HL Deb 30 October 1990 vol 522 cc1804-17

4.17 p.m.

Lord Belstead

My Lords, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the European Council in Rome on 27th and 28th October. The Statement is as follows:

"With permission, Mr. Speaker, I shall make a statement on the European Council held in Rome on 27th and 28th October, which I attended with my right honourable friend the Foreign and Commonwealth Secretary. The conclusions of the Council have been placed in the Library of the House.

"The Council had to deal in the first place with some urgent items of current business: the Community's failure to agree a negotiating position on agriculture for the Uruguay Round of trade negotiations; the situation in the Gulf, and the position of the foreign nationals held hostage in Iraq and Kuwait; and the problems which have arisen in Hungary.

"Looking further ahead, the Council also dealt with the preparations for the two intergovernmental conferences, on economic and monetary union and also on institutional reform, which are due to begin in December.

"I shall report on the Council's business in that order. The Uruguay Round of trade negotiations is due to be completed before the end of this year. The outcome will decide whether world trade becomes steadily more open, or we repeat the mistakes of the past and relapse into protectionism.

"The most difficult item is agriculture. All the major participants in the Uruguay Round committed themselves to table negotiating offers by 15th October. All except the European Community have done so.

"The Community has been discussing this problem since the round began in the autumn of 1986. It gave an unequivocal commitment in April last year to make substantial and progressive reductions in agricultural support. That commitment was repeated at the Houston economic summit in July this year.

"The Commission has put forward a proposal for 30 per cent. reductions, back-dated to 1986. So what has already been done by way of reduction of support since then will be set against that 30 per cent.

"There have been six sessions of European Community ministers to discuss the proposal. The most recent. lasting some 16 hours, was on Friday last week, but no agreement has been reached. The main opposition has come from France and Germany.

"The Community's failure has harmed its reputation. Negotiations between the leading groups of countries cannot start until the Community's proposals have been tabled. The European Council requested ministers to meet again and put the Commission in a position to table a negotiating offer. The Netherlands Prime Minister suggested that the basis for this should be the position reached when agriculture ministers suspended their work early on 27th October. But President Mitterrand made clear that France would continue to vote against those proposals.

"It remains for agriculture and trade ministers to try yet again to reach a conclusion. If we fail, it will give a signal to the world that the Community is protectionist.

"Next, the Gulf and the position of the hostages. The European Council agreed a firm statement calling for Iraq's withdrawal from Kuwait and confirming Europe's absolute commitment to full implementation of the United Nations Security Council resolutions. It makes clear that we shall consider further steps if Iraq does not comply. The message is that Saddam Hussein must not gain anything from his aggression.

"The Council strongly condemned Iraq for holding foreign nationals as hostages and for using them in an unscrupulous way. This is totally unacceptable. Moreover Iraq is negotiating over the hostages with the purpose of trying to divide the international community. After considerable discussion, the Council affirmed our determination not to send representatives of our governments in any capacity to negotiate with Iraq for the release of hostages and to discourage others from doing so. I believe that the unity of the Twelve, and our determination not to allow Saddam Hussein to divide us on the question of hostages, will send a very powerful signal to Iraq.

"Thirdly, assistance to Hungary. In the course of the Council, member states received appeals from the Government of Hungary for help in dealing with the serious problems which have arisen as a result of the reduction in the supply of oil from the Soviet Union. The consequent price rises have given rise to unrest. The Council issued a strong statement of support for Hungary in pursuing its path towards democratic and economic reforms and the rule of law.

"The Council also agreed, at the United Kingdom's suggestion, to bring forward and disburse rapidly the second instalment of the 1 billion dollars Community loan for Hungary which we agreed last year. This will be of direct, practical assistance.

"Those were the urgent matters on which the Council had to act. Looking further to the future, we also discussed the preparations for the two intergovernmental conferences—the IGCs—which will start their work on 14th December.

"For the conference on political union, the Council had before it a report by foreign ministers listing a wide range of possible institutional changes which the intergovernmental conference might consider. Heads of government called for further work to be done on these proposals between now and December.

