The Council has met in four capacities during that period, involving Ministers concerned with foreign affairs, agriculture, social affairs and energy matters.
The principal matters dealt with were general policy papers produced by the Commission in response to decisions reached at the summit meeting last October.
These concerned first, the next stage towards economic and monetary union where there was a brief reference to the joint float, on which the Government's position is unchanged; secondly, regional policy and the creation of a regional development fund; thirdly, the Community's position in the multilateral negotiations under the GATT to be started later this year for the further liberalisation of world trade; fourthly, the negotiations due to start around 1st August for new agreements with the countries now associated with the Community under the Yaoundé and Arusha Conventions as well as those with which association is envisaged under Protocol 22 of the Treaty of Accession; fifthly, the development of general guidelines in the field of social affairs; and, sixthly, the development of a concerted policy on energy matters.
In each case the Council has commented upon the broad approach outlined by the papers, copies of which have been made available in the Library of the House.
This now allows the Commission to proceed to a more precise definition of the aims of the Community in these fields and for the next phase of the work to go forward.
In addition, approval was given to an agreement between the Community and Norway to provide for a free trade area between the two and to bring Norway into line with the remaining EFTA countries which did not seek membership.
Further consideration was given to the development of a basis for negotiation with the countries bordering on the Mediterranean.
Progress was made towards reaching a formula as a basis for support for the production of coking coal for the steel industry.
The purpose is to subsidise the production of coal of this sort by any member country for use in another.
As the United Kingdom is to all intents and purposes self-sufficient in this product the arrangement affects us very little, though it is likely to procure some small net advantage.
Discussion also took place concerning the early convening of a conference with representatives of employers and unions to consider the proposals for a Community policy on social affairs.
I should make clear that the Council's discussion of future regional policy did not cover the quite separate question of determining under Article 154 of the Treaty of Accession those areas of the United Kingdom which are to be regarded as peripheral for the purposes of existing Community rules on the application of competition policy to regional aids.
This has been the subject of a number of separate discussions, including talks which took place yesterday in London between my right hon. Friend the Minister for Industrial Development and other of my right hon. Friends and M. Borschette, the Commissioner responsible.
It was made clear to him that Her Majesty's Government are only prepared to contemplate a determination which does not involve cutting back on the present levels and coverage of assistance available under the Industry Act.
The House will be kept informed of developments.
I first give an unqualified welcome to the agreement between the Communities and Norway, which I am sure will be greeted with satisfaction, not only because of our long and traditional friendship with Norway but because the nature of the agreement reached with Norway is one that many of us believe to be very satisfactory in principle, one which could well have far better served the interests of this country.
On the other matters which the right hon. Gentleman has brought before us, he will, I am sure, understand if I concentrate my questions on only three points, because the field is so wide.
First, I put it to him that the whole question of the second stage of the economic and monetary union which was discussed on a paper from the Commission at the recent Council of Ministers is, in the view of many of us, entirely premature, and not only premature but dangerous in so far as it involves the premature fixing of the pound and the end of its present floating. Will the right hon. Gentleman confirm that there has been no change at all in the position outlined by his right hon. Friend the Prime Mini- ster—that there would be no fixing of the pound without the total commitment of reserves by all the other member countries? Even that, if it were accepted, is something which we should want to examine very carefully.
Secondly, on regional policy, while we note that the report has nothing to say about the common regional policy which is still being much discussed in Europe, the statement has a great deal to say about the effects of Community discipline on our own regional policy operated in in this country.
The right hon. Gentleman obviously sought to be reassuring in what he said, but when he says that the Government would not contemplate a determination by the Commission that involved any cutting back of the level of support under the Industry Act, will he take it from me that that is only a very partial safeguard for both the development areas and the intermediate areas? The level of support in those areas is not crucially determined by the Act. It is determined very much also by the regional employment premium, about which we have heard nothing, and by the whole range of incentives to industry—investment incentives, free depreciation and the like—which, unless we assert ourselves very strongly, I understand could be ruled out by decisions of the Commission, on the ground that they infringe the principles that the Commission agreed even before we became a member.
Will the right hon. Gentleman confirm that under Article 154 of the Treaty of Accession it does not lie in the Government's power, because they have already accepted the Commission's authority under the Treaty, to say that they would not be prepared to contemplate a Commission determination? I understand that that is something that the Commission itself has the power to decide, not only under the Treaty of Accession but, emphatically, under the Treaty of Rome.
