The Council had a first exchange of views on the Commission's paper on the budget solution for 1983 and later. It was agreed that the committee of permanent representatives should get to work on this immediately and report back to the Council at its January meeting.
We discussed East-West trade issues and agreed that we should carry forward the studies approved in the recent Washington talks. Our objective is to improve our cooperation in this field and to achieve a greater cohesion in our approach to East-West trade.
The Council also discussed developments in the final preparations for the GATT ministerial meeting. The Community will continue to press for improvements in certain areas and the Council will meet again in Geneva if necessary. My hon. and learned Friend the Minister for Trade, who was present at the Council, is now in Geneva for the GATT meeting.
The Council agreed in principle on the details of the Community's generalised scheme of preferences for 1983. Ministers noted the progress made in the past month in the bilateral textile negotiations under the multi-fibre arrangement with the Association of South-East Asian Nations and Brazil. The Council also agreed that the Commission should proceed with negotiations with the three dominant suppliers—Hong Kong, South Korea and Macao—making full use as necessary of the flexibility available to them within the global ceilings.
Ministers discussed the external steel regime for 1983. They agreed that the Commission should open negotiations on voluntary restraint arrangements with main third country suppliers of steel to the Community, on the basis of a cutback of 12½ per cent. in import volume in relation to the 1980 base year.
We raised the problem of the trading imbalance under the EC-Spain agreement and asked for a Commission report with proposals for action on Spanish implementation of the agreement, and on the unequal and unjustifiable tariff imbalance in some sensitive areas.
Ministers agreed a special aid programme for Central America. They approved a new management regulation designed to improve the procedures governing the Community's food aid programme. Discussions will continue on other subjects, including the Community's research programme on nuclear safety, the European Parliament's proposals for a uniform electoral system, and a Commission memorandum on the follow-up to the second Lomé convention.
A ministerial conference with the Portuguese in the margins of the Council reviewed progress in the accession negotiations.
Ministers also met in the framework of political cooperation and discussed a number of foreign policy issues, including East-West relations and the Middle East. It was agreed that the Danish Foreign Minister should visit Israel shortly in order to put the Ten's views on the current situation. As applicant members of the Community the Spanish and Portuguese Foreign Ministers were present for part of the meeting.
Mr. Eric S. Heifer:
One of the problems with the Secretary of State's statements is that he reveals very little to the House of Commons. I am sure that the right hon. Gentleman will agree with me that one has to read the newspapers to glean some information about what was actually discussed.
The right hon. Gentleman referred to the budget and to the budget solution for 1983 and later. The right hon. Gentleman does not say that what has happened once again is that the Government have retreated on the budget question and that we are about to have further tortuous discussions.
I see the right hon. Gentleman shaking his head. If the Government have not retreated, perhaps they will explain precisely what has happened, because according to the Financial Times:
Mr. Francis Pym, the British Foreign Secretary, made a forlorn attempt to persuade the Ten to set next March as a target date for agreement.
We are entitled to know what happened on the budget question.
The right hon. Gentleman referred to East-West trade issues. What exactly is the position? What about the relationship between France and the Soviet Union with regard to butter? The Foreign Secretary has not said what exactly is happening in that direction.
The right hon. Gentleman referred to steel. The Opposition would approve, quite rightly, of a cutback of 12½ per cent. in import volume in relation to the 1980 base year. We would want that to be a little higher, but what about steel coming from the Common Market countries into Britian? What about the increases of imports to Britain of steel from the EEC? Nothing was said in the statement about that. We are entitled to know precisely what is happening.
No details were given about the aid programme, yet it is one of the most important questions before us.
The electoral system which is being proposed—[HON. MEMBERS: "Ah."] Exactly—what was the Government's attitude to that? Are they in favour of abandoning our present method of voting or will they go along with the proposals of the European Assembly? The Opposition are totally opposed to any change in the system of election.
With regard to the Middle East, is the right hon. Gentleman aware that we welcome the fact that the President of the Council is to go to Israel to put pressure on the Israeli Government to stop further settlements on the West Bank? The Opposition believe that not only should the Israeli State have secure and peaceful borders but, equally, the Palestinian people have a right to a State of their own and there cannot be a solution to the Middle East problem until that comes about. Therefore, we would welcome maximum pressure being applied to the Israelis and to the Palestinians, and we welcome the fact that some efforts are being made in that direction.
Is the right hon. Gentleman satisfied that these continual visits by Minister after Minister to EC countries to talk to one another get us anywhere? Is it not time that we began seriously to consider getting out of the Common Market and solving the problem in a different way?
The answer to the last question by the hon. Member for Liverpool, Walton (Mr. Heffer) is "No, Sir." The hon. Gentleman said that I had revealed little. I thought that in a reasonable time I had covered most of the important points on the Council agenda. If I had digressed in detail on each of the subjects I should have had to make a very long statement and I doubt whether the House would have welcomed that. I have done my best.