"My right honourable friend the Foreign Secretary and I argued that it would be wrong to prejudge the conclusions of the intergovernmental conference. We were on strong ground since the Community's original decision to call the conference specified that it should set its own agenda. Nevertheless others wished to give specific directions to the IGC. We therefore reserved the United Kingdom's position on, for example, extension of the Community's powers into new areas; greater powers for the European Parliament in the legislative sphere; defining European citizenship; and a common foreign and security policy. All these are issues for discussion at the intergovernmental conference itself rather than to be settled in advance.

"On economic and monetary union, I stressed that we would be ready to move beyond the present position to the creation of a European monetary fund and a common Community currency which we have called a hard ecu. But we would not be prepared to agree to set a date for starting the next stage of economic and monetary union before there is any agreement on what that stage should comprise. I again emphasised that we would not be prepared to have a single currency imposed upon us, nor to surrender the use of the pound sterling as our currency.

"The hard ecu would be a parallel currency not a single currency. If as time went by people and governments chose to use it widely, it could evolve towards a single currency. But our national currency would remain unless a decision to abolish it were freely taken by future generations of Parliament and people. But a single currency is not the policy of this Government.

"I would like to offer four comments in conclusion. First, the Community finds it more difficult to take the urgent detailed decisions than to discuss longer term concepts. Moreover, no one should underestimate the extent to which national interests prevail among those who most proclaim their Community credentials.

"Secondly, Britain intends to be part of the further political, economic and monetary development of the European Community. That is what the great majority of member states want too. When we come to negotiate on particular points, rather than concepts or generalities, I believe that solutions will be found which will enable the Community to go forward as Twelve. That will be our objective.

"Thirdly, we are fighting in Europe for British farmers, for British consumers, for a new world trade agreement, for help to the newly democratic countries of Eastern Europe and for the interests and concerns of our people.

"Fourthly, while we fully accept our commitments under the treaties and wish to co-operate more closely with other countries in the European Community, we are determined to retain our fundamental ability to govern ourselves through Parliament. I believe that is the wish of this House and we on this side will do our best to see that it is fulfilled.

That concludes my right honourable friend's Statement.

4.27 p.m.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord for repeating that wide-ranging Statement. It leads us to certain conclusions, one of which is that at this moment Community affairs are, to say the least, unsatisfactory, certainly from a British viewpoint. The Rome Summit has left us isolated once again. That must be a cause for acute concern.

On the question of who is to blame, there are strong arguments on both sides and the Statement naturally defends the Government's case. I believe that the Prime Minister's reactions were aggressive; that is not always helpful. I do not, however, propose to denounce all the Government's reactions for the simple reason that there are some developments in the Community itself which must cause concern. We need to think carefully before we come to final judgments.

All parties in this House are committed to Britain playing a more central role in the new Europe. We do not wish to be marginalised in future developments there. The Statement refers to agriculture as the most difficult item. The breakdown of talks on farm prices in Brussels was serious and not the Government's fault. The failure to reach agreement was due to political factors in France and Germany and the two governments' inability to stand up to farm lobbies, especially in France.

I believe that the Statement confirms that the Government still believe that a settlement of the agricultural problem is essential before the next GATT round in Uruguay. The GATT talks provide an opportunity to reform the CAP which again is essential, not only in the interests of taxpayers but in the long-term interests of farmers as well.

My first question to the noble Lord the Leader of the House is this. Did the Government request that this issue should be placed on the agenda in Rome? It provided an opportunity to find a settlement which had not proved successful in Brussels. If so, can the noble Lord tell us why the request was turned down? Further, may we assume that the Commission's compromise package which France and Germany rejected in Brussels still stands and that the Government can support it?

Secondly, is it not the case that economic union was to be the first subject for discussion at the Rome Summit in December? As the House will recall, political union was added to the agenda later. Why was economic union made the central subject of last weekend's agenda and when was Her Majesty's Government informed of that? Is it the case that it was tabled at short notice and rushed through without adequate preparation? Given its central importance, that would certainly not be the right way to conduct business, not as we understand it in this country and in this Parliament.

