Speeches, Interviews & Other Statements

Margaret Thatcher

HC Stmnt: [European Council (Brussels)]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [127/705-17]
Editorial comments:
Importance ranking: Major
Word count: 7127
Themes: Agriculture, Parliament, Pay, Trade, European Union (general), European Union Budget, European Union Single Market, Health policy, Labour Party & socialism, Leadership, Northern Ireland, Terrorism
[column 705]

European Council (Brussels)

3.30 pm

The Prime Minister (Mrs. Margaret Thatcher)

With permission, Mr. Speaker, I shall make a statement about the European Council in Brussels on 11-13 February, which I attended together with my right hon. and learned Friend Sir Geoffrey Howethe Secretary of State for Foreign and Commonwealth Affairs. The Council's detailed conclusions are being placed in the Library.

This meeting concluded a major and far-reaching review of the Community's finances and policies. At the outset, the United Kingdom made clear, first, that any further increase in Community resources must be accompanied by effective and legally binding controls on expenditure; second, that there would have to be effective measures to reduce agricultural surpluses, to bring supply and demand much more into balance, and that automatic price penalties on individual commodities would be the principal weapon; third, there should be no oils and fats tax; fourth, that we were determined to preserve in full the system of abating Britain's budgetary contribution agreed at Fontainebleau in 1984, which has saved us some £3,000 million in the past three years. All of these objectives have been achieved.

I shall summarise the main elements of what has been agreed. First, on agriculture, we are now setting in place what have become known as stabiliser measures necessary to control both output and spending. The detailed arrangements vary from commodity to commodity. But the central concept is an automatic price penalty if an agreed quantity of production is exceeded.

For cereals that will mean that, if production exceeds a threshold set for the next four years at 160 million tonnes—that is, 8 million tonnes below the expected 1988 harvest—there will be price cuts of 3 per cent. a year. And the full 3 per cent. cut will apply to the whole crop if production exceeds the threshold by a single tonne.

Those cuts will be cumulative so that if harvests continue to exceed the threshold there will be a 12 per cent. price cut by the fourth year. In addition, there is provision for an increase of up to 3 per cent. in the co-responsibility levy.

For oil seeds, where in the last three years there has been a colossal increase in Community production, even more severe measures have been adopted. The forecast harvest for rapeseed for this year, for example, is 6.3 million tonnes. Nevertheless, the guarantee threshold for rapeseed has been set much lower at 4.5 million tonnes. If the harvest is as forecast, it will mean a price cut of 8 per cent. this year, on top of 10 per cent. last year. The price cuts become even larger in following years if production none the less continues to rise.

The Council had also expected to confirm agreement on stabilisers for eight further commodities, including olive oil, wine, tobacco, fruit and vegetables, milk products and sheepmeat, on which we had decided in principle at our Copenhagen meeting. This agreement has been delayed by France until the meeting of the Foreign Affairs Council on 22-23 February. The Dutch Prime Minister and I made clear that our agreement to all the measures before the European Council last week was conditional on the adoption of these eight stabilisers as they are. [column 706]

In the light of experience, we have insisted that all these controls should be in legally binding form. That is provided in paragraph 19 of the detailed conclusions adopted by the Council, which reads:

“All the elements set out above are legally binding decisions on the general principles of budgetary discipline. Corresponding legal texts will be adopted to replace the 1984 decision and will remain in force for the duration of the own resources decision. The stabilisers will be incorporated into the agricultural market regulations.”

To complement the stabiliser arrangements and further discourage over-production, the Council has agreed to the general principles of a set-aside scheme to take agricultural land out of production. In order to qualify, a farmer must set aside at least 20 per cent. of his arable land for at least five years. Detailed agreement was reached on the maximum premium payable and the level of Community contribution.

To improve overall control of the CAP, we have also tightened the discipline of the financial guideline for agricultural spending. The guideline base for 1988 has been set at a figure of 27.5 billion ecu—about £19 billion—and its application has been reinforced in four separate ways.

First, it is agreed that the Commission's price proposals must in future always be consistent with the guideline.

Second, we have eliminated the general provision for expenditure in so-called exceptional circumstances. In future a specific and limited financial reserve will be established to take account of one factor only—the substantial in-year changes in the dollar/ecu exchange rate, with a budget effect of more than 400 million ecu. If the dollar goes up in value by more than that, there will be an automatic reduction in the amount spent on agriculture.

Third, it has been agreed that the cost of depreciating and disposing of existing surplus stocks will be financed outside the guideline, but within the budget, and that new stocks will be systematically depreciated as they are established.

Fourth, it has been agreed that the guideline itself will in future rise at a rate significantly lower than the total resources available for Community expenditure. The new rate will be three quarters of the rate of growth of Community GNP. Over time, that will reduce the proportion of Community expenditure taken by agriculture, so reversing the trend of the past.