The East-West trade position is exactly as I have described it. In the interests of time, I shall not re-read what I said in my statement.
The hon. Member for Walton said that I had retreated on the budget. That is nonsense. The paper produced by the Commission for the 1983 and later budgets was issued only last week. We decided that we should remit it immediately and return to the subject in January. That seems a reasonable date.
The hon. Gentleman asked about France and butter. I did not mention that matter because we did not discuss it. We did discuss the second Lomé convention, and what will follow, and the electoral system. No decisions were taken and discussions are continuing on both those matters. I cannot say when a decision will be taken.
I am glad that the hon. Gentleman welcomed the visit by the President of the Council to Israel. He certainly will take the line that I described in answers this afternoon, which is in line with much of what the hon. Member for Walton said. I think that that will be helpful. The policy of the Ten towards the Middle East has been made clear today and on earlier occasions. It is not for us to settle the problem, but we want to make the maximum contribution to its solution and to the attainment of peace.
I have tried to cover the wide range of issues that we dealt with in two days. If the House requires a great deal more time for descriptions of every aspect of the discussions it will have to make some new arrangements. I doubt whether that would be acceptable.
Has my right hon. Friend seen reports in today's press which suggest that the European Community, although the largest trading bloc in the world, may not succeed in making an effective stand at the GATT negotiations in favour of the open trading system? Since Britain stands to gain more than any other country in the world from the maintenance of that system and the avoidance of a tariff war, does it not demonstrate more clearly than anything the need for more effective procedures for consultation and action within the Community?.
We have enough procedures and institutions to cope with the problems. We certainly regard the GATT meeting as being extremely important, as does the Community. The paper setting out the guidelines which the Minister of State has taken with him are available to the House. I am certain that the ministerial meeting is important as a collective demonstration of political will to maintain and strengthen the open trading system, particularly at a time of recession. In the United Kingdom we wish to press for a fairer balance in access to markets where our exporters face unnecessary barriers.
Did the right hon. Gentleman discuss the part that Europe should play in expanding the world economy? Will that view be expressed at the GATT talks today?
Is the right hon. Gentleman still insisting on the full implementation of the original negotiating mandates on the multi-fibre arrangement? Did the Council of Ministers consider alternative trading arrangements if the negotiations should break down before the end of the year? Is the right hon. Gentleman insisting that firm alternative arrangements are reported to the December meeting of the Council of Ministers—the last meeting before the arrangements have to be concluded?
I am aware of the hon. Gentleman's interest. Progress has been made and we hope that a satisfactory solution can be found. I cannot give an undertaking that it will be, but considerable time was spent on the subject. It remains a high priority in our approach to the discussions.
Does my right hon. Friend agree that in the present difficult world trading conditions the wide range of topics that were discussed shows that it would be wrong to say that massive decisions can be arrived at and put into effective operation quickly?
I think that my hon. Friend refers to the discussions on political co-operation over a remarkably wide range of issues on which there is a common position in the Community and which we regularly express in statements. We did not do that on this occasion because it appeared to be unnecessary. No special issue required a declaration. I can assure my hon. Friend that there was a remarkable unanimity in our approach to the world's problems.
Is not the notion of open trading pure mythology and does not the Government's support for the multi-fibre negotiations demonstrate that? May we have an assurance that it was made clear at the meeting that if the MFA negotiations fail and we have to come out, emergency procedures will be implemented? We need that assurance, because the textile industry in West Yorkshire and elsewhere is anxious about the outcome of the negotiations. Is the right hon. Gentleman aware that over 1,000 jobs in the textile industry in my constituency have been lost in the last three years? Does that not reflect what is happening elsewhere?
Open trading is no mythology. It is a major contributory factor to the success, development and growth of the world economy in the past 30 years. It is being challenged now because of the world recession. It would be a mistake to allow the protectionist view to gain the upper hand, because that would turn an already serious recession into a calamity. I do not want to contemplate failure of the MFA negotiations. Thought has been, and is being given, to what happens if that occurs, but let us not think in those terms.
A uniform electoral system has been mentioned. Does the right hon. Gentleman's statement mean that the working group to which the subject was remitted on 26 April has completed its work? Did it make any recommendations? Like the hon. Member for Liverpool, Walton (Mr. Heffer), although for different reasons, I should be interested to learn the Government's view.
The working group has not completed its considerations. It has discovered a considerable number of problems which are by no means confined to any view that the United Kingdom may have expressed. There are a great many differences among the countries of Europe, and even among the countries that believe in a system of proportional representation. The approaches to the systems vary considerably. The working group has identified the differences. Many problems must be ironed out before any conclusion is likely.
