HL Deb 30 June 1988 vol 498 cc1725-34

4.30 p.m.

The Lord Privy Seal (Lord Belstead)

My Lords, with the leave of the House, I shall repeat a Statement about the European Council in Hanover on 27th to 28th June which has been made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, I shall make a Statement about the European Council in Hanover on 27th to 28th June which I attended with my right honourable and learned friend the Foreign and Commonwealth Secretary. The Council's detailed conclusions have been placed in the Library.

"The Council dealt with two main issues: the progress towards completion of the single market by 1992; and arrangements for progressively closer economic and monetary co-operation in Europe. First, the single market: the Council was able to note that over one-third of the measures in the European Commission's White Paper on the single market have now been agreed. Agreements reached in recent weeks cover a number of subjects of particular interest to the United Kingdom: the full liberalisation of capital movements by 1990 for most EC countries, the mutual recognition of professional qualifications and the opening up of the road haulage market by progressive abolition of lorry quotas.

"The Council agreed that priority should be given over the next 12 months to decisions on: the opening up of public purchasing; further liberalisation of banking and other financial services; common standards for manufactured products; and the registration of patents and trade marks throughout the Community. The list does not include the harmonisation of indirect taxes, where the Council simply noted the further studies set in hand by Economic and Finance Ministers. The Government's view is that such harmonisation is not necessary for completion of the single market.

"In considering the social aspects of the single market, the Council noted that removing the obstacles to growth offers the best prospects for creating jobs and spreading prosperity. It also encouraged better protection for health and safety at the work place and easier access to training on which a major initiative was taken during the United Kingdom Presidency.

"The Council reaffirmed the objective of enabling citizens of European Community countries to move freely throughout the Community, but also stressed the need for effective measures to combat terrorism, drug abuse and organised crime. It is very satisfactory that there is growing recognition of the need for effective safeguards in this area.

"Secondly, on economic and monetary cooperation, the Council agreed to establish a committee of the governors of central banks appointed in their personal capacity. The President of the Commission will take the chair and there will also be a second Commission representative, Mr. Andriessen, and three additional members: Mr. Lamfalussy, Director-General of the Bank for International Settlements; Mr. Boyer, President of the Banco Exterior of Spain; and Mr. Thygesen, Professor of Economics in Copenhagen.

"The committee's task will be to study and propose concrete steps towards the progressive realisation of economic and monetary union. That goal was of course set out in the preamble to the Single European Act which was approved by this House. The committee will report through the Council of Economic and Finance Ministers to the meeting of the European Council in Madrid next June.

"The Council approved unanimously the reappointment of M. Jacques Delors as President of the Commission for a further two-year term from 1st January 1989.

"Foreign Ministers discussed a number of political co-operation subjects, concentrating particularly on East-West relations, Afghanistan, the Middle East, South Africa and Latin America. The Council conclusions on all these subjects are recorded in the communiqué.

"Finally, we were able to note with satisfaction that the important decisions taken at the meeting of the European Council in February on budget discipline and agriculture have now been translated into binding legal instruments. Legislation to give effect to the new arrangements for financing the Community budget, including the new own resources decision, will be laid before the House tomorrow.

"Following the Council. I had a meeting with the Taoiseach to discuss a number of current issues in Anglo-Irish relations. We reaffirmed our commitment to the Anglo-Irish Agreement and agreed to maintain, indeed strengthen, cooperation against terrorism.

"The outcome of this Council was very satisfactory for the United Kingdom. We have confirmed that the way forward in Europe lies through the creation of wealth and jobs, as obstacles to trade and burdens on business are steadily removed. Thanks to this Government's policies and the response of those who work in industry and commerce, British firms will be particularly well placed to take advantage of the opportunities which the single market in Europe offers."

My Lords, that concludes my right honourable friend's Statement.

