Oral Answers to Questions — Eec Ministerial Meetings

– in the House of Commons at 12:00 am on 16th January 1974.

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3.35 p.m.

Photo of Mr John Davies Mr John Davies , Knutsford

With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the work of the Council of Ministers this week.

The Council of Foreign Ministers met on Monday and Tuesday and was concerned primarily with regional policy and energy policy. Once again it did not prove possible to reach a unanimous conclusion on the Regional Development Fund. Recognising the urgency of reaching a conclusion, it was agreed that there would be a further Council meeting on 30th January to deal with this subject. We shall continue to press vigorously for a satisfactory outcome. Her Majesty's Government attach the greatest importance, as agreed at the Paris Summit, to the establishment of a fund of substantial size and applied to the needy regions of all the Community countries.

The House will be aware that progress on regional policy is linked with the adoption of a second stage of economic and monetary union and a Community energy policy. The Community decided, however, to accept President Nixon's invitation to a meeting of the major oil-consuming countries.

Finally, I should mention that the Council of Agriculture Ministers, meeting on Monday, did not agree to a French proposal that there should be an immediate 10 per cent. increase in the Community guide price for beef and a ban on imports from third countries.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I thank the right hon. Gentleman for that statement. May I ask whether he is aware that the Opposition are particularly pleased that the Government have accepted President Nixon's invitation to the special conference of oil-consuming countries, because we believe that that is the right forum in which this very important matter, which affects far more countries than those involved in Western Europe, should be discussed? We are also pleased that we have not on this occasion waited, I think often in vain, to speak with one voice in Europe, but have accepted the invitation ourselves as a separate country free and able to speak for Britain at this most important conference.

May I ask the Minister to confirm that the British and French Governments have now more or less abandoned the attempt to form a short-term EEC oil energy policy in favour of unilateral deals of the kind that France has recently made with Saudi Arabia?

Can the right hon. Gentleman say what discussion he has had inside the EEC on the most important indirect effects of the vast increase in oil prices? In particular, has there been any serious discussion of balance of payments and currency implications and the many other matters involved?

May I ask whether, in the context of such discussions, the Minister has drawn the attention of his Community colleagues to the special difficulties of this country, facing, as it does, not only the worst balance of payments in our history in 1973 but a still more gruesome prospect in 1974, even before the new burden of oil prices is taken into account? Did the Minister in that context raise again the whole question of Article 108 and the possible derogations from the terms of the Treaty that that opens?

Can the Minister throw a little more light on what has gone wrong in the discussions on a common regional policy? It is obvious that this has a linkage with EMU and energy policy, but does the lack of agreement on a common regional policy stem from an unwillingness of the other countries to go forward with a regional fund until there is agreement on other matters, or does it stem from the British Government's not wishing to go forward with some of the other matters before they get a common regional fund?

In any event, in order to get the matter into its proper perspective can the Minister confirm that what is at stake here is that even if the Commission's proposal for a fund are adopted the benefit to Britain, net of our contribution, over the next three years is not likely to be more than £40 million a year, and that that has to be set against a deterioration of more than £1,000 million in our trade with the countries of the Community?

On the question of beef, we are relieved, indeed, to learn that there has been no agreement on a ban into the Community of cheaper non-Community beef. We would like not only to be assured that the Minister turned down proposals to increase Community prices by 10 per cent. at this special meeting but also to have a categorical promise that in April, when the next major review takes place, he will not accept the proposed increase of 10 per cent. in the price of beef and the proposal to ban imported beef and subsidise exports of Community beef to third countries?

Photo of Mr John Davies Mr John Davies , Knutsford

On the first point, I am sure that everyone will be of the same opinion as the right hon. Gentleman, that it will be exceedingly useful to have the meeting in Washington that has been proposed by President Nixon. I think, equally, that the right hon. Gentleman is right in saying that it is valuable for individual countries, particularly our own, to be able to express their own particular problems, as it is obviously for the Community as a whole to do so, and both of those points are now met.

