§ 4.17 p.m.
§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)
My Lords, I beg to move that the Bill be now read a second time.
This Bill is very short. It also appears at first glance, with its Eurospeak of "own resources" and "undertaking(s) … confirmed … within the Council", to be fairly technical in nature. Nevertheless it sets the seal as far as the United Kingdom is concerned on a major review of the European Community's finances and policies.
I should like to start by outlining what that review involved and what its outcome was. Having outlined the context, I shall then explain what the Bill itself does. Finally, if your Lordships wish to raise specific queries, I shall be happy to try to answer them at the end of today's debate.
The future financing review, as it has come to be known, started in February of last year with the publication by the European Commission of a wide-ranging package of proposals. Those proposals contained both good and bad features as far as the United Kingdom was concerned. On the plus side they included measures to keep spending within agreed limits and in particular to tighten up control of the common agricultural policy. But the Commission was also looking for an increase of almost 50 per cent. in the ceiling of contributions to the Community budget, a large cut in the abatement of the UK's contributions which had been agreed at Fontainebleau in 1984 and a tax on oils and fats. The proposals also involved changes in the way budget contributions are calculated and a large increase in the Community's structural funds.
We made clear in the negotiations that followed: first, that any further increase in resources must be accompanied by effective and legally binding controls on spending; secondly, that agricultural surpluses must be reduced; thirdly, that the Fontainebleau abatement must not be diluted; fourthly, that there should be no oils and fats tax; and finally, that all the issues at stake had to be settled together. We could not agree to some parts of the proposals and leave the rest till later.
Not all member states shared these aims. Few were as committed as we were at the outset, for example, to bringing agricultural and other expenditure under 753 tighter control; some took the view that the Fontainebleuau abatement should be phased out.
I might add in passing that when we debated the Commission's proposals here almost exactly a year ago, following a report by the committee chaired so ably by the noble Lord, Lord Kearton, we were urged in some quarters to modify our objectives and to be more flexible in the interests of obtaining a satisfactory settlement. Well of course some flexibility is always needed in negotiations of this sort, but so is firmness. And I am pleased to say that by combining flexibility and firmness we achieved in the end all of the main objectives which I have just outlined.
That result was eventually achieved, after long negotiations, at the Brussels European Council in February of this year. After further discussions, a series of legal measures was agreed by the Council by June of this year to give effect to that agreement. The agreement was a wide-ranging one and it needs to be seen as a whole. I should therefore like, if I may, to give a few words of explanation about the main elements in that package.
The key area is of course reform of the CAP—control of agricultural spending and reduction in agricultural surpluses. The February package includes five major improvements. First, the guideline limit for agricultural spending is now legally binding. It will grow at no more than 74 per cent. of the rate of growth of Community GNP. which is likely to mean a real growth of around 2 per cent. a year, compared with real growth of 10 per cent. a year between 1984 and 1987.
Secondly, the loophole whereby the guideline could be exceeded in so called "exceptional circumstances" has been closed. In its place there is a monetary reserve of up to 1 billion ecu to cover extra costs if the dollar depreciates substantially. This money will only he called up if needed. And the reserve will work both ways so that provision for agriculture will be reduced if the dollar appreciates. The reserve is not expected to be used in 1988 and on current estimates we would expect reduced spending in 1989.
Thirdly, the Commission is monitoring spending each month for each main agricultural regime. When there is a risk of overspending, the Commission and, where necessary, the Council will take the requisite action.
Fourthly, automatic stabilisers have been introduced to control expenditure on all the main products. The stabilisers generally take the form of automatic price cuts if production exceeds agreed maximum quantities.
Finally, new stocks are from now on being depreciated systematically in the year of purchase, with special funds set aside to pay for the disposal of existing stocks. This should produce a normal stock situation by 1992.
Control of other expenditure was part of the package. It was agreed that there would be a series of legally binding sub-ceilings or annual limits on resources which would constrain the totality of spending. And an interinstitutional agreement was 754 reached between the Commission, the Council and the European Parliament under which all three institutions bound themselves to respect ceilings on each major area of Community spending up until 1992.
Budget management is another area where we pressed successfully for improvements to the previous arrangements. For example, provision for expenditure should now generally be weeded out of the budget, if it is not used, rather than being carried over automatically from one year to the next.
The package also involved changes to the regional, social and agricultural guidance funds—the structural funds. There will be an 80 per cent. increase in the funds between 1987 and I 992— a significant increase, albeit less rapid than that originally proposed by the Commission. And the funds will be better targeted. Although a large part of the funds will rightly be concentrated on the poorest regions. the UK can expect to continue to be a major beneficiary from the main fields of structural fund activity, to the tune of over —750 million a year.
I turn now to the area of own resources or contributions to the Community budget. The most important changes made by the European Council were as follows: first, an increase in the limit on own resources. This will be set at 1.2 per cent. of the Community's gross national product, with as I have already mentioned—annual sub-ceilings rising from 1.15 per cent. in 1988 to 1.2 per cent. in 1992. The increase in the ceiling represents an overall increase in resources available to the Community of some 25 per cent. This compares with an increase proposed by the Commission approaching 50 per cent. We now have a ceiling that will last until 1992 at least.
Secondly, a change in the basis for calculating member states' contributions of own resources. In particular, the base in each member state on which its contributions of VAT own resources are calculated will be "capped" at, or deemed not to exceed, 55 per cent. of its GNP—thus reducing the VAT contributions of some member states, including the UK. And there will be a new "fourth" resource based directly on shares in Community GNP. These changes are a welcome improvement from the point of view of the Community as a whole, as they will relate contributions to the budget more closely to national prosperity.
Thirdly, the Fontainebleau abatement system will be retained intact. Technically, it will be modified to bring it into line with the new structure of own resources. Thus our abatement will be reduced to the extent that we benefit from the capping of our VAT base and the introduction of GNP contributions. The overall effect, however, is that we shall be no better or worse off than we would have been with the continuation of the original Fontainebleau abatement system and old-style VAT financing (though with an increase in the VAT ceiling).
The last major element in the package was an intergovernmental agreement, or IGA for short, to provide extra funds for the 1988 budget. Noble Lords may ask why such extra money is needed The answer is that the February European Council agreement 755 covered the Community's revenue, expenditure policies and budgetary controls for the years 1988 to 1992. The 1988 budget therefore needed to be settled in a way consistent with that agreement. But it was known that the various national procedures for approving the new own resources arrangements could take some time to complete. The governments of the member states—as opposed to the Council of Ministers—therefore entered into an inter-governmental agreement to provide the sums needed to balance the year's budget until such time as the new rules on own resources would legally come into force.