4.38 p.m.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord the Leader of the House for repeating the Statement. We welcome the agreements listed in it. But as we move from one summit to another, it is clear that, while there is some agreement in certain areas, there are other matters upon which there is a sharp conflict of opinion and others where no clear policy is defined. For example, in that part of the Statement which refers to the need to: combat terrorism, drug abuse and organised crime", there does not appear to have been any policy decision or any action proposed to be taken in those fields.

To take the two main issues as they are described in the Statement, the 12 leaders agreed that their objective was: the progressive realisation of economic and monetary union". But the Prime Minister is reported as saying that she did not like the idea of a single currency. Can the noble Lord say whether that is the case? Can he further indicate whether the Government fully support the study which has been set up under the chairmanship of the Commission President to propose concrete stages towards monetary union? Can he tell the House what the point of the study is if the Prime Minister is opposed to its central concern—that is the single currency—in principle?

Can the noble Lord also say whether the Government support the proposal for a European central bank? We understand that that matter is likely to be discussed by the Study Committee. Does he genuinely believe that monetary union is a feasible prospect under current circumstances?

We welcome in general the new measures to improve conditions for the Community workforce and for better Community rules for health and safety at work. Can the noble Lord confirm that the Government support these measures which aim to bring the benefits of the internal market to employees as well as to employers?

We warmly welcome the warning issued about the consequences of executing the Sharpeville Six. Can the noble Lord say whether the terms of the Statement mean that further diplomatic and economic sanctions may be imposed by the Community against South Africa and whether the Government would support such measures? We also welcome the call for the release of Nelson Mandela and all other political prisoners detained in South Africa.

Finally, as regards the new legislation for financing the Community budget which was referred to, do the Government expect that legislation to go through Parliament in this Session, given the difficulties which they are experiencing with legislation?

Lord Jenkins of Hillhead

My Lords, perhaps I may also express my gratitude to the noble Lord for repeating the Statement and express our welcome for the splendid last few weeks of the German six-month Presidency. Can we now be assured that the Prime Minister is not merely acquiescing dismissively in the Committee under M. Jacques Delors which has been set up to look into the questions of a European central bank and a possible common currency but is taking those matters seriously? Last week the Prime Minister certainly gave the impression of dismissing them.

Will the noble Lord agree that that is a slightly ludicrous position? Given the power structure of Europe, if we have an issue which the French and German Governments are taking seriously, we cannot dismiss it as not being serious. We may disagree about the matter, but we cannot say that it is not a major issue for Europe.

Is it not also the case that the train of Europe is now gathering speed with a momentum that frankly surprises me? I would not have expected it two years ago. But it is gathering momentum in a quite remarkable way. Will not the noble Lord recognise that if the attitude of the Prime Minister, as expressed in the House of Commons last week, persists, we shall be left once again merely waving goodbye to the train from the station platform as we did in 1951, in 1957 and in 1978 for three separate European initiatives, for which we have since paid a heavy price. Can we be assured that that will not happen for a fourth time and that we have learnt from previous experiences?

4.45 p.m.

Lord Belstead

My Lords, I am grateful to the noble Lords, Lord Cledwyn of Penrhos and Lord Jenkins of Hillhead, for their reception of my right honourable friend's Statement which I have repeated. The noble Lord, Lord Cledwyn, specifically said that he thought it was disappointing that no definite policy was set out as regards the combating of terrorisim, drug trafficking and organised crime. Perhaps I may make it clear that there is no doubt that the Heads of Government all want the removal of all obstacles to freedom of movement. However, the European Council has consistently maintained that the means of achieving that objective must be consistent with the fight against terrorism and drug trafficking. Its conclusions reaffirm that commitment. Although that may not be quite the detail that the noble Lord wants, I believe that the affirmation of that principle is very important indeed.

Both noble Lords commented on the Statement as it refers to monetary co-operation. In essence, they both said that they felt that my right honourable friend was perhaps less enthusiastic than others in some way concerning the objective of European monetary union. I first make the point that the language to be found in the communiqué from the summit is the language which is to be found in the Single European Act. That Act went through both Houses of Parliament under the Government headed by my right honourable friend, and we stand by that language.