It is not true that we have abandoned the search for a Community energy policy. On the contrary, the Community—and certainly this country—seeks very definitely to pursue the lines of both a short-term and medium-term energy policy. I will come to the problems to which the right hon. Gentleman refers of the linkage with regional policy.

The right hon. Gentleman asked whether matters concerning the economic effects of the problems relating to oil pricing and energy matters generally have been the subject of discussion in the Council of Ministers. Indeed they have. That was already the position last month when the Finance Ministers met at the same time as the Foreign Ministers of the Community. These matters were then discussed in both those Councils, so they have been under discussion already and are still under continuing analysis.

The right hon. Gentleman asked whether the special situation of the United Kingdom in relation to problems facing us in terms of energy have been made known to the Community——

Photo of Mr Peter Shore Mr Peter Shore , Stepney

And the balance of payments.

Photo of Mr John Davies Mr John Davies , Knutsford

The balance of payments is part of the economic assessment, which is indeed part of the Community's work at present. The special position of each member country has been put forward in relation to the information which the Community is collecting on this subject.

The right hon. Gentleman asked particularly about the link between regional policy and the second stage of economic and monetary union and energy policy. I would simply say that it is not quite as he suggests. The truth is that these three items were taken together by the meeting of Heads of Government and of State in Copenhagen on 14th and 15th December and, indeed, recommendations about conclusions being reached on them by the Council of Ministers were made by that conference. It is, therefore, from that point that they have been linked.

But the right hon. Gentleman would be wrong in suggesting that there is some kind of reserve put forward by any members of the Community about the failure to move forward in energy policy as a factor in their consideration of regional policy. Quite the contrary. Even if they have very different views on what it should contain, all parties agree that regional policy should be settled urgently. That is why a further meeting of the Council of Ministers has been called for 30th January.

On the question of the net benefit of regional policy, the great advantage from the point of view of the Community as a whole and particularly of this country of instituting this policy is not confined only to the first three years, as the right hon. Gentleman knows full well. The whole object of this operation is that it should be a growing operation with a growing fund and a bigger and bigger effect on the disparities which exist in the Community. It would be both misleading and a matter of ill judgment simply to confine one's analysis and assessment of it to the first three years.

My right hon. Friend the Minister of Agriculture has been listening carefully to what has been said about beef. But it is as yet not possible to know precisely what the Commission will put forward in its suggestions as to the consideration by Agriculture Ministers of prices and allied matters later this spring.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

Is my right hon. Friend aware that there will be general satisfaction with the way in which British Ministers have stood up for our interests, both in the matter of the price of beef and on regional policy? On the question of beef, however, will my right hon. Friend give an assurance that the walk out of the French Minister will in no way affect the early announcement and implementation of our own agricultural price review award?

Photo of Mr John Davies Mr John Davies , Knutsford

Yes, I can reassure my right hon. Friend on that matter. Our price review and like matters are not at all involved in the particular considerations which affected this Council meeting, or the failure to accept the proposals put to it this week.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness

Is the Minister aware that in his response to the question put by the right hon. Member for Stepney (Mr. Shore) about the relationship between energy and regional policy—which is the same view that he took the last time he made a statement—he is running against all the views which are generally being expressed throughout Europe—that the attitude that the Germans have adopted is certainly related to the reluctance on the part of the British Government to pursue a common energy policy?

Secondly, will the right hon. Gentleman give some indication of what the difference, in effect, would be, for this country as between the German proposals and the Commission's proposals? As I understand it, the dividing line would be in the north-east of England, and Scotland and Wales would be relatively unaffected both ways.

Finally, may I urge the right hon. Gentleman not to follow the urgings of the right hon. Member for Stepney and to bear in mind that if Britain pursues a Gaullist attitude in Europe, it may appear to be a safeguarding of our interests but it would be to our detriment in the long term.

Photo of Mr John Davies Mr John Davies , Knutsford

On the first point, I must reiterate what I have already said, that the attitude of mind of the German representatives to the regional policy is, on their own statements in the Council, entirely linked with their very real anxieties about economic developments in the Community as a whole, and particularly in their country, and it is not linked in any sense with a feeling of complaint or with some ostensible reluctance. It was certainly not so in all the discussions which have proceeded on the subject of energy.