The IGA amounts to some 7 billion ecu, of which around 1 billion ecu relates to the monetary reserve for agriculture which in practice we do not now expect to be needed this year. The UK's share of the IGA, excluding any contributions to the monetary reserve, is likely to be around £610 to £620 million. Our net contribution will, of course, be lower than this because of the extra receipts we shall obtain, as well as higher abatement of our contributions in 1989.
I have described the main elements of the whole package agreed by the European Council in February because that package needs to be seen as a whole; it stands or falls as a whole, and the Bill is therefore in a sense seeking Parliament's endorsement of the whole package. I should now like to explain more specifically why the Bill is necessary and what the main elements in it seek to achieve.
I have already mentioned that legal measures to implement the European Council's conclusions were agreed by June of this year. Most of the measures came into force once the Council of Ministers had adopted them. But the position is rather different for the Council decision on the own resources system which provides for the increase in the own resources ceiling, the restructuring of own resources contributions and the preservation intact of the Fontainebleau abatement system. Under the Treaty of Rome, the new own resources decision requires not only the unanimous agreement of the Council, but approval by member states:in accordance with their respective constitutional requirements".The first thing that this Bill does therefore is to seek Parliament's approval for that decision, which we have published as a Command paper.
Technically, the Bill aims to do this in very much the same way as approval was obtained for the current own resources decision in 1985. It would add the new decision to the list of treaties in the 1972 European Communities Act. This would have the effect of allowing payments under the new decision to be charged directly on the Consolidated Fund. as payments under the current decision are.
The second main element of the Bill is to seek Parliamentary approval for payments under the IGA—also published as a Command paper—by adding that IGA to the list of treaties in the 1972 Act. Again, the legislative procedure is similar to that used in 1985 to obtain approval for an IGA to help finance that year's budget.
I began these remarks by commenting that this Bill appears at first sight to be rather technical. In some 756 senses it is, but I hope I have said enough to show that it is also an important measure both for this country and for the European Community as a whole. if passed, the Bill would give approval to a new decision on own resources which brings the structure of contributions more into line with member states' ability to pay and which preserves intact our Fontainebleau abatement. The Fontainebleau system has worked well up to now, producing abatements of around £4.5 billion by the end of the year. The Bill will also enable payments to be made under the IGA which ended the uncertainty over the 1988 budget and allows the reforms agreed in February to be put into effect from this year. Finally, it will implicitly set the seal of approval on the whole range of measures agreed at the February European Council, including the much needed introduction of legally-binding controls on CAP spending. As such, I commend the Bill to your Lordships and trust that you will give it a Second Reading. I beg to move.
§ Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
§ 4.30 p.m.
Lord Bruce of Donington
My Lords, the House will be grateful to the noble Lord for having explained his Bill. I should like to say at the outset how much we appreciated the introduction of the Bill in another place by the Foreign Secretary, who said:I reject the argument that it is wrong for us ever to shift our views for the sake of a common position. If 12 nations are to make the most of their separate resources and talents, each must be ready to join in the search for agreement. But equally, I reject the argument that it is somehow bad form within the Community to fight for what we think right".—[Official Report, Commons, II/7/88; col. 43].We on this side of the House accept those words of the Foreign Secretary as representing the way in which we also would wish to address the Bill that we have before us this afternoon. The Bill is a Money Bill because, presumably, it deals with money. I cannot say that I accept the reasons that have so far been advanced for the Bill to be treated as a Money Bill, but it has been so certified by the Speaker in another place. All I wish to do about that aspect of the matter is to reserve the Opposition's position as to the true definition of Money Bills that come before this place from time to time.
As the noble Lord correctly pointed out, the Bill seeks to amend the European Communities Act 1972 in the same way as the European Communities (Finance) Act 1985 amended the Act of 1972 immediately following the Fontainebleau Agreement. Our understanding of the position at that time—and we ventured to articulate that understanding—led us to question whether the binding budgetary procedures, the new strict financial controls that were to emerge as a result of Fontainebleau, would be effective. It is because of the inadequacies of Fontainebleau that this Bill is before us this afternoon, particularly in so far as it deals with the 1988 budget and the overspending in the two previous years, contrary to the undertakings given at Fontainebleau.
We are talking about very serious matters involving the expenditure of considerable sums of taxpayers' money. I shall return to the term "taxpayers' money" with some emphasis a little later 757 on in the remarks that I shall address to the House. It is quite clear that the Bill does far more than, as the noble Lord indicated, merely to make up the shortcomings of Fontainebleau. It sets out expenditure for the four years to 1992.
In another place there is a well-known procedure of reviewing, arguing about, assessing the merits of and determining priorities for various items of government expenditure. That is done by presenting the Estimates to Parliament and by going through the Votes. As the noble Lord must know, much argument and disputation occurs when that happens in another place. There is normally a further round of such debates on individual Estimates when Supplementary Estimates are presented in the spring.
Here we have a situation in which the right of Parliament to discuss the merits and importance of the expenditure of very large sums of money on an annual basis is denied it. The Bill prevents Parliament from discussing those very large sums of money. Later on I shall give precise particulars of those sums as supplied by the Chancellor of the Exchequer.
An endeavour was made in another place to allow the somewhat abstruse provisions of the decision of the Council of Ministers to be incorporated as a schedule to the Bill. That was an innocent enough request. It was perfectly in order. This country's fortunes, to the tune of quite a few billion pounds over the next four years, are to be determined by the provisions of a decision. We requested in another place that that should be incorporated as Schedule 1 to the Bill. Even that request was denied.
If noble Lords will turn to Article 3 of the decision they will find a complete justification for the statement I have just made. The net contribution of the United Kingdom to the European Community is laid down in Article 3. Noble Lords will also find at col. 43 of the Commons Hansard of 24th October particulars of the intergovernmental agreement and the calculated contribution of the United Kingdom towards the deficiencies that have emerged in European budgets by virtue of the Fontainebleau Agreement having been ineffective.
Note 2 to the inter-governmental agreement states:The amounts paid by each Member State constitute non-repayable advances".I shall invite the noble Lord to explain the term "non-repayable advances". If one advances someone some money one expects it to be repaid; otherwise it is not an advance. The term "non-repayable advance" seems to be one of those remarkable examples of European jargon which in these particular circumstances stems from the fact that under the Treaty of Rome the Commission is not allowed to borrow money. Therefore it has to be a non-repayable advance. I hope that the noble Lord will be able to elucidate that point a little further.