Can the noble Lord say whether economic union will still be on the agenda for the December Summit? If so, will the Government make an effort to find a solution to the many obstacles which exist? In view of the Prime Minister's general attitude, can he say whether subsidiarity is under consideration by the Government? The Statement refers to the importance of Parliament. That is something we can all support, but subsidiarity is related to that and it will be interesting to know whether it is under consideration by the Prime Minister and her Government at this time. It is clear that serious differences of opinion and emphasis exist within the Government at this time. Can the noble Lord give us an assurance that efforts are being made to resolve that apparent disunity? I do not propose to append names to the speeches that we have heard or to the articles that we have read in newspapers and periodicals, but they show that there is a sharp and acute difference of opinion within the Cabinet at present which is not helpful.

We note carefully what the Prime Minister said about the Gulf and specifically about hostages. We agree entirely with what she said. We shall have the opportunity to deal fully with that subject and with the crisis generally when we have our debate on foreign affairs following the Gracious Speech in a fortnight's time.

Finally, is the noble Lord aware that a Committee of this House, under the chairmanship of the noble Lord, Lord Aldington, has been considering the problems of economic and political union over the last few weeks? Does he agree that it would be helpful if we had a debate on that report before the December Summit?

Lord Jenkins of Hillhead

My Lords, I join with the noble Lord, Lord Cledwyn of Penrhos, in thanking the Leader of the House for repeating the Statement. I can at least agree on the importance of the Uruguay Round and the duty of the Community quickly to table a satisfactory negotiating offer, which it has not yet done. Perhaps I may observe in passing that the difficulties associated with the CAP are a 33 year-old monument to the disadvantages for this country of not fully participating in the formative stages of European enterprises.

However, having said that, the Prime Minister's obsessive xenophobia is becoming not only an embarrassing joke but a national liability. It will be within the recollection of the House that within the last couple of years she has been appalled by the impracticality of the Germans and the illogicality of the French, disgusted by the judicial wetness of the Belgians and the Irish, let down by the inconstancy of the Spaniards, the Danes and the Dutch and now claims to have been cheated on the agenda by the Italians. But might there not be room here for examination of the beam in our own eye?

Furthermore, do the Government not recognise that each instalment of Cloud-cuckoo-land is developing a remarkable habit of arriving while we are still denouncing it as totally impractical Utopianism? By the endless repetition of the sad charade of never joining anything until it is too late to influence its shape and then creeping in through the back door, the Prime Minister has not only reduced our influence in Europe to a minimum but has produced an almost unprecedented shambles in the Government. Will the Leader of the House tell us whether the Government's view of sovereignty is that of Sir Geoffrey Howe or of Mrs. Thatcher? Does he accept Sir Leon Brittan's view that Mr. Major's scheme touches sovereignty just as much as the Delors policy? Will he tell us what form of monetary union the Prime Minister agreed to in Madrid, although it must apparently have as little as possible to do with either union or money?

Lord Belstead

My Lords, both noble Lords have asked me whether I will give the Government's view so far as it is represented by the Cabinet. I shall start by doing just that. In a sense, my reply will cover all the points which have just been made by the noble Lord, Lord Jenkins. Before I go any further, perhaps I may thank both noble Lords for their response but say that on some issues the Government clearly do not agree with what the noble Lords, particularly the noble Lord, Lord Jenkins, said.

The attitude of the Government and of the Cabinet to the proposals for economic and monetary union is very clear. The hard ecu proposals would allow early progress in creating a common currency for Europe. There would then be a separate decision as to whether to move to a single currency. All members of the Government agree that that is not something to which we would agree now; nor, indeed, I guess would another place accept it.

Perhaps I may go on from there by saying something which I believe is accurate but which is perhaps a little more ameliorating. In slightly different ways both noble Lords criticised the position of my right honourable friend at the summit. This was a special council which did not take final decisions but mapped out two alternative ways forward. The Council conclusions have been placed in the Library of your Lordships' House and can be referred to.

The two alternative 'ways forward are whether to move to Stage Two on 1st January 1994, which the large majority of the member states represented at Rome felt was what they wanted to do, or whether to follow the evolutionary approach mapped out by the British Government through the hard ecu, involving incidentally—this shows that the British Government are perfectly serious in putting this forward—the setting up of a new institution—a European monetary fund—and a treaty change. If your Lordships will be good enough to look at page 8 of the Council's conclusions, you will see that they are clear; namely, that two alternative ways forward will be further discussed—here I reply to the point raised by the noble Lord, Lord Cledwyn—in the next European Council starting on 14th December. Those matters are very much on the table and there is therefore all to play for.