Lastly, I should like to refer to the most important talks that are to take place with the United States, the multilateral trade talks later this year. Can the right hon. Gentleman confirm that he and his right hon. Friend the Minister for Agriculture, Fisheries and Food have pressed and made sure that agricultural trade matters, including the common agricultural policy, will be subject to serious multilateral negotiations when the trade talks begin, and that we have rejected the French effort to exclude any serious debate on agricultural policy, which the French made in the Council of Ministers. I am sure that the right hon. Gentleman will agree that when such important matters of this kind are raised affecting our future trade and monetary position, the future of the Yaoundé and association agreements, it is incumbent upon him to press his right hon. Friend the Leader of the House for adequate time to debate these matters before any Community determinations are reached in June or July.
It is neither implied nor implicit that the studies made for the attainment of the second phase of economic and monetary union involve an obligatory return to the Community float. I make it clear that the situation has in no way changed since the Chancellor of the Exchequer made the position abundantly clear to the House in March. In so far as the right hon. Gentleman seeks a reassurance on that, he has it.
In dealing with Article 154 of the Treaty of Accession and its effect upon the existing assisted areas in this country the right hon. Gentleman made use of the expression "Community discipline." I should bring to his mind the thought that Community discipline is not a matter of damage to us—quite the contrary. It is true that the Community discipline to which he refers prevents the concentration of investments which are mobile by unfair bidding-up between member countries for those investment operations. To this degree it represents a discipline which I am bound to say I welcome and which I believe is to our advantage.
The right hon. Gentleman asked whether the recent outcome of the discussions by the Commission would penalise the full arrangements we have for helping our assisted areas. I can reassure him. It seems exceedingly unlikely. As I have said in the statement, it is our determined intention to see that we are not put in a position when we are obliged to reduce the incentives we currently make available for the regions.
The right hon. Gentleman asked me about our attitude towards a substantial agricultural element in the multilateral trade negotiations. I can again confirm that we have consistently pressed for there to be a substantial agricultural element. I should add that it has not been the Government's intention, and it will not be this Government's intention, to seek to break up the common agricultural policy, which we accepted—as our predecessors accepted it, when they approached this problem—as a factor of life in the Community. That does not mean that there are no agricultural matters, outside the existence of the basic requirements of the common agricultural policy, which are open for consideration in the multilateral talks. It is certainly the Government's intention to make sure that such elements are brought into the discussion at the appropriate time. I will bring the comments of the right hon. Gentleman about the need for additional time to debate these matters to the attention of my right hon. Friend.
The right hon. Gentleman knows that this is a matter which has been lengthily debated in the House. The Government firmly believe that the advantages we obtained by joining are many and extensive and go much further than those of the free trade area provided for Norway. We believe that there are real advantages, in terms of the extension of our industrial position in Europe, which are not available to the Norwegians. We believe that the development of a number of policies which are currently in the course of elaboration in the Community will be of immense advantage to this country. The right hon. Gentleman is barking up the wrong tree.
Among all the subjects mentioned by my right hon. Friend I did not hear any talk of the International Sugar Agreement, which poses an urgent problem. Can he confirm that the Council of Ministers discussed this matter and came to an agreement that the Community should join the International Sugar Agreement before the forthcoming conference?
No, Sir. The International Sugar Agreement has not been under discussion during the meetings of the Council. I should remind my right hon. Friend that some time ago the Community stated its intention favourably to consider membership of the International Sugar Agreement. The Government will be pressing their partners to that end in the course of any discussions that take place.
Would the right hon. Gentleman not agree that the central weakness of the Green Paper on regional policy published by the EEC a fortnight ago was that it was subject to Articles 92 and 94, which are the restrictive provisions of the treaty and which can stultify the freedom of State Governments to carry out regional policies? Is he prepared to ask for a relaxation of these impediments upon our system?
There is no doubt that it is not in my mind nor in the mind of the Commission that the provisions of Articles 92 and 94 would seriously limit the application of the policies proposed by Mr. George Thomson in the paper which he circulated to the Council. In preparing the paper the Commissioners had very careful regard to the provisions of the treaty so that it is unlikely that they would produce proposals which ran athwart the treaty. On the contrary, it is right to say that this paper, which embodies many of the ideas and thoughts which have been generated in the House and the country, offers a real opportunity for us to attain through the Community substantial help for some of the regions which need assistance.
May I return to this question of regional policy? Will the right hon. Gentleman confirm that labour subsidies in the development areas are at present within the rules of the Community and that there is no intention to change this? Will he therefore say whether the Government intend to wait until after the matters in the Green Paper have been resolved before deciding on the future of the regional employment premium?
