HL Deb 20 October 1992 vol 539 cc656-66

4.16 p.m.

Lord Wakeham

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the Birmingham European Council held on 16th October. The Statement is as follows:

"With permission, Madam Speaker, I shall make a Statement about the European Council in Birmingham on Friday 16th October. My right honourable friend the Foreign Secretary and I represented the United Kingdom.

"I should like to thank the city of Birmingham, its leaders and its people for the effectiveness and speed of their organisation.

"Following the events in the financial markets a month ago, a number of EC member states asked for this meeting to help restore confidence throughout the Community and to address the issues raised by the market turbulence. Among those concerns—clearly evident in the referendums in Denmark and France—was the unease that too many decisions were being taken centrally in Brussels. The summit conclusions on these and other issues are in the Library of the House.

"Let me deal first with economic and monetary co-operation. At Friday's meeting we reaffirmed our commitment to pursue open market policies, to control budget deficits and to reduce inflation. It was unanimously agreed that these are the basis for recovery and for the creation of new and lasting jobs here and in the Community as a whole.

"The European Council also reaffirmed the necessity of the work set in hand by Finance Ministers after the recent turbulence in the currency markets. It was agreed that the work will involve Finance Ministers, the Monetary Committee, Central Bank governors and the Commission. It will cover recent economic and financial developments in Europe; the implications of changes in the economic environment in recent years. In particular, it will look at the impact of the increasing size and sophistication of financial markets and greater capital liberalisation.

"One critical discussion concerned the negotiations for a GATT Uruguay Round settlement. Over the past two weeks significant progress had been made between the Commission and the United States in all sectors of the negotiation. I asked Commissioner Andriessen to report to the European Council. At the end of our discussion the Commission was given the authority to continue to negotiate with the intention of reaching a satisfactory conclusion in the next 10 weeks. Subsequently, further useful progress was made in talks in Canada over the weekend. A GATT settlement would make a vital contribution to recovery and would be very much in Britain's interest. According to OECD it would lead to an extra 200 billion dollars in annual world output.

"In the Birmingham Declaration we also took significant steps towards bringing the Community closer to ordinary people. The declaration agreed at Birmingham has a number of distinct elements. It recognises the importance of national identity. It acknowledges that the Community can act only where member states have given it the power to do so in the treaties. It lays down that action at Community level should happen only when necessary. It calls for new guidelines so that when Community action is taken it takes the lightest possible form. It introduces better consultation by the Commission before proposals are brought forward; and it calls for a greater role for national parliaments in the work of the Community.

"This declaration provides for the first time a proper framework for the practical definition and implementation of subsidiarity. We agreed that at the Edinburgh European Council in two months' time we must make a reality of this principle. All members of the European Council agreed to take decisions at Edinburgh to make subsidiarity an integral part of EC decision-making. This change of attitude by the Council and the Commission is as important as the procedures and criteria to be introduced.

"Prime Minister Schluter of Denmark reported to the European Council on the present state of discussions on the Maastricht Treaty within Denmark. The Danish Government have published a White Paper and will produce specific ideas shortly. It remains their aim to ratify the Maastricht Treaty, and we plan to set in place at Edinburgh the framework which will allow them to do so.

"The Birmingham Council also gave us an opportunity to review our action to relieve suffering in Somalia and Yugoslavia. The Community has given a lead in both countries.

"In Somalia we called for an immediate ceasefire to allow for the rapid deployment of UN troops and for the distribution of aid and agreed to try to expedite these deployments.

"In Yugoslavia, at British initiative, a Community humanitarian task force will be set up. It will support the UN High Commissioner for Refugees in delivering humanitarian aid. The Community will speed up aid already pledged, which includes 120,000 tonnes of food. We have invited the UN High Commissioner for Refugees to hold a meeting of experts as soon as possible to make sure this aid gets through straightaway. There will be a follow-up meeting in a few weeks' time to ensure that effective action is being taken. Member states also pledged further staff and resources to strengthen the UNHCR effort. I can today announce a further £15 million of bilateral aid to provide 22 more trucks,10 Land Rovers, shelter, medical supplies and personnel. Deliveries will start shortly.

