk and beef. No one can pretend that they are easy problems either for this country or for the other countries of the Community, but it is certainly the case that they are being tackled.
The noble Baroness, Lady Seear, said that M. Delors was neglected altogether by the meeting. That really is not so because it says clearly on the future financing that M. Delors reported first, is visiting the Community capitals and is pursuing the very great need as regards finances. It may be said that he did not get the results at the conference, and I am not arguing about that. However, to say that he was totally neglected does not quite accord with the facts of what the communiqué says about his efforts.
We then come to the question of financing, which is a very serious matter. Perhaps in answer to both questions I should say what the position is at present. The 1.4 per cent. VAT ceiling cannot be changed except by unanimity and with the agreement of the national parliaments. It is also right for us to point out that the United Kingdom abatement system agreed at Fontainebleau can only be changed by unanimity. As the noble Lord, Lord Cledwyn, said, it is true that too big a proportion of the Community budget is devoted to storage and disposal of agricultural surpluses. Next year, after the Commission has reported on future financing and agriculture and the Agricultural Council achieves results, as one hopes it will, there will be an opportunity for the Community as a whole. to look more fundamentally at the whole question of agricultural spending. I agree profoundly with the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, that that is an extremely important priority.
§ Lord Taylor of Gryfe:
My Lords, I very much welcome the references in the Statement to dealing with the problem of unemployment in respect of job counselling, training and so on. However, I regret that there is no reference to any discussion of high interest rates which are certainly impeding investment which must be the basis of stimulating new industrial development. I wonder whether any consideration was given at the summit to the question of securing reductions in interest rates, as we in this country are suffering from the highest interest rates in any of the EC countries?
I should like also to ask about the availability of money allocated from the European Community 1001 Social Fund which will be directed towards relieving unemployment. In these new moneys being distributed from the Community to areas of high unemployment in the United Kingdom, I should like to know whether there will be a reduction in regional aid funds from the Government under the additionality provisions or whether any new funds which are allocated from the Community to areas of high unemployment in this country will be in addition to the regional entitlement.
§ Viscount Whitelaw
My Lords, I am grateful to the noble Lord, Lord Taylor, for the welcome which he has given to the job counselling proposals and some of the other measures on unemployment. I agree very strongly with the noble Lord when he stresses the importance of interest rates. No doubt interest rates were discussed, but as I was not present I cannot tell the noble Lord exactly what was said. I can only tell the noble Lord what was in the communiqué. However, it is all part of the Heads of Governments' consideration of the various proposals for growth of new jobs and recognises the measures which have already been taken.
As to the noble Lord's other more technical point about the allocations from the Social Fund and how they will work in the areas of high unemployment, I fully appreciate the particular interest the noble Lord has in this matter. I cannot give him an answer this afternoon. I am not sure that I shall be able to give him an answer even when I check with those concerned who were at the meeting, but I shall certainly do my best and, if I can, I shall write to the noble Lord.
§ Lord Auckland
My Lords, the Statement laid emphasis on cancer research. Can my noble friend the Leader of the House say whether there were discussions with the various medical experts within the Community? Can he expand on these measures to combat cancer? Bearing in mind that a breakthrough is now more and more on the cards, can he say what methods are being used to get to grips with this terrible problem?
§ Viscount Whitelaw
My Lords, in answer to my noble friend Lord Auckland, clearly this was a general discussion that took place, and the Heads of Government naturally left it to the medical people concerned, to follow up what had been said in general terms in the more detailed proposals which would certainly be necessary. But of course they referred to a sustained information campaign on prevention and early warning in treatment, and those are clearly vitally important matters. They designated 1989 as the European Cancer Information Year. It will of course be for the medical experts to take considerable advantage of the lead given by the Heads of Government on this occasion.
§ Baroness Burton of Coventry
My Lords, I too had noticed in the Statement:We shall continue to press for easier access to cheap air fares".I wonder whether I might take this up with the Lord President. Does he recall that on Saturday the Prime Minister stated that this summit meeting had demonstrated the relevance of the Common Market to 1002 the ordinary people in Europe? I want to ask the Lord President: would he agree that the liberalisation of civil aviation with cheaper air fares is indeed of relevance to the millions of ordinary people in Europe travelling both on business and on pleasure?
I raise this matter because I think that the Government have tried, but I wonder whether the Lord President would agree with me that continuing "to press for easier access" is going to get us exactly nowhere. Nowhere at all. I wonder whether the House would agree with me that to get anywhere on this matter we need somebody like the Prime Minister with her energy, single-mindedness, and her consistency to press for these matters. I ask the Lord President whether, occupied though she is, he could bring this matter to the attention of the Prime Minister. I am convinced that we need her help. We shall get nowhere without it. I should be most grateful if the noble Viscount could do that.
§ Viscount Whitelaw
My Lords, perhaps I should say to the noble Baroness, Lady Burton, that I should have been very surprised indeed if she had not raised that point on cheaper air fares, in view of the many Questions she has properly asked on this subject in the past. I think I can only take note of what she has said about the need—which I know my right honourable friend the Prime Minister certainly recognises—to do everything we can to make progress on this particular front. I can assure the noble Baroness that my right honourable friend is disappointed that we have not made greater progress so far. I shall certainly pass on to her the remarks of the noble Baroness.
I think I forgot to answer the noble Lord, Lord Cledwyn, when he asked me what "easier access to cheap air fares" meant. I am bound to say that I am as puzzled as he is. Easier access to cheaper air fares can only mean getting cheaper air fares so far as I am concerned. I do not think that there can be any other way of putting it.
§ Lord Ezra
My Lords, the noble Viscount mentioned in the Statement the continued determination of Her Majesty's Government to work for a single market within the Community. He indicated various steps that had been taken with that in mind. Would the noble Viscount inform us whether he thinks that progress so far made will mean that the objective of creating a real and effective single market within the European Community will be achieved within the timespan laid down?
§ Viscount Whitelaw
My Lords, I think that the noble Lord has properly recognised some of the 32 measures which have already been agreed and adopted since July on this matter. This is a considerable tribute to those of my right honourable friends who have been engaged in many Councils. I can say that because I have not been engaged in any of them. Those who have been have done a considerable amount to make progress on this important front. But of course I could not give an answer to the noble Lord's question.
Earl De La Warr
My Lords, my noble friend, when talking about agricultural produce, mentioned milk and beef, but so far as I can remember he did not 1003 mention cereals. As there are, I think, 16½ million tonnes of cereal in surplus stock I wondered whether that was an omission. Before I sit down I should perhaps declare that I am a dairy farmer.
§ Viscount Whitelaw
My Lords, it was not an omission, because as I understand it the Statement said:The Agricultural Council is now in session with the aim of reaching such decisions on the reform of the arrangements for milk and beef.Therefore, in my remarks I stuck carefully to what had clearly been considered in the Agricultural Council. I cannot therefore help my noble friend Lord De La Warr any further, except to say that I think it would be clear—this is not in any of the briefs that I have, this is just in my personal knowledge—that in fact a good deal of cereal in a comparatively good harvest this year has been sold, and much less has been stored this year than in some previous years which must be a good thing so far as it goes.