HC Deb 17 May 1991 vol 191 cc314-5W
Mr. Conway

To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest informal meeting of the European Community's Economic and Finance Ministers.

Mr. Norman Lamont

The Economic and Finance Ministers of the European Community met informally on 10 to 12 May. The Governor of the Bank of England and I represented the United Kingdom.

Discussion of economic and monetary union focused on the content of stage 2 and the transition to stage 3. Differing views emerged on a number of issues and, in particular, the date for the establishment of a European system of central banks.

I made it clear that the United Kingdom was not prepared to commit itself to moving to stage 3 without a further vote by the House of Commons in the future. There was some suggestion that it might be possible to meet the United Kingdom's concern on this point. I took the view that this was a constructive step in our direction but that the IGC was still at an early stage in negotiations and that many issues, including the content of stage 2, would have to be resolved before this question could be addressed in detail.

A proposal from the Presidency setting out frameworks for the approximation of VAT and excise duties in the Community was also discussed. I argued that the approximation of VAT rates at Community level was not necessary for the removal of fiscal frontiers in the single market and I also emphasised the importance to the United Kingdom of continuing to apply our existing zero rates. In the discussion of excise duties, I argued for high minimum duty rates or effective restrictions to take account of the important health and social concerns attached to alcohol and tobacco. In both discussions other Ministers also expressed their different concerns and no agreements were reached.

The President of the Commission gave an account of his approach towards future financing issues in the Community over lunch. In a brief discussion of aid for Bangladesh, I urged that aid should be given through national channels and through the Community's existing budgetary resources.