"A confident and successful Community is a vital interest of this country. Sixty per cent. of our visible trade is with the Community. Much of our external investment comes from the Community. Eight of our top 10 trading partners are in the Community. With less than three months to go to the completion of the single market, which could raise Community output by over 4 per cent., it was vital to re-establish confidence in the interests of stability, recovery, growth and jobs in our countries. The Birmingham European Council did that."

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

4.25 p.m.

Lord Cledwyn of Penrhos

My Lords, we are grateful to the noble Lord the Leader of the House for repeating the Statement. A number of constructive achievements have been mentioned in the report, but the people of this country and Parliament were looking to the Berlin Summit meeting as an opportunity and a first step towards resolving the economic difficulties in which the Community and this country find themselves.

The Prime Minister, who was President, had a special responsibility to try to make some progress, but the whole exercise was put at risk by the Government's coalmine closure policy and the totally inept way with which it was dealt. The sad fact is that the 11 leaders of the Community came to a country rent by one of the most serious divisions of the century and with its confidence undermined by incompetent leadership. Far from giving us hope for economic recovery, or indeed planting a signpost towards it, they have left us with less hope than before. If I am wrong, perhaps the noble Lord will tell the House of one clear economic initiative which started in Birmingham.

Are we certain that the Maastricht Treaty will be ratified in the near future? The answer is no. Are we certain what our policy will be if Denmark continues to stand by her referendum decision? Once again, the answer is no. The 12 must ratify. Did Birmingham give us a definition of subsidiarity? Once again the answer is no. It gave us a "framework"—as is mentioned in the Statement—whatever that may mean. Can the noble Lord clarify the Government's intentions on re-entry into the ERM? Was this discussed in any detail in Birmingham? Furthermore, can he say when the European Communities (Amendment) Bill will proceed to Committee in another place? Would he not agree that we are nearer a two-speed Europe than we were before the Birmingham Summit?

Finally, in his Statement the Prime Minister referred to the importance of the GATT round. Of course we agree with that. But are the Government confident that the French Government will agree on the agricultural proposals within the 10 weeks set out in the report?

Lord Jenkins of Hillhead

My Lords, we too are grateful to the noble Lord the Lord Privy Seal for repeating the Statement. We can endorse some of the points in it, notably the great importance of a GATT settlement, the prospects of which seem to have become slightly better in the last 24 hours, although I think not as a result of anything done at Birmingham.

It is clear that this European Council accomplished nothing of any significance. But could the noble Lord tell us what it was intended to accomplish? After all, this was not a routine meeting. Her Majesty's Government have been campaigning for some time to go down from three to two European Councils a year and they succeeded in achieving that. Then we had the special non-routine one which put it up to three. Presumably there was some very considerable purpose which was thought to be there. But it is difficult to see what it was.

I regret that the city which I had the honour of representing in Parliament for 27 years should not have its name associated with a more constructive and memorable European Council than this appears to have been. What was its purpose? It can hardly have been designed to improve on Maastricht. We well remember the Prime Minister's statement that Maastricht was game, set and match for this country. I doubt also whether he invited his fellow Prime Ministers to discuss his other most memorable obiter dictum of the last months—that he hoped to see sterling replacing the deutschmark as the central and most trusted currency within the European Community.

It would be helpful to know what was intended, even if it was not achieved. I hope that the Lord Privy Seal will tell us that. Otherwise we are left with the impression that the Birmingham European Council fits only too well the pattern of recent government initiatives: ill thought out, weakly executed and ending in a whimper.

Lord Wakeham

My Lords, the noble Lord, Lord Cledwyn, said something which slightly put me off my stroke. He referred to Berlin, but I think he might have meant Edinburgh.

Lord Cledwyn of Penrhos

My Lords, I meant Birmingham.

Lord Wakeham

My Lords, I was confused because I thought the noble Lord said Berlin, and I was in Berlin on Saturday with his right honourable friend the Leader of the Opposition in another place, at Willy Brandt's funeral.

I am grateful to both noble Lords for some part at least of what they had to say. If your Lordships will allow me to do so, perhaps I may leave questions on the coal industry until a bit later in the afternoon.

The purpose of the Birmingham Council was first to respond to the request of a number of heads of government who thought that it would provide a sensible opportunity to discuss matters in view of the particularly turbulent affairs that had taken place in the Community, and especially in the financial markets, in recent weeks. In my view, we need to look at the Birmingham Council meeting as a part of the British Presidency. It should be viewed in the light of our Presidency as a whole. It dealt with issues of deep concern to this House and made progress on bringing the Community closer to its citizens.

