With permission, Mr. Speaker, I shall make a statement on the European Council in Copenhagen on 3 and 4 December, which I attended accompanied by my right hon. Friend the Foreign and Commonwealth Secretary.
At the end of the meetings, the Danish Prime Minister issued to the press his summary of the Council's conclusions. I have arranged for a copy of this document to be placed in the Library. In its discussion of the economic and social situation, the European Council agreed upon a number of priority goals, including the reestablishment of economic stability; the continued reduction of interest rates as a means of encouraging productive activity; the creation of more employment opportunities and professional training for young people; and increased international co-operation in monetary and trade policy.
A work programme was approved on four specific matters: measures to reinforce the internal market; proposals in the field of research, innovation and energy; a new instalment of the new Community instrument amounting to some £1¾ billion; and urgent consideration to be given to proposals for training young people and reorganising working time.
The council re-affirmed its political commitment to the enlargement of the Community by the accession of Spain and Portugal and asked the Foreign Affairs Council and the Agriculture Council to press ahead with the necessary preparatory work. I stressed that the Community must take quick and effective action to ensure more equal access in our trade with Spain.
There was some discussion about the implications of enlargement for the ceiling on own resources. We take the view that the Community's present own resources should be sufficient. The essential requirement is effective control over the rate of growth of agricultural expenditure.
The council expressed its determination to pursue a constructive dialogue with the United States. It noted with satisfaction the agreement reached on steel and the United States' President's decision to lift the sanctions imposed in connection with the Siberian pipeline.
The council asked the Foreign Affairs Council at its next session in December to take decisions on the various ways and means of improving commercial relations between Japan and the Community.
It was confirmed that nine member States were prepared to accept the Commission's proposals for a revised common fisheries policy. Denmark was not able to do so. The Danish Prime Minister said that he needed some further clarification, which I understood to refer to matters outside the package now proposed. It is my hope and expectation that agreement will be reached at the next meeting of the Fisheries Council on 21 December.
The council was informed that the Foreign Affairs Council had set work in hand on the Commission's recent communication about the solution to the British budget problem for 1983 and later. I emphasised that, unless a decision was reached before March, I should have to raise the matter at the next European Council.
As is usual, the European Council also considered international political questions. The council agreed that the basis for our relations with the Soviet Union should continue to be firmness and dialogue. We stated our readiness to respond positively to any constructive moves which the new leadership in Moscow may make, and we looked for these in particular at the Madrid conference on security and co-operation in Europe and in relation to Afghanistan.
The council agreed to keep developments in Poland under careful scrutiny so as to be able to judge the real significance of the measures which appear to be under consideration in Warsaw.
On the Middle East, the council called upon the parties to seize the political opportunity created in September by President Reagan's initiative and the Arab summit in Fez, and urged that all Israeli and other foreign forces be withdrawn from Lebanon without further delay.
On international economic matters, the council stressed that the overriding priority for the Community's economic and commercial relations with other industrialised countries was a strengthening of international co-operation in all major areas to counteract recession, with particular emphasis on a return to a stable monetary, financial and trade situation. In this connection, the council stated the readiness of member States to work for a substantial increase of IMF quotas and their determination to contribute to an early decision to that effect.
I shall put several questions on specific matters before turning to the main parts of the Prime Minister's statement.
I am sure that the Prime Minister understands that there must be a further debate in the House on the fisheries issue, before it is concluded. Perhaps she recalls that during the general election she said:
Our waters contain more fish than the rest of the Community put together … Britain must have a very substantial share of the total allowable catch".
Does the right hon. Lady really think that that has been achieved? Will she give an undertaking that, before any further step is taken, the House will have a chance to state its view? No progress seems to have been made at the meeting on the budget. Does the right hon. Lady really believe that progress will be made at the next meeting, and how much progress does she expect?
The Prime Minister referred to steel only in the context of the agreement made with the United States of America. Surely there should have been proper discussion at the summit meeting of the appalling state of the steel industry, especially as the British steel industry has had to accept bigger cuts than most other countries in Europe. Surely the right hon. Lady should have made a statement on behalf of the British steel industry during those discussions? Perhaps she will give us an account of what happened.
The Prime Minister did not say much about the CAP. Has any progress whatever been made towards the Government's objectives? At such a meeting, important international issues are bound to arise. The right hon. Lady referred to President Reagan's initiative on the Middle East. We all wish to see that initiative succeed, but what will be the next step in that direction?