My right hon. Friend the Chancellor of the Exchequer has already made the Government's view on the regional employment premium abundantly clear. I will not seek to elaborate it. It is right to say that the existence of a labour subsidy is not against the provisions of the Treaty of Rome, which has no provisions automatically debarring such a scheme. In fairness to the House, it is true to say that there has been a pre-judgment against this kind of support. It is not something which is embodied in treaty terms.
Through the papers which have been made available to this House, hon. Members have the existing recommendations and proposals which have been put before the Council. These have to be refined, in the next phase and put into a more precise state. I fully expect that elaborated papers will be in the hands of hon. Members in the same way. Members of this House have the widest capacity for ensuring that matters which they consider important are fully debated.
I certainly did not say that REP is not to go forward. I said that REP is subject to the provisions which my right hon. Friend the Chancellor of the Exchequer outlined during the course of a statement which he made on the subject last year, and that involved the progressive running down of REP at a cadence to be decided in due course.
Would my right hon. Friend assure the House that when it comes to discussing the question of worker participation throughout the European Economic Community, this Government will support that strongly?
Secondly, would my right hon. Friend assure the House that the real difference between the agreement between Norway and the EEC and this country and the EEC is that whereas this country has a full part to play in what the EEC does, Norway can play no part but must stand idly by while she is affected by the EEC?
On the first question, it is correct that my right hon. Friend the Secretary of State for Employment, during the course of the recent Council meeting of the Ministers concerned with social affairs, referred to worker participation, and made a positive statement on this Government's interest in this matter and determination to press forward with it. That will be the pattern of discussion we shall pursue.
As far as Norway is concerned, I entirely agree with my hon. Friend. I should point to the five papers which have now been made available in the Library, and ask Members whether objectively they cannot see within them the wide field of representation and points which have come from here. That in itself is a proof of what my hon. Friend says.
The right hon. Gentleman reported on the efforts to get a co-ordinated energy policy. Is he aware that up to now this House has heard nothing of the Government's thinking on this vital issue? How can it be that the Government can put a point of view on the Continent to which we are not party?
Here again the Commission paper on the subject is before the House. It would be fully open to Members to raise these matters, and they would certainly be replied to.
I should equally point out that the question of energy policy is inevitably at an early stage of discussion in the Community, bearing in mind that there has been little discussion in this field of policy for some considerable time. Therefore, the meeting which took place on this subject yesterday was the first meeting for three years or so, and inevitably found itself faced with a wide range of discussion. It will take some time.
I am rather disinclined to contemplate hypothetical disasters. I should say to my hon. Friend that I intend strongly to pursue the purposes which I have outlined, and at this stage I do not contemplate having to deal with what would be a defeat of that proposition.
I understand that the Minister has had some discussions with regard to the exploitation of coking coal. Is he aware of the fact that very valuable seams of coking coal are under the Forth area of Stirlingshire? Roughly 20 years ago the Coal Board spent almost £1 million on sinking a mine to go down to that coal, but disbanded it because of lack of demand for coking coal at that time. I hope that he will bear that factor in mind when he is having further discussions on the subject.
Yes, indeed I will. I am aware of what the hon. Gentleman says. I must point out that the cost of coking coal in this country, as in other Community countries, is pretty high in relation to imported supplies. It is difficult to maintain the efficient fuelling of the steel industry. As the hon. Gentleman knows, it has now been found necessary to have recourse to a subsidy in that field, although this subsidy little affects us.
This was one of the matters which was discussed at the Council meeting yesterday. It is right to say that with differing degrees of insistence or emphasis, all member States are concerned about the future of the energy policy. I recognise—and there is no dissentiment on this—that it is necessary to have a concerted position in Europe in relation to energy policy.
Equally, I believe that the problems of the mounting demand, both in the United States and elsewhere, is a worldwide problem which will need some form of worldwide solution.
What I have said about the problem of starting these discussions after a long intermission precludes one from going further than that in response to my hon. Friend's question.
May I put to the right hon. Gentleman the last point put by my right hon. Friend the Member for Stepney (Mr. Shore)? Does he in his heart believe that what we have been going through for the last quarter of an hour is the right way to discuss matters of which he has informed the House this afternoon? Does he believe that it is quite right for a British Member of Parliament to be told that all these important papers are there to be read in the Library, with not much chance of doing anything about it?