It was important that the heads of government should discuss the current position in GATT, which both noble Lords considered an extremely important matter, as I know do all Members of the House and the Government. It was important to take stock of the position. As the noble Lord, Lord Jenkins, said, it is looking a little bit better now than it was a couple of weeks ago. I do not believe, however, that I am in a position to go further than what my right honourable friend the Prime Minister said in his Statement.

The meeting also discussed and took stock of the position with regard to humanitarian assistance to both Yugoslavia and Somalia.

The noble Lord, Lord Cledwyn, asked me about the ERM. The Birmingham Council confirmed the view of the European Finance Ministers that they should carry forward their reflection and analysis along with governors, the Commission and the Monetary Committee so that they can take account of the wider economic and financial aspects that were referred to in the conclusions of the Birmingham meeting. I believe that that is the right and proper way forward.

With regard to the Maastricht Bill in another place, the position is that the Prime Minister has indicated that he would like to get on with that legislation as soon as possible. Discussions are going on through the usual channels to find a suitable date.

4.32 p.m.

Lord Boyd-Carpenter

My Lords, will my noble friend amplify a little what both the Prime Minister and he himself have said about the Birmingham discussions on GATT? There was a certain qualified optimism in the Prime Minister's Statement, but does that mean that the French are now at long last making it clear that they are prepared to accept the necessary cutbacks in European agricultural support in order that progress should be made? Was any indication at all given by the French of flexibility in that direction? In that context, my noble friend used some expression about "10 weeks". Perhaps he could amplify that. Is it expected that a decision on the GATT round will be achieved within the next 10 weeks? If so, that is of the greatest importance, but, if not, what is the relevance of 10 weeks?

Lord Wakeham

My Lords, I do not know that I can add a great deal to what was in the Statement in order to assist my noble friend and the House in this matter. However, the first thing that I can say is that the heads of government were unanimous in calling for an agreement this year, including the French President, who was present at the summit. Everybody wishes to achieve agreement. Since then, as I understand it, good progress has been made with the United States in the meetings that were held in Canada last weekend. This remains a high priority during the UK Presidency. My understanding of the significance of 10 weeks is that if we reach agreement by the end of the year, by that date the United States Congress's fast-track procedures will enable early ratification of the agreement. We are most anxious to achieve that.

Lord Barnett

My Lords, perhaps I may congratulate the Prime Minister on managing to pad out a Statement about what happened at Birmingham when the summit did so little. Does the noble Lord the Leader of the House agree that the Prime Minister would earn rather more respect if he irrevocably and unequivocally stated that he intended to introduce the Bill to ratify the Maastricht Treaty regardless of how he defines the S-word, given that he signed the treaty as it stood with the word "subsidiarity" in it? While I am about it, perhaps I may add that he seemed to be saying that a further meeting would take place on the exchange rate mechanism which might lead to our rejoining it sooner rather than later. Do I interpret that correctly?

Lord Wakeham

My Lords, I have known the noble Lord for many years and while I normally find his speeches entertaining, I believe that I have been present on occasions when they might have been subject to a little padding. Nevertheless, I do not believe that what he said is a fair reflection upon the Statement made by my right honourable friend the Prime Minister on the Birmingham meeting.

The position with regard to the ERM is, I think, quite clear. At their meeting in Brussels some time ago the European Finance Ministers agreed that they should carry forward their analysis and reflection upon the situation that we all know about. That work is being set in hand and the heads of government at Birmingham endorsed their decision. That process is taking place. Until that has been done, there will not be any decision on whether the United Kingdom is able to rejoin the ERM. We have made our position quite clear. We wish to rejoin, but only when the right conditions appertain.

On the Maastricht Bill, again I think that the noble Lord is being less than fair to my right honourable friend the Prime Minister who has made no secret of the fact that he intends the Bill to come before Parliament, as he reaffirmed the other day. Discussions are taking place through the usual channels to find a suitable date for the first debate which has been promised.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that some of us find these statements a little confusing? In one statement the Government seem to be hot but in another to be cold, especially with regard to subsidiarity. At the minute that is just a word and none of the nations has agreed what it really means. On the other hand, the Prime Minister has stated that we shall support Denmark's position until it makes it clear that it wishes to sign the treaty. Legally, Denmark is right because the treaty cannot take effect until everybody has signed it. At the moment by a referendum Denmark has said that it is not in agreement with the treaty and our Government have said that until Denmark is satisfied we will not ratify the treaty. However, we are now told that the Bill will be pushed through this year without that definition having been arrived at.