The Prime Minister did not offer much comfort about the economic situation. It may be very difficult for the Government to urge the other countries to take action on economic matters and unemployment when unemployment in Britain is worse than in other countries, when our bankruptcies are more numerous and when our economy is in a considerably more parlous state than that of most of the other countries. Naturally, they are unlikely to listen to any appeal from the Prime Minister. However, the Prime Minister surely should have sought to secure a meeting in Europe with some of the other countries so that broader and more international measures could be planned for dealing with the deepening economic crisis. It certainly is a crisis. The Prime Minister has returned from the meeting without any proposals to deal with rising mass unemployment in Europe and throughout the world.
We welcome what the Prime Minister said about some of the international issues, such as Poland and Madrid. However, she had no comfort to offer about the situation in the world as a whole. Even at that conference, should there not have been a discussion on disarmament? Will not the right hon. Lady admit that the real danger facing the world is not the failure to carry out disarmament agreements but the possibility that we are engaged in a fresh re-armament drive?
If President Reagan's proposal, which he is having great difficulty in getting through Congress, for the new MX missile programme were accepted, that could bring, as a major response, a similar programme in the Soviet Union. If those programmes continue, far from our having any hope of securing multilateral agreement, the major multilateral agreement— SALT 2—might as well be torn up. If we tear up one agreement, it will be much more difficult to obtain new agreements in the future.
The right hon. Lady taunts us and says that we are not interested in multilateral agreements, but she should have fought to sustain the SALT 2 agreement rather than supported President Reagan in abandoning it. She must use her influence, even at this late stage, to try to stop the unilateral re-armament drive that threatens not only world peace but world economic well-being.
I shall try briefly to reply to the right hon. Gentleman's seven points. For nine member States, the negotiations on fishing are concluded and we have made it clear that there are no further concessions. We cannot have a debate in the House before an agreement on the common fisheries policy. To do so would risk reopening the agreements that we have already concluded with the other nine member States and could result in our not obtaining a common fisheries policy by the end of this year. It is vital that we do so.
The Foreign Affairs Council will discuss the budget in January.
We discussed steel in the debate on economic and social matters. As the right hon. Gentleman will be aware, world capacity is far in excess of world demand. That is the fundamental problem and we have been negotiating within the European Community as a unit. We have profited from being in the Community. When we had difficulties with the United States of America, after it tried to put on a larger countervailing duty against our steel than other countries, we tried to negotiate separately with America. We were unsuccessful because America preferred to negotiate with the Community. It was a Community matter.
Detailed points on the common agricultural policy are always dealt with at the Agriculture Ministers Council. We tend to confine ourselves to more limited matters, such as the volume of the budget taken by the Common Agricultural Policy and its impact on the demand for more own resources.
We support Mr. Habib's negotiations, which are now taking place with the parties in Lebanon.
As to international economics, I remind the right hon. Gentleman that the jumbo council, the Council on Economic and Financial Affairs, met recently. We confirmed its conclusions on this matter. We spent much time discussing external relations, hence my references to the International Monetary Fund, trade with Japan arid the GATT meeting at which we were forcefully represented not only by our Secretary of State and Minister of State but by the Community.
Disarmament was discussed in detail at NATO. The European Community is not a defence organisation, but we tend to discuss such matters informally in the margins of the meetings and we were all wholeheartedly behind the attempts to achieve multilateral disarmament at Geneva and we hope that they will proceed apace.
I wish to put three matters to the right hon. Lady. Such statements are made so that we can put questions on behalf of the House—the Prime Minister has not answered any of my questions—and some Conservative Members must get used to that fact.
It is intolerable for the Prime Minister to suggest that we should not have a further debate on the common fisheries policy. Most hon. Members who have fishing interests in their constituencies have asked for such a debate. If the Prime Minister or the Minister of Agriculture, Fisheries and Food have a good case. that is all the more reason for them to come to the House of Commons. That happened in Denmark and it should happen here.
The Prime Minister talked about having to accept the present world demand in the steel industry. If she has no other proposals, we shall not have a steel industry by the beginning of next year or soon after. I urge the right hon. Lady to take the advice that she received in all the debates to which she referred—that much stronger action must be taken by the British Government to protect the steel industry.
As to the multilateral disarmament discussions, the right hon. Lady still does not refer to the MX missile programme. If that programme goes ahead, it will wreck the chances for multilateral disarmament. Why will not the British Government use their influence to hold up that programme?