What are we committed to in financial terms as a result of those abstruse calculations the basic essence of which has already been given by the noble Lord most lucidly in the early part of his remarks? I shall tell the House just what it will cost the United Kingdom in terms of taxpayers' money over the next three years. They are not fanciful estimates pulled out 758 of my imagination, fertile though it is, some tell me. They are firm statements by the Chancellor which were annexed to his recent Autumn Statement.
The figures that I give to the House are net contributions by the United Kingdom after taking account of all receipts, including the abatements by which the noble Lord sets so much store. He mentioned that the abatements had saved the United Kingdom £4,000 million over the past few years, but I think that it would have been franker for him at the same time to say that even after taking into account those abatements and every other receipt, it has cost the United Kingdom £8,000 million over the past seven or eight years.
I turn to the contribution which the Chancellor of the Exchequer thinks will result from the application of the Bill that is before us and the decision of the Council which it purports to implement. In the year 1989–90 the net contribution by the United Kingdom to the European Communities will amount to £1,970 million; in 1990–91 it will be £1,950 million—20 million less—and in 1991–92 it will be £1,580 million. I shall deal with the implications of those figures a little later, but they represent the net contribution to the European Communities from United Kingdom taxpayers' money. One is surely entitled to ask why it should be necessary for the United Kingdom to make those sums of taxpayers' money payable to the European Communities.
Over the past few days we have heard a lot about taxpayers' money. This House was discussing taxpayers' money in excelsis when, by a sudden influx of a great number of colleagues whom we had not seen for a long time, your Lordships succeeded in overturning a former decision of the House in order to make some charges for spectacles and dental treatment. That was deemed to be a vital matter of government expenditure that struck right at the roots of the stability of the United Kingdom's financial system.
We have had plenty of other instances. Every time some relief is sought, albeit for the humbler sections of our society—for example, in respect of homelessness, additions to the National Health Service and a whole series of matters—we are told that it is a matter of scarce resources that must be husbanded. That has been reflected, for example, in decisions to cut the number of coastguards around the United Kingdom, or the number of Customs and Excise officials, whose numbers go up and down like a yo-yo according to the will of the Prime Minister, and indeed in other matters. As your Lordships will recall, in the course of a very moving speech made by a noble Lord opposite whose name escapes me for the moment, even in order to safeguard our coastline on the eastern coast a grant of £5 million was refused.
Yet we are invited to pass this precommitment as a Money Bill without any further question. Perhaps we ought to bear in mind the words of the noble Lord, Lord Thorneycroft, who addressed this House a couple of nights ago on the vital nature of conserving taxpayers' money. He said:It is not right to say that £120 million is chicken-feed. I once resigned high office for half that figure". [Official Report, 8/11/88; col. 561.]759 What will he say about £1,970 million! If £120 million precipitated his resignation, I imagine that a sum of £1,970 million would give him apoplexy. The whole thing is quite ridiculous.
In addition to the question of the general scarcity of taxpayers' money for all projects which the Government do not like because they hate the welfare state and dislike providing money for those who are in much reduced circumstances, there is value for money to be considered. I am sure your Lordships will agree immediately that £1,970 million or thereabouts—because I can give or take £20 million or so—is not insignificant expenditure. Surely any prudent government want to seek value for money. We have been told so many times.
There has been local government legislation whereby local authorities have had to put services out to tender in order to be quite sure that the country gets real value for money. Detailed investigations are made into the question and working parties are set up to see whether value for money is being obtained. I want the noble Lord to apply his mind to consider what value we derive from the EC. For that matter, it concerns any noble Lord who has any sense of fairness as distinct from a rather ethereal belief in the star of the EC, with which as an organisation we are not concerned.
I can immediately think of one response to that question; namely, "Ah, but look how much of our trade is with the EC. It is so important that we should remain in such close association with the EC. Look at the benefits we get by reason of most of our trade being done with the EC". That could be so, but if subscriptions will be based on the degree of trade that one country does with another, someone from the EC ought to be paying an astronomical sum to the United Kingdom for the exports it sends here, which are our imports. Far from the United Kingdom being dependent on the EC for trade, the EC is dependent on us. At the present time our trade deficit with the EC is running at the rate of over £10 billion a year. Are we then to pay another subscription of nearly £2 billion to safeguard our right to import in vast quantities from the EC? No—that horse will not ride.
Let us look at this matter from another angle—from the point of view of cost-effectiveness. Those words come very easily from the party opposite when anything in the social field or even economic or environmental matters are under discussion. Is the expenditure of this money—taxpayers' money—cost-effective? To that of course we cannot get any reply from the Government because they have not even studied the matter. They do not even know whether it is cost-effective or not. They do not even pay attention in detail to the reports that come from the Court of Auditors year by year. They spend about half an hour looking at them; that is all. If they do not know what the cost-effectiveness is, I can tell your Lordships that the people of the United Kingdom know what the cost is to them.
During the Recess a report was produced by the National Consumer Council. It was conveniently done in the Recess when Parliament was not sitting and it largely passed its notice, but happily not that 760 of the press at large. With an amazing degree of agreement the press of this country from the Right—to wit, the Sun newspaper—to the Guardian, the Independent, The Times they all denounced the common agricultural policy by virtue of which every household in the United Kingdom pays between £11 and £12 a week extra in food costs.
§ Lord Harris of Greenwich
My Lords, may I ask the noble Lord a question? I am following his remarks with close attention and I wonder why, if our membership of the Community is quite as damaging as he suggests, the Labour Party has decided to abandon its policy of withdrawing from the Community.
Lord Bruce of Donington
My Lords, I am grateful to the noble Lord. I have not sought in any way to damage the European Community. I am asking the Government to answer perfectly simple questions. I have made no denunciation of the EC. Indeed, so far as concerns certain of the expenditure in which the United Kingdom is involved, I applaud it, as I do, for example, the EC expenditure on research to which we contribute, and in particular the fusion project called JET at Culham, about which incidentally the Government now have cold feet and have abandoned their enthusiasm.
To return to where I was before the noble Lord intervened, between £10 and £12 a week extra for a family of four is being paid as a result of the common agricultural policy. That is the people's answer, and certainly the answer of the press to this proposition. It may well be said that under the new agreement—which they did not want to put in as a schedule to the Bill—the common agricultural policy will gradually whittle away. Not a bit of it.
If the noble Lord looks at his own explanatory memorandum of the 1988 and 1989 budget he will find that expenditure there on the EAGGF is still running at over £19 million in 1988. There is no real change. It is indeed implicit in the figures that the Chancellor set out in his Autumn Statement that the common agricultural policy will continue.