Would he not, finally, agree that what we have had demonstrated this afternoon confirms the grave apprehension of many of us that this European Economic Community will undermine the great traditions of British democracy, and that it is about time we stood up and said this loudly and clearly?
In view of the fact that my constituency is closely associated with Norway, could I convey my congratulations to my right hon. Friend for the new arrangements? I am going to Norway on Friday.
In view of the fact that my right hon. Friend made a comment about the regional employment premium, and in view of what the Chancellor has said, would my right hon. Friend also bear in mind that I do not agree with the Chancellor on the regional employment premium? Therefore, when this matter comes up for discussion, would he please look at both sides of the question because it is a good thing to have criticisms as well as support?
Could the right hon. Gentleman say what are the indications of future investment policies rising out of the EEC fund for peripheral nations such as Wales? Does he not think that the regional fund is insufficient for requirements and that, with the free flow of capital from this country, future investment in the Community will be centred in one area, such as Paris, as the centre of the radius taking in London, to the detriment of small nations such as Wales? Will he please tell the truth?
The first truth to tell is that no figure whatever has yet been stated in respect of the regional development fund of the Community. The matter is still open for discussion and will no doubt be freely and intensely discussed in the course of the next weeks and months.
On the second point, it is indeed precisely the point on which I was responding to his right hon. Friend, that the provisions of Article 154 are a support for our own prospects of investment in this country.
Before these negotiations start in September in Tokyo, I am convinced that the House will have every opportunity to express its views as the papers which are at the base of the Community's thinking on how it should handle its part in these negotiations become available to the House. Furthermore, it seems perfectly evident that the length of these negotiations will be considerable. The House will be continually informed of the progress and will no doubt have an equal opportunity to comment as the negotiations go forward.
Since we have been a member of the Community, to the best of my belief there has not been discussion in the Council of the issue to which the hon. Gentleman refers. As he knows, in the European Parliament there has been considerable discussion on the subject, as there has been within the European working parties and committees. This matter as yet has not come before the Council of Ministers, but I have no doubt that it will.
I am surprised and disturbed by what my right hon. Friend said about CAP. If I may remind him, he said that there might be peripheral changes which might come up for discussion. That is in direct contradiction to the assurance which my right hon. Friend the Minister of Agriculture, Fisheries and Food gave to the House three weeks ago after the European Price Review. Is the undertaking which my right hon. Friend the Minister of Agriculture secured at that time—namely, that there would be a fundamental reappraisal of the CAP—superseded by what my right hon. Friend the Chancellor of the Duchy of Lancaster said today?
No. The word "peripheral" is my hon. Friend's, not mine. On the contrary, I said that it was not the purpose of the Government to undermine the basic principles of the CAP. My right hon. Friend the Minister of Agriculture certainly did not in any way give the impression that that was the purpose. [HON. MEMBERS: "He did."] What he said was that the Commission had undertaken to make a deep-seated study of the CAP in today's circumstances with a view to seeing whether modifications and improvements should be made. This is a matter which will go forward and one to which, obviously, the Government attach great importance.
In the discussions on energy, was the question of North Sea oil raised in the context that it is Common Market oil, as has been claimed within Europe? Were there any discussions on the coal mining industry? Common Market countries have slaughtered their coal mining industry and have begun to regret it. Were there any discussions on new coal pit sinks and where they are likely to be?
No mention was made of North Sea oil during the Council meeting on energy yesterday. On the subject of coal mining, there was extensive discussion on the importance of this source of fuel to the Community from many points of view. There was no specific discussion on the subject of the sinking of individual pits, but Ministers concerned with energy policies expect to undertake further examination of the importance of coal in the future to the Community.
Ministers certainly had many nuances of difference in their views, but it would not be right to say that there were fundamental disagreements on the Commission paper. Indeed, it should not be so, because the Commission was authorised to proceed with the paper to formulate more precise facts and proposals for elaborating this mandate for discussion. There were many comments, which the Commission will take into account.
Yes. This was a matter of specific discussion because one of the papers to which we were addressing ourselves dealt with the negotiations to take place later this year to replace the Yaoundé and Arusha Conventions and to provide, I hope, new single-type agreements to embrace all existing associated and associable countries, or as many as possible. Many of these countries are involved in the Commonwealth Sugar Agreement. As my hon. Friend knows, within the framework of Protocol 22 there is specific provision with regard to sugar. That specific provision has been firmly emphasised and underlined during the two Lancaster House meetings, the last of which took place earlier this year.