My right hon. Friend the Minister of Agriculture, Fisheries and Food has continually reported to the House on the fisheries negotiations. He has kept in touch continually with the fishing industry and obtained its agreement to the package. If we go along the right hon. Gentleman's course, we shall risk unpacking that package, which will damage both the British and the Community fishing industries. The right hon. Gentleman advocates a debate when we have only a few days before the time when, unless we reach agreement, in theory other countries could fish right up to our shores—[HON. MEMBERS: "Oh!"] In theory, other countries could fish right up to our shores. There is no point in trying to duck the facts. We have achieved a good agreement among the Nine. We hope that Denmark will join us. That is the best way to reach the common fisheries policy that British fishermen need. They have approved the package, as the right hon. Gentleman will have seen from previous correspondence. We have many discussions about the steel industry, but world demand is down and import penetration in Europe is even worse than it is here. In Europe we have an agreement on a prices and Quota regime. We must try to regain more of our domestic market by being competitive and we must try to do much better in export markets.
MX missiles were not discussed at the European Council. We discussed general multilateral disarmament, but NATO is a much more appropriate forum for the discussion that the right hon. Gentleman wishes to have.
On the central economic and unemployment position with which this European Council was confronted, the Prime Minister's recipe for British recovery is an improvement in competitiveness, which is highly desirable. However, what is her message for European and world recovery, as we are now clearly spiralling down into an increasingly dangerous international slump? Not every country can improve its competitiveness because that is a relative and not an absolute state. What constructive measures does the Prime Minister propose for world recovery?
The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) is well aware that Mr. Ortoli usually reports on those matters and certain proposals and measures are put forward, first, for financial stability and, secondly, to keep interest rates down, preferably through international co-operation as well as by domestic action. In a free enterprise economy, if interest rates have been reduced there should be sufficient people with the initiative to start new businesses and to expand others. I assume that the right hon. Gentleman would approve that mechanism, as he did in days gone by. Therefore, one achieves expansion through new business, more small businesses and productive investment. That is the mechanism by which new jobs are created. The message has not changed since the right hon. Gentleman sat at the table as President of the Commission.
Did the Prime Minister discuss with her European colleagues the damage that she does to Britain's relations with the Arab world by interfering in foreign affairs, about which she is so renownedly unknowing, especially the misguided policy of making impossible King Hassan's committee's visit by refusing to meet a PLO representative, simply to keep alive the moribund policies of a defunct politician such as Henry Kissinger?
Following its visit to the United States, I had hoped that the Arab League delegation would come to Britain when we could have received exactly the same delegation as President Reagan received. That visit was postponed and a number of others have been since. I hope that the visit will be arranged again soon. The hon. Member for Warley, East (Mr. Faulds) knows our view about receiving members of the PLO. We regard that as different from receiving representatives of the Palestinian people.
Was my right hon. Friend able to mention to our colleagues in Europe the dangers, particularly in the severe world recession, of any form of protectionism and import control, especially to a country which lives by exports? Will she consider asking her right hon. and learned Friend the Chancellor of the Exchequer to consider again an early entry of Britain into the EMS?
On the last point, at present, we do not intend to enter the EMS. As my hon. Friend will know, there are reasons why our currency tends to move differently from the currencies of the EMS.
There are two aspects to protectionism and its dangers. There are a number of barriers to trade within the Common Market. They are there and we all know they are there. We have never yet achieved a common market in services such as in insurance and air fares, in which this country excels. There is also a quota on the number of our lorries that can go to Europe. There is a great deal to be done in the Common Market on services. There is also a great deal to be done to take down some of the non-tariff barriers to trade. We urge the Commission and Ministers from every country to consider those matters, particularly with a view to reducing those barriers.
With regard to outside countries, we have a particular problem with Spain which stems from the 1970 agreement between the Community and Spain, which we regard as damaging. We have asked the Commission to examine that matter. My hon. Friend will also see in the President's summing-up preparations to discuss with Japan commercal relations which, at present, are much too one-sided and cannot continue in that way.
Further to the right hon. Lady's reply on the Middle East, is she aware that some Labour Members consider that her decision not to receive the PLO in the present circumstances was absolutely correct and welcome it? Will she confirm that her policy on this matter will remain firm as an example to other European leaders?
My policy on that matter has not changed, but I hope that in the interests of furthering the peace process we shall be able soon to receive the type of delegation from the Arab League which was received by President Reagan in the United States. It would be a great help to the peace process if it were to come and we were to have talks about these vital matters.
In view of the terrible atrocities being perpetrated by the Russians in Afghanistan at present, did my right hon. Friend manage to propose to our colleagues in Europe any measures that might be taken to support the fight for freedom of those brave people in Afghanistan against Russian aggression rather than merely sitting back and wringing our hands, which seems to be the policy of the European Community so far?