The noble Lord may say that Her Majesty's Government are quite determined that the common agricultural policy shall be kept under rigid control. They said so at the time of Fontainebleau. It has not happened. But let us say that the Government—and there have been certain restive opinions in the higher quarters of government about the EC over the past fortnight or so—decided that they wanted to modify the EC common agricultural policy. Under the Treaty they could not do so. The Council of Ministers cannot originate proposals. Proposals can only be originated by the Commission. If the Commission does not make a proposal for the reform of the agricultural policy the Council cannot even consider it.
The only powers that the Council has under the Treaty—and they appear in Article 145—are in fact by unanimous agreement to amend the Treaty itself. Does anybody think for one moment that the Commission, as at present constituted, based upon the Continent and fundamentally part of Brussels, will produce a proposal to the Council for the reform 761 of the common agricultural policy? I had the honour to represent this House there from 1975 to 1979. The reform of the common agricultural policy has been a cry by every political party in the European Parliament, and still is. What chances are there of reform?
Under the Bill the Government have regrettably boxed themselves in. They have committed us to billions of pounds of expenditure out of taxpayers' money, and they themselves are powerless to avoid the consequences of the agricultural policy both in terms of prices to the consumer and in terms of the tax that the ordinary British taxpayer—and not only payers of income tax but indirect taxation as well—is called upon to bear.
In the normal way if this were not a Money Bill and I still have my reservations about that—we should not have the slightest hesitation in advising the House to send it back to another place. I am afraid that we cannot do that, but on behalf of my colleagues on these Benches I enter a protest at a Bill of this kind being initiated by any British Government that have the interests of the whole nation at heart.
§ 4.57 p.m.
§ Lord Bonham-Carter
My Lords, I am pleased to have the opportunity to follow the noble Lord who has just spoken to us for some time. I learned an interesting fact from his speech. In the light of his response to the intervention of my noble friend, I gather that we must regard that speech as in favour of the EC. I gather that we must take that speech as being a testament of faith by the Labour Party in the European Community. I also learned that government money was taxpayers' money. It would be serious if government money was something else.
I shall come to the CAP a little later in the few remarks that I propose to make, but I should remind the noble Lord, Lord Bruce of Donington, that the deficiencies of the CAP, about which we whinge so much in this country, are largely due to the fact that when the common agricultural policy was developed we were not there. If you do not join a club at the beginning you will find that other people will make rules in your absence.
However, the real gravamen of the noble Lord's speech was a question and not an answer. The question was: what value do you get out of the EC? My view of that should emerge in the course of my remarks, but what was noticeable in the noble Lord's speech was that he did not indicate any alternative to the EC that would give us better value. There was not the glimmer of a constructive proposal in any single sentence that he uttered.
I am surprised that a member of the Labour Party should not see some value in the structural fund devoted to the poorer regions of Europe. It is surely something from which we in this country can benefit, and from which the other poorer regions of the Community can benefit.
§ Lord Molloy
My Lords, would the noble Lord give way? Why does the noble Lord think that it is 762 amazing to want to get rid of this crass burden of the common agricultural policy? This is agreed by all people from the City down to the smallest businessman. Why must we not dare to criticise it or want to get rid of it until we have some alternative? It is like advising someone who has cancer to make sure that they get some other terrible illness before the cancer is treated.
§ Lord Bonham-Carter
My Lords, I do not regard the European Community to be like cancer! I do not object to the noble Lord saying that he would like to reform the common agricultural policy. What I object to is the tenor of totally negative criticism of the EC and all its works.
I and my colleagues on these Benches welcome the Bill as a further step in the integration of Europe. We welcome it for the following reasons. It increases the resources at the disposal of the EC—I am sure that in this respect I have the support of noble Lords on the Labour Benches; it sets an absolute limit on agricultural expenditure in 1988; it arranges that the sums agreed by the 1GA are fixed as a proportion of GNP, which we have advocated for many years; and it doubles the funds available for the structural fund. All that involves some sacrifice of sovereignty. I do not think that one can have one without the other. They are all steps in the right direction and each step is one that we support.
What is more difficult to follow, and what I should like to know, is why there has been such a fuss about these matters; and why a package presented in Copenhagen at the end of last year and rejected out of hand by the Prime Minister was accepted about three months later in much the same form in Brussels. What lies at the back of the Prime Minister's tactics and her attitude to the single European market? It appears to be a continuing reluctance—one which the noble Lord, Lord Bruce of Donington, would share—to accept the nature of the European Community and the way in which it will develop. It is that which lies behind the Bruges speech and the views that she expressed to the Italian Prime Minister when she met him in Italy.
Indeed, when I read through the Bruges speech it reminded me very strongly of a speech made almost 30 years ago by Reginald Maudling on the breakdown of the free trade area negotiations. His response to the suggestion, made from the Liberal Benches at the time, that we should join the European Community used almost precisely the same arguments as those deployed by the Prime Minister. There was only one that she did not use that he used—the Commonwealth which was then a very controversial matter.
Mr. Maudling said in that speech that if we joined the EC it would mean interference with our economic and social policies and involve a loss of sovereignty. He said that to sign the Treaty of Rome would be to accept as the ultimate goal political federation in Europe, including ourselves. Indeed, the Bruges speech was a marvellous free trade area oration. But, as Mr. Maudling 30 years ago recognised, the European Community is not simply a free trade area. Since than we have signed the Treaty of Rome. It is 763 central to the Treaty of Rome that it demands a sacrifice of sovereignty. It made this demand—this is perhaps one of the things that we have got out of the European Community that we must bear in mind—because the European Community was never simply a free trade area; it was inspired by political purposes. The chief political purpose that inspired it was to prevent the outbreak of another European civil war. The chief political objective was to amalgamate the countries of Western Europe in a unity that could never be un-scrambled. The technique was to do this by what Mr. Monnet termed "functional means". That is one of the advantages that we can say we have got out of it.
It also recognised that in the 20th century a middle sized nation state can protect neither itself nor its interests by itself. For example, this country needs, requires and has been provided with a much larger trading area within the EC. When one considers nuclear power, pollution of the environment or satellite television one finds in every case that the opportunities that those technologies offer and the dangers that they present cannot be effectively dealt with within the framework of a middle sized nation state. This means that if one is to deal with these things, take these opportunities and avoid these dangers one has to accept an abrogation of sovereignty.
Refusal to recognise this has already led recently to a refusal to join the EMS and to the dismissal of the idea of a central bank, a common currency and so on.