I am sure that the noble Lord, Lord Cledwyn, will not mind me saying that I conclude that it is not correct to talk about isolation. There is still a great deal of negotiating to be done.

Perhaps I may now more quickly run through one or two answers which I shall try to give to both noble Lords. They put their fingers on the problem and have great experience of these matters, such as the problems that face us on the GATT round because of the hang-up on agriculture.

The noble Lord, Lord Cledwyn, asked whether we requested that that subject should be on the agenda in Rome. He went on to make further remarks which, contrary to what the noble Lord, Lord Jenkins, said, showed that the Leader of the Opposition was worried that some of those matters had appeared on the agenda rather suddenly. The special Council at Rome had been intended to deal with the CSCE, the forthcoming summit and what we can do to try to use the CSCE procedures to improve co-operation and security in Europe. A great many other subjects appeared on the agenda, but they did not include the enormously important subject of where we stand as a Community as regards GATT and what on earth we are to do about the hang-up on agriculture. As your Lordships know, the Statement says that agriculture ministers will now meet again immediately. Let us hope that at long last we can find our way through.

To answer the noble Lord, Lord Cledwyn, economic union will be on the agenda for December. The two approaches will then be discussed.

On the issue of subsidiarity, the Government agree very strongly with what the noble Lord said. It is an enormously important issue. We feel very strongly that it should be reflected in the treaty. It is a criterion which is additional to competence and should not be mixed up with Community competence. That underlines the importance of the concept of subsidiarity.

Finally, to reply to the noble Lord opposite, yes, I am aware than an important report is to be published soon by an ad hoc committee chaired by my noble friend Lord Aldington. Negotiations are in hand for a debate before the next council meeting.

4.40 p.m.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that, contrary to the views expressed by the noble Lord, Lord Jenkins of Hillhead, many people in this country are profoundly thankful that we have a Prime Minister who is prepared to stand up firmly and with determination for the preservation of the sovereignty of this country and the rights and powers of Parliament? Is he also aware that for a thousand years control and management of currency has been a mark of sovereignty and that serious people will hesitate a great deal before deciding to surrender that basic right of a sovereign power?

Is my noble friend further aware that they will hesitate particularly before surrendering it to a body which is apparently incapable of finding a solution to its own agricultural problem? It is perfectly clear that it is French and German ministers' fear of their farmers which is perpetuating the scandalous waste of money and the scandalous damage to international trade and the interests of the third world. Is the Lord Privy Seal aware that most people would think that unless and until the Community shows itself capable of dealing with those matters we should look at proposals for surrendering sovereignty to it with considerable caution?

Lord Belstead

My Lords, I am grateful to my noble friend Lord Boyd-Carpenter for his words of support for the negotiations undertaken by my right honourable friend the Prime Minister. It is a little difficult to talk about the issue in this House, but I must make the point that monetary sovereignty is one of the most fundamental powers of another place. Speaking both for myself and the Government, it has not been my impression from reading the debates in another place that another place would lightly throw that away in the future.

Lord Barnett

My Lords, the noble Lord the Leader of the House said that the summit did not take final decisions. Does he think that it was helpful to the national interest for the Prime Minister to take the attitude that she did, given that she says in the Statement which he has repeated that the national interest will also prevail among other countries and that the only two areas where she expressed disagreement concerned the date and the single currency disagreement and even that was qualified? Does he still believe that the attitude adopted by the Prime Minister was really in the national interest in view of the negotiations that are to take place in the future?

Lord Belstead

My Lords, the noble Lord, Lord Barnett, suggests that a Prime Minister of this country should have agreed, for instance, to extend qualified majority voting within the Council and to delegate implementing powers to the Commission as well as agree a common security policy and other matters of that kind, all without saying that they should be subject to negotiation.

Lord Barnett

My Lords, I did not say that.

Lord Belstead

My Lords, the noble Lord did not refer to those matters; he referred to other matters to which I simply added. All of the points that the noble Lord mentioned and that I have mentioned have one thing in common. My right honourable friend, perfectly reasonably, together with my right honourable friend the Foreign Secretary, said, "Yes, we will discuss those, but we will not tie ourselves down ahead of an intergovernmental conference for which, when the IGC was being planned in Dublin a year ago, it was quite clearly agreed the agenda would be mapped out at the IGC itself."