Before the Community finalises its regional policy, will the Minister arrange for the Regional Commissioner to visit all development areas in Britain, particularly the North-East, to acquaint himself with the British view-point? On the question of Norway and other EFTA countries which have not joined the Common Market, does the Minister realise that the agreement was beneficial not only to Norway but also to the North-East which was able to share in Norway's oil boom which otherwise might have passed us by?
I know that it is Mr. Thomson's personal wish to visit all the main areas throughout the whole Community where material assistance is required, and the North-East will obviously not he missed out. I am glad to hear what the hon. Gentleman said about the effect of the Norway Agreement.
Does not my right hon. Friend agree that it is important for the House to have an opportunity of discussing the GATT negotiations before the Community reaches a fixed negotiating position? Will not the GATT talks represent a unique opportunity to secure free trade in industrial goods right across the free world? In view of the importance of this, does not my right hon. Friend agree that this question and answer procedure is unsatisfactory? Does not he himself want this matter to be fully debated on the Floor of the House at an early date?
I personally welcome as many opportunities as possible to talk about these matters on the Floor of the House, or indeed elsewhere in the House. I should be happy to find opportunities to do so in addition to those that already exist. I say firmly to my hon. Friend that information will be available upon which debates can take place. There is the necessary machinery. An ad hoc Select Committee of the House is considering the means by which these matters may be more effectively ventilated. Surely these matters are in the hands of the House?
Will the Minister reconsider the reply he gave to my hon. Friend the Member for Midlothian (Mr. Eadie) that North Sea oil was not discussed at the meeting of Ministers responsible for energy? I find that extremely difficult to believe in view of the Commission's document and its assessment going back as far as 1968. Will the Minister accept that we in Scotland would find it difficult to accept North Sea oil being used as a bargaining counter in a common energy policy when it should be used as a bargaining counter to get agreement on scarce resources of oil and other energy within the Community, the United States and Japan?
I can only strongly reaffirm what I said just now, that North Sea oil was not discussed yesterday during the meeting of energy Ministers. What were discussed, perhaps naturally, were the gross figures of supply and demand. These were not specifically broken down, except in broad terms as between Middle East supplies and supplies from other sources. It is perhaps not altogether surprising that North Sea oil supplies were not identified and separately discussed.
Will the Minister accept that before the regional development fund has any realistic hope of acceptance three conditions must apply? First, there must be no discrimination in the extent of coverage and the amount of assistance under the British national development policy. Secondly, in order to be meaningful the fund must run in terms of hundreds of millions of pounds. And, thirdly, the genuine peripheral areas, such as South-West Wales or North-West Wales, must get extra assistance even above those development areas which are far more advantageously placed.
On the first point, I must underline the fact that the question of the definition of assisted areas in this country as peripheral or central is a matter entirely divorced from the development of the regional policy or the setting up of the regional development fund. The two things have absolutely nothing to do with one another and the basis on which these two activities are conducted, and indeed the bodies by which they are conducted, are quite different. I must insist on that point.
I take note of the hon. Gentleman's rather bold statement about quantity, which I am interested to hear. I am not sure that I can undertake that specific parts of Wales will be at an advantage as against other parts of the country, but I take note of what the hon. Gentleman said.
Is the right hon. Gentleman aware that the House is pleased to see him at the Dispatch Box and wishes to see him more often, but also wishes —and this is the point of some questions put by my hon. Friends—to have the opportunity of debating these matters in addition to questioning him on them?
Perhaps the right hon. Gentleman could clarify two points. Can he make it clear that the forthcoming multilateral trade talks with the United States and other countries will include agricultural products generally and not just those agricultural products which lie outside the CAP? I should like to be very clear on that point.
Secondly, will he make clear whether it is the case that, if there is a disagreement between the British Government and the Commission on what is a peripheral area for regional purposes, the British Government can prevail against the Commission only if it gets the unanimous support of all the other members of the Council of Ministers? Is that so?
I have resisted hitherto, and propose to go on resisting, outlining what course of action might be necessary if there were to be the hypothetical dispute to which the right hon. Gentleman refers. I can only say that I do not believe that we are without recourse, but beyond that I will not go.
As regards the question of the range of agricultural products which can be introduced into the multilateral negotiations, I did not wish to make the point that no single product that falls within the common agricultural policy could be introduced into the multilateral talks. I do not think that is so. What I said, and now repeat, was that any product which figures prominently within the CAP would not, I believe, be introduced, and we would certainly not press for it to be introduced if it meant the undermining of the common agricultural policy.