Lord Bruce of Donington
My Lords, is the noble Lord aware that the United Kingdom was a founder member of the EMS? It merely has not joined the ERM part of it.
§ Lord Bonham-Carter
My Lords, that was the germane point!
I regard the consequence of those failures as likely to be serious. Most people who think that we should have joined the European Community are of the view that we should have done better if we had joined it earlier and had been in the Messina conversations; they think that we should have done better if we had tried to join the European Coal and Steel Community and Euratom had applied to join the EC in 1958–59.
It is commonly said that we missed the bus. The fact of the matter is that "missing the bus" is not merely a phrase; it actually means that the people who catch the bus get there before you. If you catch a later bus, you will find that they have arranged the picnic and you will have no control over what you eat. I hope that we will not repeat that mistake. I repeat, one of the consequences of missing the bus in the early days was that the common agricultural policy was formed in our absence. Had we been there it would have taken a very different shape and complexion. We cannot afford to do that again in my view. If we refuse to associate ourselves with the EMS, the formation of a central bank and a common currency, we shall find that the others go ahead leaving us outside.
764 Sir Geoffrey Howe, talking on this Bill in another place, spoke of a free market in financial services. He said:It will be a major boon to the City of London". [Official Report, Commons, 11/7188; col. 44.]If we refuse to participate in setting up a central bank I imagine that it will go to Frankfurt, and the City of London as the third centre of finance in the world will be in jeopardy.
Noble Lords must recognise that we are living in a tri-polar world. We cannot get out of that. Whether one considers defence and foreign policy or commerce and economics, we are in a tri-polar world. In defence it is the United States, the USSR and Europe; in finance and economics it is the United States, Japan and Europe. British influence can best be exercised and British interests best preserved in our view by working within the European Community rather than behaving like a grumbling fringe member.
One area that has not been mentioned I am surprised that the noble Lord, Lord Bruce of Donington, did not raise it—in which British influence should be exercised in the Commission's affairs is in connection with Commission bureaucracy, so often attacked not so much because of its size, but there seems to be an absence of democratic control over the Commission. The only way that can be dealt with is by a serious attempt to reform both the procedures of the Council of Ministers and of the European Parliament. Does the noble Lord wish to intervene?
§ Lord Bonham-Carter
The noble Lord was looking interested, my Lords.
Lord Bruce of Donington
My Lords, I am most grateful to the noble Lord for having given way, merely on the basis of an expression on my face. That is extremely charming of him. Would he consider that any amendments to the powers of the Commission require an amendment to the Treaty of Rome? That requires unanimous consent of all the members of the Community. Does the noble Lord envisage that the Commission will bring forward proposals to the Council for limiting its own powers?
§ Lord Bonham-Carter
My Lords, I was envisaging that the Single European Act would be followed by further extensions in the powers of the European Parliament. I see no reason whatsoever why that should not occur. I was also envisaging that the activities of the Council of Ministers should be public and not private. That seems to me an essential element in the democratisation of the EC. But the present proposals which M. Delors has floated seem to me to be entirely in accordance with the original purposes of M. Monnet, that is of creating a community and not a federation (as is sometimes said) by functional means. That is to say it would be achieved by developing economic and financial cooperation which in turn will then be matched by political development.
765 It is my view that the Bill is a step in that direction. I hope that it will be followed by other legislation along the lines which I have suggested so that the political developments which are essential should be allowed to go forward with the support and not the hindrance of this country.
§ 5.12 p.m.
§ Lord Jay
My Lords, the Minister naturally put the best face he could on the package which is now before us. I should like briefly to consider some of its longer term implications. What the Bill does is to increase by 25 per cent. the level of taxation which the EC imposes on its own people—a lasting increase, according to the Explanatory Memorandum—of from £200 million to £300 million in the contribution from the UK taxpayer and a special levy, according to the Bill, of £765 million, although I think the Minister said £600 million this year from the United Kingdom, disguised, as my noble friend said, as a non-repayable advance authorised by the subterfuge of an intergovernment agreement outside the machinery of the EC.
I can congratulate the Government on one matter and that is that at least this time they have embodied the latter in a Bill and have not tried, as they did earlier, to slip it through by an order pretending that it constitutes a treaty. We have heard much about creative accountancy this afternoon; but I think that was an example of creative legislation. However, that has been improved.
The Government's surrender last February to this further huge increase in EC budget expenditure represents, I fear, the end of the last hope that the common agricultural policy—despite the minor easements which have been made—would ever be basically reformed or its main economic damages curtailed. After all, 72 per cent. of this huge spending is still swallowed up by the CAP. The CAP alone costs an astonishing £18 billion a year. The noble Lord, Lord Bonham-Carter, went into some past history and I recall that once we were told that at the time of the 1975 referendum, that spending on the CAP would be limited to the level of 1 per cent. of VAT revenue. Then we were assured in the next stage that the absolute limit would be 1.4 per cent. of VAT revenue. In fact the only real hope of ever putting an effective ceiling on EC extravagance was to have stuck to that 1.4 per cent. limit.
But the Prime Minister's capitulation last February—I know it was in the middle of the night and I do not believe that that is an adequate excuse—has destroyed that hope and we are now faced with this huge increase in the annual payment made by the UK taxpayer to Brussels.
The CAP as practised by the professed free traders in Brussels, who talk a great deal about competition, is the most extremely damaging form of protectionism yet known. Not merely are the food supplies imported into this country for the UK consumer heavily, indeed penally, taxed, but many essential food imports from outside the EC are directly prohibited, which hitherto was an almost unknown form of protectionism. As a result we are 766 all now paying far more than the world price for our food. The Commission is so ashamed of the gap between EC and world food prices that it has now ceased to publish the exact statistics. But the figures it produced earlier showed that EC food prices are usually and in most cases at least double world food prices.
In recent years, with a few gaps up and down as the dollar rose or fell, EC cereal and meat prices have on average been 100 per cent. above world prices. Dairy products have been 300 per cent. higher. If the Minister has the up-to-date figures I shall be delighted to hear them. We now have the authoritative estimate not merely of the National Consumer Council, but also of our own British Treasury in a document, rather oddly called the Treasury Economic Progress Report, which tells us that every UK consumer is now paying about £3 a week more for food and a family £10 or £12 a week more than they would have paid outside the EC.
This heavy burden, which is a tax though a hidden one, on our economy takes the form partly of a loss in real living standards—particularly of those worst off who are most affected by food prices—and partly of a rise in pay rates and so in the labour costs of all UK producers. Higher food prices of' course mean higher pay rates.