Lord Ezra

My Lords, does the noble Lord agree that as a country we are committed by treaty to the eventual achievement of economic and monetary union and that the real debate is about how we get there? Does he agree that there are two ways of getting there—by the route which 11 of the 12 members of the Community wish to take or by the evolutionary route proposed by the United Kingdom? Will the noble Lord assure us that the United Kingdom will go into the debates in Brussels in December with a totally open mind on the subject and that we shall put forward our case as strongly as possible, but that if the case for another route is adopted by the majority we shall look at it seriously? If we were to stand out against the majority view after full debate on this very important issue, what would we then do? Have the Government thought about our longer term strategy? Would we leave the rest of Western Europe to go ahead on the basis of a single currency and a central bank while we stood outside? Is that the long-term strategy of the Government in that eventuality?

Lord Belstead

My Lords, the position of the Government is perfectly clear. We believe that the cart is being put before the horse and we would not accept the imposition of a single currency. The very first answer that I gave this afternoon made it quite clear that we are being constructive in putting forward what are called the hard ecu proposals, which would need a change in the treaty and the setting up of a new institution in what would be called the European monetary fund. That would be a parallel or common currency and could move in time to a single currency. However, we find it difficult, indeed impossible, to accept moving straight into what is called Stage Two leading to the imposition of a single currency. We believe that that is impossible and that the cart is being put before the horse because, in talking about the date of 1st January 1994, no one seems to have thought what is to happen under Stage Two.

Lord Rippon of Hexham

My Lords, does my noble friend agree that there would be more goodwill, and possibly more real agreed progress, if there were fewer of these summit meetings? Is it not most regrettable that time after time heads of government, who can never agree anything en principe or ad referendum, box themselves quite unnecessarily into hopeless corners?

Lord Belstead

My Lords, I must say that I think that there is a lot in what my noble friend has said.

Lord Walston

My Lords, the Statement—we are most grateful to the noble Lord the Leader of the House for repeating it—quite rightly states that the most difficult item is agriculture. Therefore, I should like to ask the noble Lord two questions on that most important subject. The first is a relatively simple one. The Statement says that what has already been done by way of reduction of support since 1986 will be set against the 30 per cent. reduction. How much has been achieved since 1986 in the reduction of support and therefore how much remains to be argued about?

The second question is somewhat more complex. Does the noble Lord not agree that however valuable the common agricultural policy was in the earliest days of the Community—particularly of the Six—it has now proved to be entirely incapable of solving the problems not only of agriculture within the Community but above all the problems of international trade and the third world? Have the Government given serious consideration to an entirely new form of support for agriculture with emphasis on the environmental aspects which are now becoming so important and with a return towards a free market in agricultural produce but still with support, through environmental means, for farmers in this country and throughout the Community?

Lord Belstead

My Lords, I must apologise to the noble Lord. I do not have with me the exact figure for how much has already been achieved so far as concerns the 30 per cent. cut. I make the point that we are talking about a 30 per cent. cut over a period of 10 years. If one considers the effect that stabilisers have had in cutting prices since 1986, one is year by year starting to talk about a fairly modest amount of cutting. It is impossible to get agreement even to that in the agricultural council. Like a very small amount of a reduction, that compares with what has been proposed by the United States. However, I shall try to find the exact figure. I shall send it to the noble Lord and put the reply in the Library.

With regard to the much wider question of reform of the common agricultural policy, if one speaks of full-blown reform one is considering treaty change. However, the noble Lord may have in mind what I think is called extensification, certainly grants for environmental farming, and therefore the reduction of production in that way. That is a road which we have been trying to go down in this country for the past two or three years. We have that very much in mind.

Lord Monson

My Lords, I too should like to thank the noble Lord the Leader of the House for repeating such an admirable Statement, which I had the great pleasure to hear live on my car radio on my way to your Lordships' House—and how splendidly delivered it was.