As the second main element, the Council completed the review of the level and objectives of the Community's structural funds—the regional, social and agricultural structures funds. The Council concluded that commitments on the structural funds should increase annually over the period 1989–92 by 1.3 becu a year—[Interruption.]

Mr. Speaker

Order. This is a statement that the House has been waiting to hear.

The Prime Minister

That is equivalent to a total real increase over 1987 of some 80 per cent., and will permit doubling for less developed regions. Particular provision is being made within these funds for a programme of industrial modernisation in Portugal.

Third, we have secured a tightening of arrangements for budgetary management. This will limit the use of carry-over provisions and creative accounting devices, such as [column 707]what are euphemistically called negative reserves, to which there has in the past been excessive recourse, and which have been particularly unwelcome to us.

Fourth, we decided on an increase in the resources available to the Community. These will in future be expressed in terms of Community GNP rather than, as now, of VAT. The Commission originally proposed that the own-resources ceiling should be raised from 1.4 per cent. of VAT to 1.4 per cent. of GNP, equivalent to 2.3 per cent. VAT—in other words, a 50 per cent. increase. The Council rejected this proposal. We decided instead that the Community's new own-resource ceiling for the Twelve should be 1.2 per cent. GNP, which is an increase of some 25 per cent. over the current figure and is realistic in the light of recent trends. This ceiling will last until 1992 at least.

In future, the cost to other member countries of the United Kingdom's abatement will be outside the agreed own-resources ceiling.

Lastly, as the House knows, a key United Kingdom objective throughout these negotiations has been to retain our Fontainebleau abatement in full. The need for it, and its scale, were challenged on various grounds, not least the recent rapid growth of the United Kingdom economy; and proposals were made to confine the correction in future to the gap between our share of Community GNP and our share of agricultural expenditure, and progressively to reduce it.

I made it clear that I was not prepared to contemplate any reduction in the benefit that we receive as a result of the Fontainebleau mechanism. I am glad to tell the House that the Council agreed to this. The Fontainebleau mechanism will, therefore, remain totally intact, and it will, once again, last as long as the new own-resources arrangements.

In practice, thanks to the abatement, Britain's gross contribution should remain a little over 1 per cent. of GNP—well below that of other member states.

The decisions reached will now be translated into firm and legally binding texts. Only when those texts have been agreed will the Government recommend to the House the new level of own resources.

Our achievement in securing more effective control of farm spending should benefit consumers, through lower prices, and farmers, through greater certainty about future market conditions. The share of agriculture in the Community's budget will decline. The British taxpayer will continue to get the full benefit of the Fontainebleau abatement.

The way is now clear for the Community to concentrate on its most important goal—the creation of a genuine single market by 1992.

I commend these substantial results to the House.

Mr. Roy Hattersley (Birmingham, Sparkbrook)

If, as the Prime Minister claims, the objectives of her negotiation have been achieved, why has even the ultra-loyal Daily Telegraph described it as

“A British retreat on several fronts” ?

More intriguing, what brought that retreat about? Why, for example, having dismissed a rate of growth in agricultural spending of more than 60 per cent. as “extravagant and indefensible” , did the Prime Minister [column 708]accept a figure that she admits to be 74 per cent. when on full, proper and accurate calculation the true figure is nearer 80 per cent?

Why, having described a cereal production ceiling of more than 155 million tonnes as an

“attack on the taxpayer and the housewife” ,

did the Prime Minister accept a ceiling of 160 million tonnes? That, as she knows—the Minister of Agriculture, Fisheries and Food is confirming it to her now—is worse than the Copenhagen agreement. No doubt the Minister is also reminding her that he rejected 158 million tonnes as an ineffective stabiliser, yet we now have 160 million tonnes.

On the overall budget figures, will the Prime Minister confirm that the new budget ceiling of between 1.2 and 1.3 per cent. of Community GNP, when compared fairly and properly with the old method of VAT calculation, amounts to a very considerable increase—from 1.4 per cent. to almost 2 per cent.? Those are the official figures. It is an increase not of a quarter, as the Prime Minister claims, but of more than one third.

In the words of The Times, even allowing for the vaunted rebate,

“Britain's net contribution will increase.”

How does the Prime Minister justify that, and will she attempt to do so this afternoon?

The Prime Minister has offered one excuse for her capitulation—that she has opened the way for the internal market. Since the internal market that she proposes will do immense harm to Britain, she must not expect us to rejoice at that. In addition, her apologists have claimed that, without an agreement, the Community might have collapsed. It is true that the CAP might have collapsed, but the CAP and the Community are not one and the same. As the CAP does such harm to the British consumer and prejudices the whole future of the Community, none of us will rejoice that the CAP has been saved by the endeavours of the Prime Minister last weekend.