The study quoted in this Treasury document also estimates that about half a million of the rise in UK unemployment since 1970 is due to this rise in our production costs. That is the study's estimate and not mine. That rise is also one major cause of the extraordinary swing into deficit of our trade with the EC which in the case of manufactured goods has reached a level of £12 billion or £15 billion a year and is, incidentally, the whole cause of our present overall balance of payments deficit. With the non-EC world we have a large trade surplus.
As one would expect from these food price figures there was a sharp drop in consumption per head of the main foodstuffs by the British consumer in the first ten years after the introduction of the CAP. These figures come from the National Food Survey. That amounted to a drop of between 10 per cent. to 30 per cent., in the consumption of many foods such as milk, meat, butter, eggs and some others, and a fall in living standards.
It is often said that there are surpluses of those food commodities. But there are not surpluses at all in the sense of producing more of the food which is needed or wanted by the public. The trouble is that the prices are much too high for the consumer to pay. If CAP prices were allowed to fall to world prices, the surplus would soon disappear. Indeed, one can produce surpluses of anything by charging two or three times the market price. One would then be recommended to stop producing the goods in order to avoid the surpluses.
Before the United Kingdom joined the EC we paid farmers a moderate deficiency payment to keep food prices down. The noble Lord, Lord Bonham-Carter, did not refer to that item of past history. Now, as a result of the increases, the United Kingdom taxpayer will be paying approximately £1 billion per year in order to keep prices up, so damaging our industrial 767 costs and indirectly our balance of payments. How better the extra sums whether £200 million, £300 million or £765 million—might have been spent on other things, as my noble friend suggested, such as child benefit, housing, education or whatever.
We cannot oppose the Bill and now that we have accepted an even heavier load on our future balance of payments we must fear and expect that the burden will be permanent and will grow heavier year by year as the EC's huge spending on the CAP continues to increase. Although there is said to be a limit, it is one which increases all the time.
The load on our balance of payments is threefold. There is the excess price of food imports over and above what they would otherwise be, the higher cost of producing our exports and the Budget payment across the exchanges. That threefold load is certain to be one main element in the ever-increasing deficit in the balance of payments which this country will almost certainly face in the 1990s as our oil revenues fade away. In my view it will be our main national problem during that decade.
§ 5.23 p.m.
§ Lord Stoddart of Swindon
My Lords, it is difficult not to contrast the relaxed way in which the noble Lord, Lord Brabazon, put forward the Bill today with the spirited opposition to the perpetuation of this House's decision to exempt people from charges for dental and eye examinations. It is difficult to reconcile the Government's attitude. At one fell swoop, and without much opposition, the Bill proposes to increase the amount of money available to the EC by £775 million beyond the enormous amount they already spend. That is five times as much as the cost of continuing with free dental and eye examinations for the population as a whole and 30 times as much as the cost of granting that benefit to pensioners. The Government voted against that proposal in the same way as they voted against the general proposition.
The noble Lord, Lord Bonham-Carter, believes that it is a good deal. It is clear that my noble friend Lord Bruce does not believe that it is a good deal; the House will he aware that I do not believe that it is a good deal. We are not the only ones to think so, because The Times published a leading article headed "A bad deal". This is the last time that I shall quote from a publication. The first paragraph of the article stated:It is hard to accept the Prime Minister's assertion that the EEC Deal she struck in Brussels was not a fudge. She came closer to the mark when she said, 'It was not too had'. It is nearer still the truth to call it 'a had deal'.".It is not only the Labour Party which believes that it is a bad deal. It is not only my noble friends who believe that it is a bad deal.The Times, which is not usually friendly towards the Labour Party, particularly recently, also believes that it is a bad deal. Of course it is a bad deal like so many of the others which have been struck by this and previous governments. It imposes on the British taxpayer depredations over and above those which have already been imposed.
768 My noble friend gave the figure for this year. After rebate it will be £1,690 million. He was right to ask what benefits we receive from that payment. It will be an ongoing payment; the figures will continue each year. The total amount of expenditure which has been taken outside the purview of Parliament is much more than that; it is more than £5,000 million per year. That is the extent to which Parliament is losing control of much of the expenditure.
The Government believe and say that they want value for money and that they wish to target resources. Are we receiving value for money from the EC? Anyone who studies the matter and who thinks about it knows perfectly well that we are not receiving value for money. Is it the right targeting of expenditure to subsidise those countries in Europe which do not need it? For years we have been making a net contribution to the French. That is hardly targeting, bearing in mind that their gross national product is higher than ours.
The noble Lord, Lord Bonham-Carter, accused us of whingeing about the CAP. Until now I had believed that we were all against the CAP. I have heard Members from all sides of the House and in another place condemning the CAP out of hand. It is an absurd method of dealing with an agricultural policy. Apparently the noble Lord, Lord Bonham-Carter, has been converted in its favour and we shall take note of that.
§ Lord Bonham-Carter
My Lords, if the noble Lord reads Hansard he will not find that I am converted to the CAP. I said that the form which it took was largely due to the fact that we were not there at the time.
§ Lord Stoddart of Swindon
My Lords, I am sorry if I misunderstood the noble Lord. I undertood him to say that we were whingeing about the CAP. If one whinges about something one is opposed to it; if one accuses others of whingeing about it, presumably one is for it. However, I accept his explanation.
However, the fact is that we receive nothing from the CAP. My noble friends Lord Bruce and Lord Jay have already told the House that housewives are paying an additional £13.50 per week in food costs because we are members of the EC. We have also been told that we are running an overseas trade deficit in manufactured goods of anything between £11 billion and £13 billion per year. In fact the total deficit since we joined the Common Market is running at £50,000 million. If we did not have North Sea oil we should now not only be bankrupt through being a member of the EC but we should be living at a standard equivalent to a third world country. That is the extent of the "benefits" that we are receiving from the EC.
We were told that we must join this great trading bloc because it would help us. However, if you are running a deficit of £13,000 million per year and you are going to do that every year, that is the road to ruin and not to riches, believe me. However, we were also told—and we heard some of the arguments again this afternoon from the noble Lord, Lord BonhamCarter—that when we joined we would receive these 769 great benefits of additional wages, additional employment and so on which have not come to fruition.
However, even I, who have been opposed to our membership of the Common Market since it was promoted or projected, believed that the farming community would thrive under it. Is it thriving? Of course not. Farmers are now going out of business every week. Those who are not going out of business are being told that they must no longer farm and must take their land out of production; they are being paid for that out of the money which we are voting this afternoon.