Will he accept that a great many people, by no means all of them members of the Government's party, greatly resent the accusation made by the noble Lord, Lord Jenkins of Hillhead, that the Prime Minister is motivated by excessive xenophobia, merely because, like the vast majority of people in this country, she wishes to prevent this country being absorbed into a European super-state? He might just as well accuse the Canadians or the Mexicans of being excessively xenophobic because they have no wish to be absorbed by the United States of America. To accuse people who wish to retain our traditional right of self-determination of being xenophobic is not worthy of the Liberal Party.

Lord Belstead

My Lords, I am grateful to the noble Lord for his remarks. I take the opportunity of his question to repeat that it is very important to notice that three paragraphs before the end the Statement goes out of its way to mention that this country: intends to be part of the further political, economic and monetary development of the European Community". My right honourable friend believes, that solutions will be found which will enable the Community to go forward as Twelve. That will be our objective". That is a perfectly reasonable and natural objective in the light of the fact that at the special council a way was mapped out which gives alternative ways forward. Those are set out in the council's conclusions which can be found in the Library of your Lordships' House. There will also be further negotiations in the December council.

Lord Stoddart of Swindon

My Lords, I also thank the noble Lord the Leader of the House for the Statement which he repeated. Does he on behalf of the Government agree with the Canadians when they say that if the Uruguay Round collapses it will result in a trade war and slump? If that happens will it not be as a result of the isolationism of France and Germany and their narrow Fortress Europe attitude?

Does the noble Lord believe that this country and indeed all the other countries were bounced by the Italians into making decisions which should not have been made at this point and for which no preparation had been made? If so, is that a good augury for further integration? Is that the way in which decisions will be taken on vital matters? I sincerely hope not. I hope that the noble Lord the Leader of the House will be able to assure us that Her Majesty's Government will not stand for such treatment either for us or for any other member of the European Community.

European trains have been mentioned by various people. It is no good getting on a train unless one knows exactly where one is being taken and can he assured that it will not be derailed along the route or crash into buffers at the other end. Therefore when discussing these matters it is most important that we should not be bounced by the presidency or anybody else into taking rash decisions on a very short timescale.

Finally, I heard the Prime Minister in the House of Commons defend her position. It was not xenophobic to say that she wanted this country to retain its sovereignty, which means that decisions would be taken democratically through our properly elected Parliament rather than by administrative edict through an oligarchy sitting in a foreign capital. That is not xenophobic. It is an expression of what this country has built up over 1,000 years. We should be stupid to throw it away.

Perhaps I could have the assurance that the Prime Minister, unlike the position she took on the Single European Act, will follow those brave and patriotic words by action in future meetings through IGCs? Will she ensure that the rhetoric is transformed into action even if that means vetoing decisions or proposals that would be inimical to the best interests of this country and its continuation as a fully independent state?

Lord Belstead

My Lords, I respect the views held by the noble Lord. He asked me whether there is not a very real danger so far as concerns the GATT Round. My reply is that continued delay in tabling a Community offer poses a genuine threat to the round. I believe that there are others—possibly the United States and Canada, which were mentioned by the noble Lord, and possibly the Cairns group—who may simply walk away if there cannot be some satisfactory meeting of minds and negotiation with regard to agriculture.

Secondly, the noble Lord raised a point which was also put by the noble Lord the Leader of his party about the preparation of the agenda. At the end of this exchange this afternoon I should simply like to say that my right honourable friend was not prepared to pre-empt decisions which are to be taken at the two inter-governmental conferences in December. I believe that that was right. I believe that that is in the interests of the Community and those of this country. That does not in any way prejudice what has firmly been said in the Statement, to the effect that we are in there negotiating, and there is a great deal of negotiating still to do.

Finally, the noble Lord asked me for an assurance. That is ground over which I have already been this afternoon. We have put forward our proposals for the hard ecu and the European monetary fund which would mean what is sometimes called a common currency or a parallel currency. That is faithfully recorded at length in the conclusions of the council, which can be found in the document in the Library. That could lead to a single currency. However, I repeat that we will not accept the imposition of a single currency. We believe that it would be a travesty of sentiment in another place to do so.