German proposals on the appropriate form of regional policy are not, again, quite as the hon. Gentleman supposes. They have the effect of restricting the size of the fund, more, perhaps, than its coverage. The restriction of the size of the fund would, in the Government's view, not be a good feature. Even if it had the effect of procuring more or less the same net effect in terms of the regions to be helped, it would create a poor base upon which to argue for the growth of the fund in future years. It is here that the essential difference lies.

Photo of Mr Enoch Powell Mr Enoch Powell , Wolverhampton South West

What is it that compels this country to be seen haggling in public and soliciting from the taxpayers of other countries aid for the regions of this country which are the responsibility of this nation and of this House? What has happened to our self-respect?

Photo of Mr John Davies Mr John Davies , Knutsford

I would be sorry if I felt that I was undermining my self-respect in terms of the action which is currently being taken to form a regional policy. My right hon. Friend seems to forget—I know that he accepts this not at all——

Photo of Mr John Davies Mr John Davies , Knutsford

—that if it is the purpose to try to achieve further solidarity in Europe, economically and in other forms, it is absolutely essential that there should be an elimination of the grave disparities that exist.

Photo of Mrs Margo MacDonald Mrs Margo MacDonald , Glasgow Govan

Why is the Minister so enthusiastic about haggling after development aid for the regions of the United Kingdom, including the country of Scotland, when it was admitted in a Government publication today that the system of regional aid which has been operated by successive Governments from this House has been a failure? The publication says that it has been pursued with more enthusiasm than success.

Photo of Mr John Davies Mr John Davies , Knutsford

Unfortunately, I am not aware of the document to which the hon. Lady referred. All that I can say is that the message that I get from my visits to the regions of this country is quite the reverse from what was said by the hon. Lady.

Photo of Mr Christopher Tugendhat Mr Christopher Tugendhat , Cities of London and Westminster

The Minister mentioned the Government's acceptance of the invitation of the United States Government to the energy conference in Washington. Will he give his view of the French proposal for a sort of counter-conference and say whether he regards it as a good idea or not? Will he give some idea of the Government's thinking on a common energy policy? Much as one likes to see British diplomats actively engaged in the Middle East, it would seem at the moment as if European countries are doing their best to bid up the price of oil and to bid down the price of their manufactured goods for export to the oil-producing States.

Photo of Mr John Davies Mr John Davies , Knutsford

On the first point, I think there is a strong feeling that there may be a need, particularly in the Community, for some assessment of the narrower interests of the Community compared with world-wide interest in relation to energy problems. Therefore, it is not thought that a narrower meeting subsequent to the Washington meeting could do anything but help in the subsequent discussions which might take place.

As for the energy policy, it is clear that the short-term endeavour is to try to maximise the supply of oil to Europe. This must be the case, because Europe suffers from a shortage of oil, and every effort, both individually and collectively, must be directed towards a solution. In the longer term there are many common interests between the European Community and the Arab oil producers, and these are worth exploiting and developing.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Will the Minister not accept that unilateral oil deals could be extremely dangerous for this country bearing in mind the enormous support we are likely to need with the substantial balance of payments deficit we shall be having next year? Will he therefore tell the House that he will rule out such unilateral deals?

Photo of Mr John Davies Mr John Davies , Knutsford

I stand by what I said earlier. The need at the moment is to use all reasonable means to ensure the greatest supply of oil to a continent which is currently suffering gravely through a shortage of it. Therefore, the Government and, indeed, the Community itself would be ill advised not to explore every means of maximising supply.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

The Minister said that Britain had always argued for a regional fund of a substantial size. Will he say, in view of his experiences both in December and last week, whether he is very optimistic now about getting a fund of substantial size? In view of the grave economic and financial difficulties in which the Government find themselves, will he make it clear that we cannot continue the outflow to the EEC until we get a regional policy which reimburses some of that outflow?