However, on the point specifically put to me by both noble Lords, a working group has been set up under the chairmanship of M. Jacques Delors and the task set for the working group by the European Council is to study and propose concrete steps towards the objective, reaffirmed in the Single European Act, of progressive realisation of economic and monetary union. Clearly neither creating a European central bank nor issuing a common currency are early steps in the process. Indeed, the Bundesbank governor recently reminded us that even completion of the process does not necessarily require either development.

The noble Lord, Lord Jenkins, has such immense experience in the field that I hesitate to cross swords with him. However, when he speaks of waving goodbye to the train, I simply make the point that we are not exactly left down the line. The United Kingdom is a long way up the line from many of our colleagues in the European Community in abolition of capital movements, exchange controls and many other things. We have gone along the railway line and I believe that all members of the Government are glad that we have done so.

The noble Lord, Lord Cledwyn, asked a question concerning Sharpeville and South Africa. We do not support the extension of the imposition of sanctions and our policy on sactions remains the same as it has always been. As regards the very serious Sharpeville situation, we have, as he will know, been extremely active in this area. Our concern has been to ensure that due account should be taken of the fact that the legal process is not yet exhausted. We will certainly stick to that, and hope that the story will have a satisfactory ending.

The noble Lord, Lord Cledwyn, asked about the legislation to which the Statement refers. The Commons timetable for the legislation is Second Reading beginning on 11th July and the remaining stages after the Recess. We therefore expect the legislation to come before your Lordships' House, I would guess, during the month of October.

Lord Kennet

My Lords, perhaps I may thank the noble Lord the Leader of the House on behalf of SDP Peers also for reading the Statement. We are inclined to agree with what has been said by the noble Lord, Lord Jenkins, about the train, despite the most elegant disclaimer by the noble Lord the Leader of the House.

It is always interesting to compare the British Government's Statement about a summit with the summit statement itself. Perhaps I may draw the Government's attention to certain matters which were in the summit statement but not in the government Statement, and ask whether their exclusion means that the Government feel less happy about them than they do about the matters mentioned in their own Statement.

Those matters are, first, associating the European Parliament more closely with the Council at this stage of achieving the unified internal market; the importance of measures to prevent evasion and fiscal fraud; and the concept of the integration of environment considerations in all areas of economic policy-making—something we have been asking for for years. On the political co-operation side, there is the welcome given to the establishment and recognition of relations between the Community and the Soviet Union and the Warsaw Pact countries; the statement that the status quo in the territories occupied by Israel cannot be sustained; and the appeal to the South African Government to release Vol. 498 Nelson Mandela on his birthday, which falls in this month. Does the fact that those matters are not mentioned in the government Statement mean that the Government feel less strongly in favour of those points than of the points which they singled out for mention in the Prime Minister's Statement?

Lord Belstead

My Lords, it is important for me to make the point in answer to the noble Lord that the summit which the Prime Minister recognised in her tribute to the presidency as workmanlike—I reiterate what the noble Lord, Lord Jenkins of Hillhead, said in this respect—concentrated on two main areas. These are mainly the subject of the Statement which I have repeated and mainly also the subject of the questions I have been asked from the Opposition Front Benches: progress towards the completion of the single market by 1992 and arrangements for progressively closer economic and monetary cooperation in Europe. Therefore, all the other questions which the noble Lord has put to me, interesting though they are, are to that extent subsidiary.

Also, the foreign affairs issues which he raised, although enormously important, are not the subject of this Statement. Of course relations between the Soviet Union and the European Community are extremely important. I think that many of us working in politics—I am sure that I share this thought with the noble Lord—believe that the position of the European Community and the Soviet Union, clearly coming closer together, is historically of enormous importance. Incidentally, so far as concerns Arab-Israeli and Lebanon matters, the position of the Community is very well known and does not change.

I am not in any way trying to belittle what the noble Lord said. However, I think it is important to say that this very workmanlike summit, as my right honourable friend the Prime Minister has termed it, concentrated on those two main issues which do not fall within those listed by the noble Lord in his question.