Should not the Government make up their mind in which direction they want to move? Either the view taken on Maastricht should be unanimous and the real meaning of subsidiarity should be defined or we must accept that the agreement is not unanimous and the treaty should be dropped. To push the legislation through either House using the Whips and in the absence of a referendum of some sort does not accord with the nation having its say on this very important constitutional development.

Lord Wakeham

My Lords, when my noble friend says that he is confused about these issues I find that somewhat hard to believe. He knows the issues perfectly well, but I shall nevertheless seek to explain the position as best as I can. First, the concept of subsidiarity was included in the Maastricht Treaty and would therefore become part of Community law for the first time. A very important principle was thus established. What we are seeking to do during the British Presidency is to put some flesh onto that idea and demonstrate how subsidiarity will be put into practice in the hope—and I think in the confident expectation—that it should be possible to reach agreement at the Edinburgh Summit as to the way forward.

There are three elements to putting subsidiarity into practice. First, there are the questions of procedure in the Council to see that all subsidiarity aspects of all proposals are properly taken into account. Secondly, we have to determine the criteria for applying subsidiarity so that the Community will apply it to existing and proposed legislation. Thirdly, we intend to identify before the Edinburgh Summit examples to demonstrate the first results of that examination. That is the position on subsidiarity. I think that that is fairly clear and straightforward.

With regard to the Danes, my noble friend is of course right. Unless the Danes ratify the Maastricht Treaty the treaty will not come into force. It is in the end their decision what they do. However, what the Prime Minister said was that he did not think earlier it was right to proceed with the Bill through Parliament until it was clearer to him and to the Government how the Danes were proposing to set about dealing with the problem which they fully recognised they faced as a result of their referendum. But the Danish Government have indicated, by the publication of their White Paper on 9th October following inter-party consultations, that they hope to put proposals to the Community soon which are designed to pave the way for ratification. That is the basis of the Danish position. That is why it has altered from the original statement by my right honourable friend the Prime Minister; and I believe that that too is pretty clear.

Lord Bruce of Donington

My Lords, is the noble Lord aware that the version which he has now given differs substantially from the completely specific undertaking that was given to Members of another place by the Prime Minister on 24th September? The Prime Minister said: So we need a definition—a settled order—of what is for national action and what is for Community action. We need clear criteria by which Community proposals will be judged. When we are satisfied that such a system has been put in place, and when we are clear that the Danes have a basis on which they can put the treaty back to their electorate, we shall bring the Maastricht Bill back to the House of Commons".—[Official Report, Commons,24/9/92; col.8.] The noble Lord has said that the second criterion may have been satisfied, but certainly not the first. The Prime Minister repeated the undertaking at a later stage in his speech on 24th September last. It was quite clear that there was no intention to bring back the Treaty of Maastricht for ratification to another place and therefore to this place until both of those conditions had been satisfied.

Quite clearly, on the basis of what the noble Lord has said this afternoon, the first position has not been satisfied. Indeed the President of the Commission himself, speaking at the European Parliament on the day before the Birmingham conference took place, said: Look, I have got 200,000 ecus here for anyone who can send me a one-page solution. We will open our arms to it". According to The Times of 15th October: M. Delors has told an emergency session of the European Parliament in Strasbourg that the British Presidency's idea of subsidiarity was not his and openly appealed to the people of Europe to overcome the dilemma". It is quite clear that the President of the European Commission strongly disputes the definition of subsidiarity. Indeed, the Government so far have not been in a position to offer a satisfactory explanation to the British public.

In those circumstances, I put it to the noble Lord opposite that the intention to bring back for ratification the treaty to another place before the position about subsidiarity and its application has been completely satisfied in accordance with the solemn undertaking given to another place on 24th September is yet another example of where we can have no reliance on the good faith with which this entire operation has been conducted.

4.45 p.m.

Lord Wakeham

My Lords, an analysis of the noble Lord's remarks confirms the position as I put it. The noble Lord stated the position in September and quoted some part of the Prime Minister's speech. I make no complaint about that. The position has moved on since that time. The fact is that the Prime Minister is satisfied as a result of the Birmingham Summit that we are making progress towards an agreement about subsidiarity.