Photo of Mr John Davies Mr John Davies , Knutsford

The answer to the first part is that I still firmly believe that we shall obtain a regional fund of a substantial size, of a considerable period and of an adequate coverage. The answer to the first part of the question therefore answers the second part, too.

Photo of Mr John Biggs-Davison Mr John Biggs-Davison , Chigwell

Is there not a tendency when dealing with the regional fund in the Community and in the media to speak about "Great Britain" and "Ireland" as two possible recipients of regional aid? May we be clear that, in spite of the necessity of regional planning transcending the border, there is to be no erosion of political sovereignty in the minds of anyone in Europe and on either side of the border?

Photo of Mr John Davies Mr John Davies , Knutsford

I do not believe that there is. I believe that there is no doubt at all that Northern Ireland constitutes a region of the United Kingdom and is, therefore, part and parcel of the United Kingdom's interests.

Photo of Mr Andrew Faulds Mr Andrew Faulds , Smethwick

Will the right hon. Gentleman welcome the Kissinger initiative with perhaps a little more restraint and reservation? Does he not understand that the oil-importing countries are no longer able, either through the multinational companies or in any other way, to demand what they want of the oil-exporting countries? Is he not also aware that much more equitable arrangements will have to be arrived at, including possibly market terms and such things, with those countries which hold the supplies that we need?

Photo of Mr John Davies Mr John Davies , Knutsford

I do not think there is anything in the initiative taken by President Nixon to call this meeting which implies that he wishes to constitute a kind of anti-body to the producers. That is not my understanding at all, nor is it implied in the invitation which has come our way.

Photo of Mr Charles Morris Mr Charles Morris , Manchester Openshaw

Has the right hon. Gentleman noted the widespread Press speculation that the proposals now being considered by the Council of Ministers envisage a reduction in the areas in this country which are likely to receive aid under the proposals? Will he confirm that the North-West will continue to be included for regional aid, or is it proposed that it should be excluded?

Photo of Mr John Davies Mr John Davies , Knutsford

I hope that the hon. Member will find my reply on this point satisfactory. The Government intend to adhere most firmly to the existing map drawn by the Commission which, as the hon. Member knows, embraces the areas to which he refers.

Photo of Mr John Wilkinson Mr John Wilkinson , Bradford West

Will my right hon. Friend repeat his reassurance that in this multilateral energy conference no inhibition will be placed by the United States upon the European requirement for oil imports? The United States is much more self-sufficient in energy, particularly oil, than we are, and we should welcome the initiatives being made by this country and the French to improve relationships and trade with such Islamic oil-producing countries as Iran and Saudi Arabia.

Photo of Mr John Davies Mr John Davies , Knutsford

I do not think there is any question of the meeting to which the Community and other countries have been invited being one which would put an impediment in the way of importing countries such as ourselves and France doing all they can to secure future oil supplies.

Photo of Mr Neil McBride Mr Neil McBride , Swansea East

Is it not the case that West Germany has said that on the regional fund it will not buy solidarity at a price, and that, with France, West Germany is opposed to paying the contributions which would be required for the fund to reach the size the British Government hope to see? Will the right hon. Gentleman now admit that there has been an attendant sense of failure on the Government's effort to balance the payment we have contracted to make to the Common Market with grants from this fund? In the peripheral area of Wales that I represent there is a strong feeling that the Government have blatantly failed.

Photo of Mr John Davies Mr John Davies , Knutsford

The hon. Member is completely wrong in his last assertion. He is also wrong in his first assertion. I am not revealing any confidences, because it has been publicly stated, but France has clearly backed the fund which the Commission proposed to the Council of Ministers.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Will the right hon. Gentleman assure the House that the Government are not in danger of developing an attitude that was attributed to the French, rightly or wrongly, of being completely selfish? In all these negotiations will he remember that those who supported Britain's entry into Europe did so because we wanted to make a contribution to the unity of Europe as well as play a large part in it? Will he bear in mind that it is a question not just of what we get out of it but of what we put into it? Will he ensure that this is the prevailing attitude—the attitude that was enunciated by the Labour Government between 1967 and the 1970 General Election, during which period we were clearly for a united Europe? Will he say that that policy is to continue?