In spite of the fulminations of the Opposition spokesman, the hon. Member for Liverpool, Walton (Mr. Heffer), supported by a few of my hon. Friends, does my right hon. Friend accept that many people view with incredulity the prospect of another election in Europe in 1985 other than on a common basis, given that Members of the European Parliament are drawn from all European nations and are regarded as equal?
I have no difficulty in contemplating an election to the European Parliament in 1985 on different bases. It is legitimate to argue that there would be advantage in having the same system. That is a matter for discussion and debate. There are many problems involved in achieving that objective—if one thinks that it is a worthwhile objective. More work has to be done before all the problems can be ironed out.
Arising out of the discussions on nuclear safety, what did the Foreign Secretary say to his Italian colleagues who are interested for ethnic reasons—because of the number of Milanese and Neapolitan families involved in the loss of life—about the sinking by the nuclear submarine "Conqueror" of the "Belgrano"? He could say to them, could he not, that he was in New York when the order was given on Sunday 2 May, about to dine with Perez de Cuellar, that he has a clean sheet, that he was not present at the war cabinet, and that he did not know about the order to sink the ship?
I can say that our discussions during the past few days in relation to nuclear safety referred to the Super Sara test programme, which is outwith the scope of the hon. Gentleman's question.
The Community decided to have a special additional aid programme for the benefit of Honduras, the Dominican Republic and Costa Rica. Nicaragua already receives aid and will receive some additional aid as a result of the decisions taken this week, but out of money already allocated for aid. It was a special programme confined to the three countries that I mentioned.
Among the matters that the Secretary of State mentioned but did not name, what was the discussion about the Genscher-Colombo proposals? What stage have those proposals reached in the Council? Does the Secretary of State agree that, as they are proposals towards European union, the Government have no mandate for such a move and must, on principle, be opposed to anything that emerges at the end of discussions?
Is my right hon. Friend aware that, with reference to my supplementary question and his answer at Question Time earlier today, the last thing that I intended to convey was criticism of Lord Carrington? I am dismayed that the House might have believed that to be my purpose. Can my right hon. Friend give us further details of the follow-up discussion on the second Lomé convention? Is there a timetable of further developments?
We had only a brief discussion on the subject on this occasion and decided to return to it either in December or, as is more likely, in January. My hon. Friend is conversant with the details. Little progress was made on this occasion.
Is the Secretary of State aware that I and many other people agree that his original statement concealed much more than it revealed? In future, instead of having the agenda of the meeting, could we have the minutes? Did the Council discuss the implications of the bully-boy tactics of nine member States against Denmark over fishing and the implications of force being used by a member State against another, and what were the results?
We did not discuss the common fisheries policy, but my right hon. Friend the Minister of State answered a question on the subject earlier today and the position is as he described it. As to the hon. Gentleman's first question, when the Community comes to certain conclusions, the relevant documents are available to the House. They are scrutinised, investigated and debated in the House, which is the best procedure.
Much more than that will be necessary to achieve success in the peace-making process. First, Israel must agree to be positive and constructive in relation to the Reagan plan. Many other things must happen.
Did the Council discuss the evidence submitted at the international hearing in Bonn last week to the effect that forced labour is being used to construct the Siberian pipeline—including evidence from those who have worked on the pipeline? If the Council did not discuss that matter, why is Europe continuing to turn a blind eye to the position? Will the matter be on the agenda next month?
The Secretary of State referred to the desirability of free trade, but does he not accept that a world steel trade war has been waged for many months? Will he ensure that our European partners recognise that Britain will take urgent action, as they would take in our case? I would illustrate that by saying that at 3.27 pm I raised the matter with the Minister of State. At 3.30 pm I received a telephone call to tell me that another private steel works is going down the drain.
The Government and the whole House are deeply worried about the steel industry. There has been a vast over-capacity. The British Steel Corporation has taken some tough decisions, as a result of which many people have suffered. The same is happening in the United States of America and in Europe. The problem and its consequences are very much in Ministers' minds and we shall try to deal with it as best we can.
Given that the considerable benefits of Community membership are equally available to all countries within the Community and given that we provide a market for expensive European foodstuffs and £5,000 million net of European manufactured goods, is it not the case that it makes no sense or justice that we should be significant net contributors to the European budget? Will my right hon. Friend make it abundantly clear to the other Ministers on the Council that in future we shall not make a significant contribution to the budget equal to or anywhere near the level that we have made during the past three years? Will he also ensure that the next agreement on the Community budget will be permanent and that we will not be party to a further temporary agreement?
We have constantly made clear our position on the budget. The Government are prepared to be a modest net contributor to the Community. My hon. Friend may disagree with that, but it is the Government's position and it is fair. When one assesses the consequences and the value of United Kingdom membership of the Community, all the factors must be put on the table. We must include all the factors, such as trade and jobs, as well as the penaltie that arise in some areas, if we are to have a realistic and frank assessment.