Therefore, let us see where the benefit is. We have asked for a balance sheet to be produced of the benefits that we receive from the Common Market and the detriments. Nobody has yet been able to produce the benefits; I can produce the detriments. I have been doing that today. However, nobody has ever been able to say what are the benefits except in abstruse terms which ordinary people do not understand.
The Prime Minister has made a number of interesting speeches lately. Indeed, she has realised and recognised, perhaps not in time, where we are going. She is beginning to understand that M. Jacques Delors is not a joke and that this latter-day Napoleon is serious about his intentions to ensure that 80 per cent. of decisions, not only fiscal but also economical and social, are being taken in Europe. Let us make no mistake about that. If that comes about—and the noble Lord, Lord Bonham-Carter, wants that to come about as he showed in his speech—this Parliament, this House but more seriously another place, will lose 80 per cent. of its sovereignty. Is that what your Lordships wish? I think not.
I must praise the Prime Minister for having the guts—because it needed guts—to make the statement which she did at Bruges, because she knew that to some degree she had to go back on previous statements which she had made in support for the single European Act which was forced though this Parliament. It took a lot of courage to do that. That is why I believe she should be given a fair hearing, and, where necessary to ensure the continued sovereignty of the Queen in this Parliament, she should be given support.
There are forces afoot. A Member of this House, namely the noble Lord, Lord Cockfield, believes that M. Delors is right. We shall have to see exactly who wins in the long term. I hope that we shall have more debates about the Common Market. I wish that we had the same sort of system as the other place, because they have a six-monthly progress report on developments in the EC. The more we understand the Community, the more wary we shall be of what we do within it.
As I said at the outset, I believe that this is a bad Bill. It contributes to bad Bills and bad measures which we have had in the past. In conclusion, I hope that the noble Lord will be able to reply to this question. It has been said that the arrangements made at Fontainebleau for our rebate will end in 770 1992. If that is so and new rebate arrangements cannot be agreed, the amount of money which we shall be paying over will he quite astronomical. I hope that the Minister will be able to assure me and assure the House that the Fontainebleau agreements will not be overturned and that our rebates will continue, because to some degree that will mitigate and minimise the amount of money we pay over to an avaricious EC and the Commission which controls it.
§ 5.35 p.m.
§ Lord Brabazon of Tara
My Lords, there is no doubt that we have had an interesting debate this afternoon. That comes as no surprise to me having taken part in last year's debate on the financing of the Community. Noble Lords have referred to a number of aspects of this Bill, some of which I also touched upon in my opening remarks. However. I should like to try to answer some of the points raised this afternoon.
Perhaps I could first deal with the question of the noble Lord, Lord Bruce of Donington, as to why this is a money Bill. The Parliament Act defines a money Bill as a public Bill which in the opinion of the Speaker contains only provisions dealing with all or any of a number of financial matters including taxation and the imposition of charges on the Consolidated Fund. As the explanatory and financial memorandum to this Bill makes clear, it allows payments to be charged directly on the Consolidated Fund and therefore falls clearly within the definition of a money Bill.
Some noble Lords asked, most notably the noble Lord, Lord Bruce of Donington, whether or not the budget is now on a sound financial footing or why the new spending controls should be any more effective than those agreed after Fontainebleau in 1984. Those are fair questions although I suspect that some noble Lords may have intended them to be rhetorical ones. There are a number of good reasons why the new arrangements are an improvement on their predecessors. Many of the concerns expressed have understandably focused on agricultural spending. The noble Lords, Lord Jay and Lord Bruce, referred to the high cost of food prices under the CAP. It was precisely because of the problems associated with the CAP that in the recent negotiations the Government successfully pressed for control of CAP spending and a reduction of surpluses.
First, there is the guideline limit on agricultural expenditure. Yes, there was a guideline before, but previously it was set out in informal Council conclusions. Now it is embodied in a legally-binding Council decision and it will in future grow at 74 per cent. of the rate of growth of Community GNP, compared to a rate of growth equal to the rate of growth of available own resources under the old system. Moreover, the 1984 arrangements allowed the guideline limit to be exceeded in the event of exceptional circumstances. The monetary reserve which replaces this provision is more limited and specific in its scope.
So much for setting the guideline limits. But how can we ensure that the guideline limit is adhered to? The Council's decision on budget discipline provides 771 not only that the Commission's price proposals should be consistent with the guideline but also that spending will be managed on a sector by sector basis to ensure that the limit will not be breached. Moreover, automatic stabiliser mechanisms have been built into the regulations on each of the main commodity regimes. These are generally designed to trigger price cuts whenever production exceeds maximum agreed quantities. These arrangements are now in force and have helped to ensure that spending on individual commodities has not exceeded budget provision.
A further improvement is in the handling of agricultural stocks. A new regulation has been introduced to provide for systematic depreciation of new stocks bought into intervention and specific sums have been set aside outside the guideline limit to provide for the costs of depreciation and disposal of existing stocks which had not been fully depreciated in the past.
For all these reasons, the Government are confident that the new arrangements will be significantly more effective in controlling agricultural expenditure than those agreed in 1984. In fairness, I should also point out that the economic conjuncture now is quite different from what it was four years ago. Because of higher world prices and lower than expected harvests, spending on agriculture this year is in fact now expected to be some 1 billion ecus below the budget provision for 1988. Indeed, world prices and other factors have also led the Commission to reduce its proposals for agricultural budget provision for next year by over 1.3 billion ecus. So the outlook for respecting the guideline limit on agricultural spending is for a number of reasons more favourable than in recent years.
The noble Lord, Lord Bruce of Donington, suggested that the Commission would never propose a reform of the CAP. However, he appears to have ignored the fact that the fundamental reform of the CAP, including the introduction of legally binding budget disciplines and automatic stabilisers agreed at Brussels in February, were based on Commission proposals. The Commission knew very well that the United Kingdom would not agree to extra resources for the Community if budget discipline was not tightened and the CAP was not reformed. I think that answers the point raised by the noble Lord.
As I mentioned earlier, a number of measures have been agreed which will also help to control other areas of Community spending. The sub-ceilings on own resources will limit the total revenue available and the financial perspectives agreed between the Commission, the Council and the European Parliament will act as ceilings on each main block of spending in the budget. Taken together I believe that these measures represent a significant improvement on the arrangements for controlling expenditure which it proved possible to negotiate in 1984.