Photo of Mr John Davies Mr John Davies , Knutsford

I think I can reassure the hon. Member absolutely that the Government's endeavour is to do both things—to look after the interests of this country very clearly and to ensure that in doing so we further the cause of European solidarity and of the European Community as a whole. I believe we have succeeded in doing so.

Photo of Mr Thomas Urwin Mr Thomas Urwin , Houghton-le-Spring

Does the right hon. Gentleman realise that there is widespread disillusionment in this country among even the most ardent supporters of British integration with Europe on various aspects of European policy and not least over the issue of the regional fund, as evidenced by comments by one of my hon. Friends a few moments ago?

Bearing in mind the strength of German opposition to a £1,250 million regional fund, as evidenced by the Press reports, and accepting that there is some possibility of the British Government capitulating to some extent to the arguments of the West Germans, to what extent do the Government set their sights on a figure below that, a figure at which the right hon. Gentleman can settle with honour?

Photo of Mr John Davies Mr John Davies , Knutsford

I would certainly not wish both to be a negotiator in the Council and also to operate on a similar basis across the Floor of the House. It would not help the negotiations very much. I can assure the hon. Gentleman that it is the Government's absolute intention to stick to their purpose in this matter in the sense of obtaining a substantial fund, which has substantial benefits for this country and which runs for a reasonable period.

Photo of Mr John Davies Mr John Davies , Knutsford

The hon. Gentleman is asking me to state precisely what I have just said I would hesitate to say.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

May I press my right hon. Friend further on the evidence of the effectiveness of our own and the Community's regional policies to date in diminishing disparities in prosperity between different regions? Is it not fairly clear that there is not much evidence of any improvement in this respect on the basis of these policies to date? Why do we imagine that a bigger and better fund will do what we have so far been unable to achieve at Community or national level?

Photo of Mr John Davies Mr John Davies , Knutsford

I disagree wholeheartedly with that observation. I have been involved for many years in Government and outside Government with regional problems and in the past three years there has been a major success in certain areas in redressing the disparities which existed.

Photo of Mr Michael English Mr Michael English , Nottingham West

The right hon. Gentleman is an honourable man. I ask him, therefore, what steps he proposes to take to deal with corruption in the institutions of the Community. In particular, does he agree that our own delegation could create a good image for Britain throughout Europe by refusing to accept travel allowances which are greater than Members' travelling costs?

Photo of Mr John Davies Mr John Davies , Knutsford

This is outside the framework of my statement, but it is fair to say that, in both the Parliament and the Council of Ministers, representatives of this country have consistently proved to be front runners in the matter of greater control. In the parliamentary delegation one of the hon. Members of this House has proved to be one of the most valuable people in instituting firmer control by the European Parliament over expenditure. This already goes some way along the road towards firmer control.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

What discussions have taken place on the rather nasty way in which the representatives of the different powers of Western Europe are now trying to pile on our most sophisticated weaponry in return for oil? Does the Minister realise that the Persians are now relatively more powerful in terms of military capacities than in the days of Darius and Xerxes? Will he instruct his hon. Friend at the Foreign Office, who will probably be answering a debate on the subject at 5.30 in the morning, to state what the Government think they are up to in trying to pile on most sophisticated weaponry in this way? The action is most dangerous and doubtful. That weaponry would be much less valuable than the technical co-operation we could offer.

Photo of Mr John Davies Mr John Davies , Knutsford

I see that the hon. Gentleman is very anxious that the range of activity in the Community should be substantially extended. That is perhaps a wise thing to suggest. No doubt, whoever responds to the debate will be prepared to deal with the marathon characteristics of the hon. Gentleman's question.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

Following the point made by my hon. Friend the Member for Chigwell (Mr. Biggs-Davison), will my right hon. Friend clarify whether money made available from the regional fund to Northern Ireland will go directly to the Executive in Northern Ireland and not be made available through the Council of Ireland?