Lord Jay

My Lords, will the Government be extremely cautious in accepting any agreement which would mean the abandoning or weakening of the United Kingdom Government's control over the sterling exchange rate? Without that we should be left with very little control over our own economy in a period in which we are drifting into ever-greater external deficit.

Lord Belstead

My Lords, my short answer to that question is, yes. Caution will certainly be our watchword.

Lord Broxbourne

My Lords, further to the reference in the Statement to the Single European Act, could my noble friend tell the House whether consideration was given at the summit to the effect and implications of Article 100A of that Act? The article substitutes a so-called new co-operation procedure for important matters hitherto requiring unanimity under Article 100 of the EC treaty.

Lord Belstead

My Lords, I did not catch the subject to which my noble friend attached his question. If he was attaching it, for example, to the main issues which are the subject of the Statement, I recognise that the question is very important. Unanimity of course plays a part. Would the noble Lord like to clarify that point?

Lord Broxbourne

My Lords, if my noble friend will study the procedure under Article 100A of the Single European Act he will see that it substitutes a so-called co-operation procedure which does away with the requirement of unanimity in important matters affecting the national interest.

Lord Belstead

My Lords, perhaps I may then have the luxury of picking out the issue which I think is of great national interest. That is the area both noble Lords on the Front Benches opposite asked me about, namely monetary co-operation. I should like to make it absolutely clear—if that is the issue we are talking about—that the Single European Act itself states that, insofar as further development in the field of economic and monetary policy necessitates institutional change unanimity is required.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that we are a little puzzled by the Prime Minister's apparently different statements in different places? Is he aware—I am sure he is—that in the House of Commons last Thursday the Prime Minister appeared to rule out completely any idea of monetary union and certainly of a central bank? She said that that would mean one single unitary state or federal state and would not need 12 different governments and 12 different parliaments.

It appears that at Hanover, in agreeing to the committee to examine a European central bank and monetary co-operation, the Prime Minister changed her mind. Can the House be assured that her statement last Thursday in the House of Commons interprets properly government policy? Can we also be assured that the statement by Monsieur Mitterrand that he and Germany would pull the others along if they resisted monetary union will be resisted by the Prime Minister herself?

Further, could I ask the noble Lord if he will deny rumours that there is to be a European cross-border police force? If such a police force has been proposed can he give an assurance that Parliament would be given the opportunity to decide whether or not that happens?

Lord Belstead

My Lords, my right honourable friend the Prime Minister always states government policy when speaking in another place. Perhaps I may make it clear that my right honourable friend was party to the setting up of the working group. Nonetheless the deliberations of the working group can proceed in looking at important practicalities in the area of monetary union without having to enter the area of a European central bank or a common currency.

When the noble Lord asks me what the British Government's attitude will be at the end of the day, my answer is the one I gave to my noble friend Lord Broxbourne—that if we reached that stage unanimity is the order of the day and the Government would make up their mind at the time. So far as concerns President Mitterrand, I do not answer for the French.

Finally, the noble Lord asked me about cross-border co-operation and police forces. I am not in any way trying to be dismissive of what the noble Lord has said, but I think that there is nothing I can add to what was said in the Statement. If I may say so, the noble Lord, Lord Cledwyn, made a very important point. Although there is no detail in the Statement about these subjects there was clearly agreement on the principle that in dealing with the enormously important matters of terrorism, drugs and organised crime, the first thing which has to be considered by the member states is how to deal with those matters, borders or no borders. As to how those matters are pursued, I am afraid that there are no details that I can give the noble Lord from the Dispatch Box today.

Lord Mayhew

My Lords, will the noble Lord remind the House briefly of the reasons why the Government are not more enthusiastic about European monetary union?

Lord Belstead

My Lords, I do not think that there is anything that I can add to what I have already said. A working group has been set up, the president of the Commission is in the chair, and very distinguished people will take part in the group. They will report back through the finance ministers. I think we ought to wait until we hear from the finance ministers on this particular matter.