We were particularly careful to make it clear that the plight of the peoples in Afghanistan is not forgotten. We look to the new Russian leadership to see what its policy will be towards Afghanistan. Those who are fighting the Soviet Union in Afghanistan seem to be receiving sufficient weapons to enable them to carry out their task of throwing back the occupying forces. I can assure my hon. Friend that no one around that table has forgotten the plight of the peoples in occupied Afghanistan.
As more than three months have elapsed since the Reagan peace initiative on the Middle East was promulgated, since when important proposals have been issued from the Fez summit, does the Prime Minister agree that there should be more positive developments towards securing peace in the Middle East? During the summit, was common agreement reached about the necessity to recognise the right of the PLO to be drawn into negotiations on any matter that affects the future of the Palestinian people?
The President's summing-up pointed out:
The European Council expressed its disappointment at the delay in grasping the political opportunity created by the initiative contained in President Reagan's speech on September 1, 1982, and the will to peace expressed in the declaration of Arab Heads of State meeting at Fez on September 9, 1982.
The right hon. Gentleman will be aware of the difficulty of carrying out negotiations to secure the withdrawal of foreign troops from the soil of Lebanon. We support Mr. Habib's efforts to attempt to secure that withdrawal. The European policy towards the PLO is as stated in the Venice declaration, which said that the PLO would have to be associated with any settlement.
Will my right hon. Friend say something more about the consideration by the Council of youth training? Was there any consideration in the Council this time of the German practice of providing full training of three years or more for young people? Does my right hon. Friend agree that that practice is worthy of consideration in Britain?
We each have our own scheme of youth training. The German scheme has been different from ours for a long time. It is tied in to a different wage level for young people when they go from school to training in industry, where they have particular apprenticeships. Wages for young people are often very much lower than wages under wages council directions in Britain. We pointed out that we are introducing a scheme in Spetember 1983. The other factor which makes Britain different from many other countries is that most of those countries have conscription for young people, which takes from the unemployment list a whole year's worth of young people who are called up for service in their Armed Forces. We do not have compulsory conscription and we have no intention of introducing it.
Is the Prime Minister aware of reports that the number of inspectors to be appointed at European level to police the common fisheries policy may be drastically reduced? Since that was part and parcel of the agreement to the revised common fisheries package, should that not be brought out and debated in the House?
The number which has now been agreed—I believe it is 13—is thought to be the appropriate number for monitoring the common fisheries policy.
Will my right hon. Friend shed further light on the apparent new disunity in the EC over the Middle East? Has there been criticism of the fact that Britain alone has refused to receive the delegation of Middle East leaders led by King Hassan of Morocco? In that context, will the Prime Minister explain why her Ministers are able to meet PLO spokesmen but her Government are not?
There was no criticism whatsoever in the European Council of Britain's position—none at all. No member of the British Cabinet has ever officially met a representative of the PLO. Contacts are made through officials. My right hon. Friend the Minister of State, Foreign and Commonwealth Office, met an Arab League delegation some time ago, which included a member of the PLO.
There was no attempt to gain further concessions on the existing package because we had consistently made it perfectly clear that the negotiating process was at an end. I had made the British position clear when the Danish Prime Minister came to Britain. A meeting of the Common Fisheries Council took place on the Monday before the European Council meeting, at which all the Nine made it quite clear that negotiations were at an end.
It seems to us that that presents Denmark with a new position which it has not faced before. Negotiations are at an end and it either has to agree—it is accepted that the difference between it and the other member States is very small—or it has to face the Nine taking national measures, which would be distasteful for everyone. I cannot give any particular evidence but I still believe that Denmark will agree to the common fisheries policy by the end of the year. The policy is enforced not by the 13 inspectors but by the adjacent coastal States.
Will my right hon. Friend accept how pleased we were in the Midlands to hear her usual robust comments on the problems that we are having with Japan and Spain over unfair imports? Will she instil into some of her appropriate Ministers the same Gaullist approach in trying to ensure that this untenable situation is changed? I hope that she will accept that some of us feel that the footbridge between Gibraltar and Spain may be bought at the expense of an unfair practice that may bankrupt much of the British motor industry.
I spoke stongly about the difficulty with the 1970 agreement between the Community and Spain, by which we are bound by virtue of our accession. we are bound to observe the tariff barriers, which are very disparate. Spain can get into our market, which has a 4 per cent. tariff barrier, and shelter in its own market behind a 37 per cent. tariff barrier. In addition, certain bureaucratic measures are operated that make it even more difficult for our exports to get into its market. There can be no question of Spain becoming a full member of the EC unless the Spanish side of the border with Gibraltar is fully and properly opened.