Photo of Mr John Davies Mr John Davies , Knutsford

I do not think that I can give that precise assurance.

Photo of Mr Leslie Spriggs Mr Leslie Spriggs , St Helens

Can the right hon. Gentleman give details of the balance of payment figures between the EEC member countries and the United Kingdom up to the present?

Photo of Mr John Davies Mr John Davies , Knutsford

If the hon. Gentleman will allow me, I shall communicate these figures to him separately. I am sure that he will find the figures more accurate if I give them to him in detail in this way.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

Is the right hon. Gentleman aware that each succeeding report which he brings from Europe becomes more disturbing not only to the House but to the people of this country? Is he further aware that the suggestion that he is pressing for a regional policy is a piece of window dressing and an attempt at deception on those of us in the regions, because inherent in the Community policy there is no possibility of giving the regions the help they need? Is it not time the charade in Europe was over and that we seriously considered withdrawal? The Minister should come back to the House for a full-dress debate on this matter as near to the date of the next election as possible.

Photo of Mr John Davies Mr John Davies , Knutsford

I do not agree with any of the hon. Gentleman's observations.

Photo of Mr Robert Maclennan Mr Robert Maclennan Shadow Spokesperson (Defence)

Will the right hon. Gentleman reject the English nationalism of the right hon. Member for Wolver-hampton, South-West (Mr. Powell) and the Scottish nationalism of the hon. Member for Glasgow, Govan (Mrs. MacDonald), which persuades them that it is in some way demeaning to seek to develop a common approach to the common problems of Europe? Will the right hon. Gentleman give an undertaking that he will persist in seeking a Community approach to these international questions of regional development? Regarding the regional fund, can he say whether the way forward in the discussions is likely to be provided by the two-tier approach which has already been discussed, whereby all member countries of the Community are likely to receive some benefit but those which are most needy will get substantially greater benefit? Are the Government already considering applications from local authorities for assistance from the regional fund when it is set up? What arrangements are being made within the Government to process these applications?

Photo of Mr John Davies Mr John Davies , Knutsford

The two-tier arrangement to which the hon. Gentleman refers is one of many formulae proposed to give a reasonable spread of the fund. It has certain advantages which are well worth considering. The formula which can be adopted to distribute the fund does not present the same difficulties as those connected with the constitution of a fund of adequate size and sufficient duration. These matters are presenting the greatest difficulty at present.

Local authorities and other bodies are seeing what proposals they can put before the fund.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

Further to the questions raised by my hon. Friends the Members for West Lothian (Mr. Dalyell) and Hey-wood and Royton (Mr. Joel Barnett), can the right hon. Gentleman tell the House whether in the discussions on Community response to the oil crisis there was any consideration of unilateral oil-for-arms or oil-for-commodity deals by member States and, in particular, whether the Franco-Saudi deal was discussed? If not, what is the purpose of having a Community of any kind, if matters of this kind and magnitude are not discussed among the members?

Will the right hon. Gentleman come back to the question of the British economy? He must have read the speech by the Governor of the Bank of England, and he must be aware of the present standing of the pound. Is he telling us that at a two-day meeting of the EEC he, or his right hon. Friend the Foreign and Commonwealth Secretary, did not take the opportunity of discussing the British economic situation so as to give the Community countries a warning of the very strong measures that a British Government—if not the present Government—will soon have to take?

Photo of Mr John Davies Mr John Davies , Knutsford

The right hon. Gentleman is very contradictory. I have told him clearly that it is the Community's intention to formulate an energy policy. The right hon. Gentleman asked why it has not done so. The truth is that it has not yet succeeded. The right hon. Gentleman then asked why we had not clearly put forward the considerations affecting this country's economy. I have already answered him. Those matters have been put forward and discussed in the Community. What more does the right hon. Gentleman wish?

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

On a point of order. Owing to the unsatisfactory nature of my right hon. Friend's reply——

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Order. It was a statement.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

—I beg to give notice that I will raise the matter on the Adjournment.