European Community

Part of Ballot for Notices of Motions – in the House of Commons at 7:22 pm on 18 November 1987.

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Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South 7:22, 18 November 1987

I agree with a good deal of what the hon. Member for Esher (Mr. Taylor) said at the beginning of his remarks and congratulate him on his approach. However, I could not agree with the rest of his speech and when I come to my remarks about the Cockfield package I hope to show why.

First, let me comment on the hon. Gentleman's dismissal of just £26 billion — not £26 million, but £26,000 million. That sum may be equivalent to our own social security budget. It may be just 12 to 13 per cent. of our VAT take, although that is quite a lot for a Chancellor to deal with. Our current contribution to the EEC, including customs duties of more than £1,000 million, now amounts to £4,000 million. Statistically the hon. Gentleman may be right, but the matter looks rather different when one considers it in terms of what this country would do with that money were this House in control of it.

This afternoon we are exercising the power of scrutiny, but I am not sure that we are doing very much more than that. The power of scrutiny can be defined as the power to be aware both of the factors and of their context, and as having the power to influence through that knowledge. If one has real power, one has the power to change arid, in this context, the power to approve or disapprove. I am afraid that the House no longer has that power. I do not know how long ago the Government last disapproved a Commission document or when the Opposition last succeeded in doing so. It would be instructive for hon. Members to look in the history books to find out when it was. Only this week I received a letter from a prominent Member of the European Parliament referring to the activities of this House in relation to EEC matters as but a "rubber stamp". Whether we are more than that depends a great deal on the activities and integrity of Conservative Members.

On 21 October I asked the Minister of State, Foreign and Commonwealth Office, who is not here now, about the Copenhagen summit and the powers of the Council of Ministers, or the European Council as we now have to call it. I asked whether the decisions would commit this country even if further regulations were promulgated. The right hon. Lady said: The Copenhagen meeting of leaders of European Community countries will be no different from any other European Council meeting. We shall proceed exactly as we have previously, under the Single European Act, which now binds us all together."—[Official Report, 21 October 1987; Vol. 120, c. 708.] I do not know whether the right hon. Lady was speaking Eurospeak, or newspeak, or some other kind of speak, but the remarks seem inaccurate. The Single European Act came into operation only on 1 July. The Copenhagen meeting will be the first meeting of Heads of Government under that Act.

I agree with the hon. Member for Esher that the fact that we are operating under that Act makes this debate, the process of decision-making, the nature of the package and its linkage with the European institutions to which the hon. Gentleman referred a very different matter. That is why I am surprised that the Single European Act and its significance are not dealt with in the two White Papers that we are considering. Only eight lines of these important White Papers refer to the Single European Act, and most of those eight relate to dates. In that respect the Government are off beam in their report about developments in the Community.

In our commitment to the Single European Act there is a commitment to European union. There is the wish for a single European market by 1992, which is frequently referred to by Conservative Members. There is the system of majority voting in the Council for a wide range of harmonisation. There is the power of the European Parliament, now officially named that, to amend legislation. Indeed, with the approval of the Commission, it is almost certain that the European Parliament will amend legislation in a way that we in this House cannot. There is the prospect of increased expenditure—up to 45 per cent. more in real terms — by 1992. There is a commitment to the doubling of the structural funds, much of which must go to the southern members of the EEC, and there is now the attempt at budgetary discipline. I was grateful to the Minister when she said that we would have another debate on the outcome of the Agriculture Ministers' meeting and possibly of the Finance Ministers' and Foreign Ministers' meetings before the meeting in Copenhagen.

One issue that I did not list under the effects of the Single European Act and building towards its success, as outlined in Cm. 101, is the possible United Kingdom rebate. I say "possible" because, under the terms of the proposal from the Commission, we will get it in 1988. In answer to a question, the right hon. Lady said that we would get something because there is a unanimous requirement that it goes on after Fontainebleau. The Treasury Minister may be in a better position to answer.

From what basis does that so-called unanimity spring? I had understood that after Fontainebleau the rebate mechanism would disappear after the end of the 1·4 per cent. ceiling. If there is agreement in Copenhagen, that ceiling will end. I can only conclude that the unanimity to which the Minister of State, Foreign and Commonwealth Office referred was our power of requiring unanimity over an increase in the budget as such, and that it is the linkage of that that provides us with the power to try to renegotiate a United Kingdom rebate. It is to the nature of that rebate that I wish to address my remarks.

In the 17th report of the Scrutiny Committee, Session 1986–87, referring to new own resources, we say: These resources would be subject to a ceiling set at 1·4 per cent. of the Community's GNP until at least 1992. The Commission also proposes replacement of the existing Fontainebleau abatement system by a 50 per cent. refund of the burden to the United Kingdom arising from the CAP. That is the mechanism on the table. The reference to 50 per cent. of the burden is taken from the Commission's proposals. I interpret that as a refund of half the difference between our CAP share and our CAP income.

That may look all right in figures, but there is a quotation in another report which shows that the situation is not as rosy as Conservative Members may think. When the Minister quoted figures, I believe that she was quoting the calculation on the GNP formula, but in relation to our own rebate the position is different. In its 19th report in the 1986–87 Session the Scrutiny Committee said: The EM"— that is the explanatory memorandum— also notes a Commission estimate that under the proposed new corrective system the United Kingdom would have received a compensatory payment in respect of 1987 of 1,016 million ecu (£701 million). This compares to a forecast in the Treasury's Public Expenditure White Paper of an abatement of £1,623 million in respect of 1987 over the existing Fontainebleau abatement system. The abatement would therefore have been £922 million less if the new mechanism had been in operation. This is the abatement. We are not talking about the GNP own resources formula. The abatement plays a large part in our net payments. In 1986, out of a payment of £4,493 million, we received only £2,219 million, with a net payment of £2,274 million. That was reduced by a rebate of £1,701 million, giving a final figure for the net contribution of £573 million. Therefore, the gearing of that final figure to the United Kingdom rebate was 3:1. The nature of our rebate mechanism and the likelihood of us getting a large sum are crucial.

I remind Conservative Members that if the agricultural problem is dealt with effectively, the disequilibrium between our contribution to the CAP and our receipts will get smaller. So far as I can see, and the Treasury Minister will agree or disagree when he replies, the rebate that we receive will also get smaller. Considered in that light, the prospects of the rebate system as proposed by the Commission are not at all bright.

I look upon that as an objective calculation that might have been made by the Select Committee on the Treasury and Civil Service if it had had an opportunity to have a go at it. I am glad to see here the Chairman of that Committee in the last Parliament — the right hon. Member for Worthing (Mr. Higgins). I think that before the election the Select Committee did some quick work on it.

What about the increase in contributions? We will have that only if the Prime Minister and the Chancellor of the Exchequer get their discipline. They may or may not get it, but let us assume that they do. The Minister of State told us this afternoon that if they get the discipline we will not agree to 1·4 per cent. GNP related and that we will not go up to a 44 per cent. increase. Perhaps they will reduce that figure to 1·2 or 1 per cent. and we will hear from the media that the Prime Minister has had a great victory because she has reduced the proposed increase. But out of that increase there is to be a doubling of the structural fund. Again the Minister has said that we do not want a doubling of the structural fund and that that is too much. The Government will have to give something. Even if discipline is achieved there will have to be some increase, if only to pay the deficit in the 1987 budget.