The noble Lord quoted from the President of the Commission, M. Delors, speaking a day before the summit. I do not know whether the noble Lord quoted everything he said but both of those events took place before the summit on 16th October. At that meeting we were satisfied that we were making progress about subsidiarity. The Danes are making progress with regard to ratification. Those were two of the conditions on which my right honourable friend indicated he wished to make progress before he brought the Bill back to Parliament. So I think that the noble Lord, although he would hate me to have to say this, has confirmed the position as I put it to the House.

Lord Cockfield

My Lords, I wonder whether my noble friend would also agree that bringing the Bill back for ratification is the only way that another place and this House can properly debate the matter and come to a conclusion. The course of action recommended by the noble Lord, Lord Bruce of Donington, would deprive this House and another place of the opportunity of debating these matters properly. Perhaps the noble Lord might explain why he wishes to deprive us of that opportunity.

Lord Wakeham

My Lords, I am sure that the noble Lord will find another opportunity to deploy those arguments. As is so often the case, my noble friend Lord Cockfield has hit the nail firmly on the head. He is absolutely right. The right and proper way to deal with the treaty which was agreed by the British Prime Minister at Maastricht is to pass it through both Houses of Parliament so that it can be properly debated.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that the Prime Minister would gain a good deal more support and respect if he put the Maastricht Treaty to the British people in a referendum, particularly bearing in mind that the treaty was not available during the general election and that therefore there can be no mandate? Secondly, does he agree that the most frightening thing that came out of the Maastricht Treaty was that the President of the Commission, M. Delors, was going to prepare a 20-page document on subsidiarity? Can we have an assurance that before that is discussed at the Edinburgh Summit this House and another place will have the opportunity to discuss it and to declare upon it?

Lord Wakeham

My Lords, the noble Lord raises the question of a referendum. I do not think that we need deploy the arguments again. My position and the position of the Government is still the same as it was before and the noble Lord's position, I am sure, is still the same as he has expressed it in the House before. We do not believe that in these circumstances the right way to proceed to the ratification of the treaty is by means of a referendum.

With regard to the question of subsidiarity, on which there has been some progress, I do not believe it would be sensible to discuss in this House documents produced by the Commission which will be the subject of discussion and decision by the Council of Ministers at the summit in Edinburgh until the members of the European Council have reached some conclusions. At that time there is a perfectly proper case for the House to discuss the matter to see whether it approves of what has been done. That seems to be the normal way to proceed.

Lord Beloff

My Lords, I should like to ask my noble friend the Leader of the House a rather different question. Does he not think that there is some simple significance in the fact that we are discussing this matter while awaiting the commencement of a debate on the position of the coal industry? Is it not a general feeling in the country that one reason why the Government have run into domestic, economic difficulties—I shall not put it any stronger than that—is that Ministers' attention for the past few months has been concentrated not on our domestic problems but on seeking some way to get this foolish and unwarranted Treaty of Maastricht through Parliament? Ministers spend their time hopping from one capital to another or entertaining one foreign minister or another when they should be in contact with their own electorate and probably would have come to different conclusions on some matters. Finally, when it was suggested to the Prime Minister that he should pay more attention to coal, is it not true that he sent another dinner invitation to the Chancellor of Germany?

Lord Wakeham

My Lords, on the narrow point as to why we are talking about this issue now, I have to tell my noble friend that there was a request for the Statement that was to be made in another place to be repeated in this Chamber. The reason we are not currently discussing coal is that we are dealing with the Statement the repetition of which was requested by this House. I do not feel that I should apologise for that fact.

Moreover, I do not accept for one minute the proposition that in some way the very great difficulties that the country and the economy, along with many other countries in the world, are experiencing as a result of this very difficult world recession have been neglected in any way because of the discussions over Maastricht. Indeed, 60 per cent. of the exports of this country are with our Community partners. The completion of the Single European Act, and of the GATT talks in which the European Community is negotiating as a bloc, is fundamental in seeking to make progress with regard to the recession. Therefore, contrary to what my noble friend says, I believe that absolutely the opposite is the case: the talks and discussions on Maastricht are most vital for the future of the British economy and for the rest of the world.