I cannot say whether we shall achieve a lasting solution to the budget problem this time, but we must do so by the agreement of 10 countries. Some countries may feel that 1983 is not the time for a lasting solution. However, within a few years, a lasting solution may be achieved if we fail to achieve it now, because then the Community must consider its financial framework. That might provide an opportunity for a permanent settlement. However, we must see how we get on.
In the discussions about East-West relations, did the other Ministers take a rather passive and negative attitude like that of the Secretary of State, who said that he would monitor developments in the Soviet Union—whatever that means—and wait to see whether an initiative comes from the Soviet Union? Has the right hon. Gentleman forgotten that in 1982 alone the Soviet Union put forward many initiatives, including a complete freeze on the development of nuclear weapons, reduction in conventional weapons and suggestions that outer space be declared a zone of peace, that all nuclear weapons be withdrawn from Europe and many others? Does none of the Ministers realise that the survival of Europe is at stake and that all their other plans will disappear unless they get this one right?
What a macabre distortion of what I said and of our policy. I did not use the word "monitor". It was never used in the discussion in Brussels yesterday, which is why I did not use it. I thought that I had described a constructive response to the changes in the Soviet leadership. That is what I intend it to be. I have already had a dialogue with the Foreign Minister in Moscow and we shall continue on that basis, but at the end of the day we must await the response.
I say to the hon. Member for Oldham, East (Mr. Lamond) that the United States of America has made all the running and taken all the initiatives in arms control—
Why is it that, when my right hon. Friend so rightly and ably tells the Council constantly that the British Government are wholly opposed to the export of highly subsidised food to Russia, the volume of such subsidised food is constantly increasing and is now three times more than it was the year before the Russians invaded Afghanistan and five times as much in value? Will it not undermine the determination of people in Britain and Europe to pay taxes to defend ourselves against the Russians if we must also pay taxes to build up the Russians with much subsidised cheap food?
My hon. Friend is immensely wise. Subsidised food formed a significant part of the discussion on East-West trade that has continued for some weeks, in connection with which the sanctions on the oil pipeline contracts were lifted by President Reagan. It seems wrong to trade with the Soviet Union and the East on a basis that subsidises their economies. Although no firm decision has been taken on that matter, that is one of the areas that will be investigated carefully by the countries of NATO with a view to forming a framework for a sound basis of trading with the East.
In the exchange on nuclear matters, was consideration given to the position in the United States? On 9 November a majority of Americans in a referendum came out in favour of a nuclear freeze between the United States and the USSR. As Congress ratified that yesterday, will the Foreign Secretary, when he returns in January, seek to establish an initiative to stop the nonsense and foolishness that, although people can already blow the world to pieces 10 times over, expenditure on armaments is still increasing?
Even if I were contemplating raising the matter that the hon. Gentleman has asked me to raise, there would be no point in doing so in Europe, as the United States is not a member of the Community.
Did the Council of Ministers consider limiting the supply of arms to the world, particularly in the light of the decision by the French to resume supplies of Exocet missiles to Argentina? Is not that a priority on which the EC could take the lead? The Foreign Secretary suggested that the West is taking the lead on arms differences. Is not limiting the supply of arms a priority, so that we can end the mockery of the lives of those who were killed in the Falkland Islands by arms containing components manufactured in this country and supplied to Argentina?
At the beginning of the political cooperation meeting, the Foreign Ministers decide what subjects they will discuss. In the meeting that I have reported to the House we decided to confine ourselves to the significant historical event of the change of leadership in the Soviet Union and what it will mean for East-West relations. We confined our discussions to that —Unterruption.]—I did not understand that interjection. There are plenty of other occasions when arms control can be discussed, and is discussed. Yesterday was not one of them. We confined ourselves to the general matter of the change of leadership. Therefore, we did not address ourselves to the point that the hon. Gentleman has made, but on other occasions we shall do so.
Does the right hon. Gentleman agree that that is a negative approach to the situation that has developed? As there is a new leadership in the Soviet Union, surely it would be a good idea if the Foreign Ministers of the EC countries took positive initiatives. When there is a new leadership one should take positive initiatives. The statements that have been made by the new Soviet President can be interpreted positively. I hoped that the Foreign Ministers would do so.
I think that it is a mistake to repond to an event such as the death of a leader of the Soviet Union by immediately taking an initiative. We said that we would take a constructive approach and explore the possibilities. Of course, one thinks first of the arms control talks. We are taking that constructive approach to see what response will be made. I do not call that an initiative. It is an intelligent approach to an entirely new situation, which I and other Foreign Ministers watch carefully.