A number of noble Lords referred to the speech of my right honourable friend the Prime Minister at Bruges. I am sure she will be pleased to receive support for her speech from the noble Lord, Lord Stoddart of Swindon. The noble Lord, Lord Bonham-Carter, also referred to that speech. I agreed 772 with most of what he said, particularly the fact that we should have joined the Common Market earlier. However, that is past history and I was only in short trousers in 1959.
The noble Lord suggested that my right honourable friend's speech threw into question the whole basis of the February European Council Agreement—or at any rate the Government's attitude to that agreement. I cannot accept that argument because it is not borne out by what my right honourable friend actually said. Perhaps I may quote a few of her remarks. She said:If we cannot reform those Community policies which are patently wrong or ineffective … then we shall not get the public support for the Community's future development, and that is why the achievements of the European Council in Brussels last February are so important.It was not right that half the total Community budget was being spent on storing and disposing of surplus food. Now, those stocks are being sharply reduced.It was absolutely right to decide that agriculture's share of the budget should be cut in order to free resources for other policies such as helping the less well-off regions and helping training for jobs".Those are points which I should have thought would find acceptance with noble Lords opposite. My right honourable friend continued:It was right, too, to introduce tighter budgetary discipline … to bring the Community spending under better control".Thus, far from there being any inconsistency between what my right honourable friend said in Bruges and the European Council package, she went out of her way at Bruges to commend the main elements of that package. I trust that noble Lords who share the views set out in that speech will accordingly support this Bill which endorses the European Council agreement.
Noble Lords opposite have complained about the cost to the United Kingdom of being a member of this club. if I may say so, the noble Lord, Lord Bonham-Carter, answered those arguments particularly well. A number of noble Lords made a comparison with the figure for next year which the noble Lord, Lord Bruce of Donington, revealed to us as £1,970 million as if that were something new. It is not. It was published in the Autumn Statement.
Perhaps I should make one comparison. The noble Lord compared it with the costs of dental inspections, or whatever. I point out that the same Autumn Statement announced that we are to spend an extra £2 billion on the National Health Service next year—not a total of £2 billion, but an extra £2 billion, which is even more than the cost of the Common Market to us.
The noble Lords, Lord Bruce of Donington, Lord Stoddart of Swindon and Lord Jay, referred to the trade deficit. It is true that we have a trade deficit with the rest of the Community. However, that is a challenge we are facing. We are committed to maximising the potential of the EC market of 320 million people through completion of the Single Market in 1992.
§ Lord Stoddart of Swindon
My Lords, I thank the noble Lord for giving way. Of course I understand that we should face up to this challenge. However, is the Minister aware that we have been facing up to it 773 since 1973? During that period a surplus in 1973 has been converted increasingly, virtually year by year, into this enormous deficit. In other words, the deficit has been increasing every year and not reducing as one would have expected.
§ Lord Brabazon of Tara
My Lords, as I said, we are committed to maximising the potential in 1992 through the completion of the single Market.
I should point out that our exports of manufactures to the EC last year showed a growth of 18 per cent. compared with an import growth of only 13 per cent., so we are moving in the right direction. We have a deficit with the EC because it is a major source of manufactured goods and most non-EC countries have traditionally been producers of raw materials. Almost half our exports of manufactures go to the Community and it would be hard to replace even part of that market.
The noble Lord, Lord Bruce of Donington, asserted—unfairly, I would say that we spend only half an hour or so on the Court of Auditors report. In fact it was at this Government's instigation that the report is now discussed each year in the Economic and Finance Council. The report is also the subject of an annual debate in another place. That reflects the fact that the Government take cost-effectiveness extremely seriously.
The noble Lord, Lord Bruce of Donington, also queried the definition of a non-repayable advance. The fact that our contribution to the IGA has been called an advance does not mean that it is a loan in the normal sense of the word. It is simply a payment which temporarily takes the place of the contributions which we would otherwise have made had our new own resources decision entered into force.
§ Lord Jay
My Lords, in that case, why could it not just be called a payment and not a non-repayable advance?
§ Lord Brabazon of Tara
My Lords, perhaps the noble Lord makes a good point. At the end of the day it obviously appears to amount to the same thing. There is another point of detail raised by the noble Lord, Lord Bruce. He asked why the own resources decision in the IGA could not be printed as a schedule to the Bill. I do not believe that there is any need for it to be so because both have been published as Command Papers; they are freely available to anyone who wishes to see them. Perhaps I should not say "freely available" but they are available.
§ Lord Brabazon of Tara
My Lords, if the noble Lord queries it, the decision on own resources is priced at £1.60 net and the undertaking at a modest 50 pence. Of course the noble Lord would not have to pay that if he wanted a copy.
I turn to the remarks of the noble Lord, Lord Bonham-Carter. As regards our membership of the exchange rate mechanism of the EMS and his 774 comments on the possibility of a European central bank, the Government remain fully committed to playing a full part in Europe. We are ready to join the exchange rate mechanism when the time is right. As regards the question of the European central bank, the Prime Minister explained the position at Bruges. The key issue is not whether there should be a European central bank. The immediate and practical requirements are to implement the Community's commitment to free movement of capital; to establish a genuinely free market in financial services—in banking, insurance and investment; and to make greater use of the ecu.
Finally, the noble Lord, Lord Stoddart of Swindon, asked me whether the Fontainebleau abatement refund would end in 1992. It is not time-limited and it cannot be changed except by unanimous agreement with member states. The noble Lord quoted from The Times saying that we had got a bad deal in February. Perhaps I may quote from two other French newspapers. First, Liberation said:The British Prime Minister can boast of having preserved her cheque … and above all of having won the point that she was refused at Fontainebleau: the checking of the inflationary spiral of agricultural subsidies.Le Figaro said:It is likely that in the plane on the way back to London the British delegation was exchanging knowing smiles and satisfied handshakes.Those newspapers in that country knew that we had got a good deal.
I trust that I have answered the questions raised by noble Lords. In conclusion, I wish to summarise one or two of the points I made earlier. The Bill explicitly seeks Parliament's approval, first, for a new own resources decision that among other things preserves our Fontainbleau abatement which, as I have said, has been worth some £4½ billion over the past four years. Secondly, the payments under an IGA have put this year's Community budget onto a sound financial footing. Moreover, the Bill implicitly seeks endorsement of the package of measures agreed at the February European Council including the new legally-binding measures to keep within spending limits. That package needs to be seen as a whole. In the Government's view the package is good both for the United Kingdom and for the Community as a whole. I trust that your Lordships will share that view and that your Lordships will accordingly grant this Bill a second reading.
§ On Question, Bill read a second time; Committee negatived.
§ Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 7th November), Bill read a third time, and passed.