Lord Ardwick

My Lords, surely we accepted monetary union when we entered the Community; but it has always been a rather distant goal, particularly since it implies some measure of federalism. There is an intermediate goal—the EMS—which will have to be strengthened when the Single Act comes into force. It is rather surprising that the Statement mentions nothing at all about that aspect of the subject.

Lord Belstead

My Lords, it may be that the Statement says nothing about that subject, but that is for the very good reason that the Government's position remains the same as it has always been.

Lord Ezra

My Lords, can the House be given some clarification concerning the prospects for the freer movement of individuals, which was the first point to which the noble Lord referred? He said on the one hand that the objective was that individuals would be able to move around more freely within the Community from 1992 onwards. On the other, he referred to the very desirable objective of dealing with drug trafficking, etc. Will the two be related, and will the result be that the movement of individuals from one country in the Community to another will remain as restricted as it now is for those reasons? Or will the two issues be separated, and will those of us who are not engaged in those nefarious activities be able to move more freely while action is taken to deal with the others in the necessary manner?

Secondly, in respect of the other matter—monetary union and a central bank—may we take it that as the United Kingdom has agreed to the working party being set up its report will be considered quite objectively and we in this House will have the opportunity of fully debating its conclusions?

Lord Belstead

My Lords, perhaps I may reply very quickly to the noble Lord. I think it is important that I should underline the fact that the United Kingdom joins with all colleagues in the Community in wanting to see liberalisation of the market within Europe; that is what 1992 is all about. It applies to the point put to me by the noble Lord concerning the movement of people.

When one comes to deal with life and death matters of terrorism, organised crime, and indeed drug trafficking, the Statement says, I believe rightly, that it is very satisfactory that there is growing recognition of the need for effective safeguards in that area.

So far as concerns the well-worn matter of the working group under Mr. Jacques Delors, as I have said that working group is to report back through the European finance ministers. I think that we in Parliament, as indeed the Heads of Government in the Council, will need to await news when it comes back from the European finance ministers.

Lord Hatch of Lusby

My Lords, does this Statement not illustrate the arrogance and inconsistency of the Prime Minister and the Government in respect of foreign affairs? It would appear from the Statement that the Government wish to go into Europe but only on their own terms, just as they act in the Commonwealth and at the United Nations. I should like the noble Lord the Leader of the House specifically to expand on that part of the Statement which refers to the Sharpeville Six and the attitude to South Africa. Is it not the case that the British Foreign Secretary stood on his own against the rest of the foreign ministers of the EC who wished to take strong action, including both diplomatic and economic sanctions, if clemency were not shown to the Sharpeville Six; that he stood out against that action; and that he had the communiqué altered solely because British policy so far as its attitude to South Africa is concerned is out of step with the rest of the EC, the Commonwealth and the United Nations?

Lord Belstead

My Lords, I think that the noble Lord, uncharacteristically, is being a little less than generous when he refers to my right honourable friend the Prime Minister. My right honourable friend has led this country to play a leading role in Europe. It is not a question of going into Europe; we are in Europe and we are playing a leading part in Europe.

As regards the second question put by the noble Lord, I should like to make it absolutely clear that we have fully supported appeals by the foreign ministers of the Twelve, by the Toronto summit, by the United Nations Security Council and by the European Council about the Sharpeville Six. On 15th March my right honourable friend conveyed to President Botha our hope that he would exercise his prerogative of mercy.

Lord Hatch of Lusby

My Lords, I was talking about action—

Noble Lords


Lord Hatch of Lusby

I was not talking about words, my Lords. Words have been used for a long time about South Africa, and we have seen the results.

Noble Lords


Lord Hatch of Lusby

I asked what action the Government are taking.

Lord Belstead

My Lords, the reason "order" is being called is that there is a paragraph in the Companion which recommends that Statements should take no longer than 20 minutes. I think that the noble Lord has had quite a good go.