Lord Renton

My Lords, is my noble friend aware that in various ways the Prime Minister has shown herself to be a better European than some of her opposite numbers on the Council of Ministers? To give several examples, I mention her initiative with regard to the CAP, her attitude on the Uruguay Round and her insistence earlier that restrictions on capital movements should be abandoned before 1992. Bearing in mind the words of the noble Lord, Lord Ezra, is my noble friend aware that this country is not bound by treaty to have a European currency which excludes the use of sterling? Will he tell us the length of notice that the Prime Minister was given before these proposals for the future of monetary union were considered and decisions—only preliminary decisions of course—were reached upon them the other day?

Lord Belstead

My Lords, I am grateful to my noble friend for his intervention. He says that my right honourable friend and her Government have sought to bring the common agricultural policy under some better regulation. My goodness me, how true that is —and indeed with some success. We have now seen a reduction in the enormous surpluses, which have not been good for anyone, including the producers.

My right honourable friend was in a pivotal position with regard to the success of the Houston meeting of the G7 countries. It is clear from the exchanges in the House this afternoon that the GATT round is in the mind of all, across all parties. My noble friend was right to refer to what we tried to do to push forward the prospects for a single market. On all those issues and in many other ways, yes, my right honourable friend has endeavoured to be a good European.

We are not bound by treaty to exclude sterling. I must apologise to my noble friend. I simply do not have the statistic on when the proposal of economic and monetary union being considered on the agenda was made known to member states. However, I repeat a point that I made earlier. The purpose of the Council was to discuss the CSCE process. A great many other things were added: economic and monetary union was one of them.

Lord Annan

My Lords, is the noble Lord aware that the comments of the noble Lord, Lord Monson, are not absolutely representative of all opinion on the Cross-Benches? Does he agree that perhaps the most disastrous decision made in foreign policy since the war was to sneer and jeer at the Six at the time that they went into conference at Messina, which was the conference that led to the Treaty of Rome? It is precisely because from the Benches opposite we hear from some of those who were perhaps Ministers at the time the same scepticism and hostility to the idea of the European Community that there is cause for alarm.

The noble Lord, Lord Jenkins of Hillhead, was somewhat robust in his comments on the Prime Minister's style of diplomacy. However, the fact that this country time and time again finds itself in a minority of one gives great cause for concern in Europe. I hope that the noble Lord will not take it amiss if it is emphasised that it is sad that that happens so often.

Lord Belstead

My Lords, of course I take seriously what the noble Lord, Lord Annan, has said. However, we need to look forwards and not backwards. With regard to the obviously difficult, although brief, discussions on the GATT round, it seems that the Community from time to time finds it more difficult to take the urgent detailed decisions which have to be taken than to discuss longer term concepts. Whatever the rights and wrongs of the past, we all have to try to look forward.

Lord Harmar-Nicholls

My Lords, is it not a pity that from the Cross-Benches, in particular from one who is held in such high esteem as the noble Lord, Lord Annan, noble Lords should by their emphasis display personal prejudice? He referred to sneers and jeers of people who had doubts about the Treaty of Rome in the early days; but he also referred to what was a clear sneer and jeer as merely a robust reaction. That difference of emphasis conveys a message to me.

Ought we not to bear in mind that 38 of us in the Tory Party voted contrary to the Whip because we thought we recognised in the Treaty of Rome dangers that would develop—and such as are now developing —for the independence and separateness of this country? There was nothing sneering and jeering about it. It was because we felt those dangers were clear in the text of the Bill. I believe that ought to be recognised.

Lord Belstead

My Lords, having said that I respect the views of the noble Lord, Lord Stoddart of Swindon, of course I respect the views of my noble friend Lord Harmar-Nicholls.

Perhaps I may repeat at the end of this exchange what I have said several times. Do not let any of us go away with the idea that in some way at the Rome Special Council irrevocable decisions were taken which will quite definitely lead the way for the future. Two alternative ways forward were mapped out. They are contained in the detailed conclusions which have been placed in the Library of your Lordships' House. They are either to go to what is called Stage Two, of economic and monetary union without, I have to say to your Lordships if one reads those conclusions, any indications as to what Stage Two actually means; or to take the evolutionary approach of the hard ecu in setting up what would be a new institution, a European monetary fund, which has been put on the table by the British Government. Those are matters which together with institutional reforms will be returned to in the December Council.