Having said that, I shall end with a word of congratulation. May I congratulate the Prime Minister on herself writing the epitaph on the summit before she went to Brussels? She spoke of running away from it—accommodating surpluses, not dealing with them. That is what she has done: she has run away.

The Prime Minister

I doubt very much much whether those who live in Community countries would endorse what has been said by The Daily Telegraph or the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). May I point out that the French newspaper Liberation says:

“The British Prime Minister can boast of having preserved her cheque … and above all of having won the point that she was refused at Fontainbleau: the checking of the inflationary spiral of agricultural subsidies.”

Le Figaro says:

“It is likely that in the plane on the way back to London the British delegation was exchanging knowing smiles and satisfied hand-shakes.”

In Germany, Die Welt stresses the financial sacrifices for the Federal Republic of Germany, estimated as costing Germany 4 billion deutschmarks rising to 10 billion by 1992.

Those countries know that Britain got a good deal. It got the Fontainebleau mechanism, the legally binding regulations that we have long sought, and the stabilisers, by virtue of price reductions. Perhaps the right hon. [column 709]Gentleman will be aware that, as recently as 1985, Germany invoked the Luxembourg compromise over a 1.8 per cent. price cut. This time, we have price cuts of 3 per cent. over four years in succession, when it was only three years in succession in the case of Copenhagen.

The right hon. Gentleman asked about the 160 million tonnes. That 160 million tonnes—a good deal below the forecast harvest for this year—has the stabiliser operating in full at the first tonne over the 160 million.

Mr. Hattersley

Next year.

The Prime Minister

This year, a 2 per cent. price cut is expected to operate on the incremental arrangements that apply if people keep their own wheat and other cereals in store. Normally, they receive an increased amount. That will be cut, and the reduction will equal 2 per cent. price cuts. [Interruption.] Perhaps the right hon. Member for Manchester, Gorton (Mr. Kaufman) will stop muttering from a sitting position, which means that he cannot listen.

Mr. Gerald Kaufman (Manchester, Gorton)

I can listen.

The Prime Minister

No, the right hon. Gentleman cannot listen. But perhaps he will listen now, if it is not asking too much of him—which I suspect it may be.

The 155 million tonnes did not have the 3 per cent. operating immediately. It went up steadily by only 1 per cent., and the full 3 per cent. was not reached until 160 million tonnes. The 3 per cent. operates immediately on 160 million tonnes, as it would have operated previously, and, because there would have been a slight improvement at 1 and 2 per cent. on the 155 million tonnes, we extended the 3 per cent. cut for a further year. Therefore, we have a 12 per cent. price reduction instead of a 9 per cent. reduction. [Interruption.] No, I do not expect that the hon. Gentleman understands it; it is, I confess, very complicated.

The right hon. Gentleman mentioned the ceiling of between 1.2 per cent. and 1.3 per cent. of GNP. The 1.2 per cent. limit is on a payments basis, because it is payments that must be financed—the 1.3 per cent. limit is on a commitments basis—and is equal to 1.9 per cent. VAT, which is equal to 1.72 abatement exclusive. That is the difference.

Several Hon. Members


Mr. Speaker

Order. I have to take account of the fact that this is a private Members' day. It would be fair for questions to continue until quarter past four. An agricultural debate follows at 7 pm. I will have to take account of those hon. Members whom I call during this statement and those who may be called later.

Mr. Leon Brittan(Richmond, Yorks)

Does my right hon. Friend agree that the Opposition's strictures ring hollow in the ears of those who know with what bitterness and virulence my right hon. Friend would have been denounced if she had broken up the summit? Will my right hon. Friend also—[Interruption.]

Mr. Speaker

Order. The right hon. and learned Gentleman has as much right to make his point as anyone else.

Mr. Brittan

Will my right hon. Friend also accept that the system that has been set up at the summit will, over a period, bring downward pressure to bear on output and [column 710]prices in a legally binding way? Does she accept that this is a major step forward in controlling the common agricultural policy and is to be warmly welcomed?

The Prime Minister

Yes, Sir. One of the battles has been to get Germany to accept that reductions in agricultural production should be achieved by virtue of price cuts. As I have said, only two or three years ago Germany was using the Luxembourg compromise against that. Germany resisted it, but then agreed that this was the best way to proceed. Would Opposition Members like to have their incomes cut by 12 per cent. on one commodity and by 18 per cent. on another? I do not believe that they would. That is what is happening with wheat and oil seeds.

Mr. David Steel(Tweeddale, Ettrick and Lauderdale)

Will the Prime Minister accept that some of us who have been critical of the CAP recognise that this agreement represents significant progress towards control over the agricultural budget—from 70 per cent. of the Community's budget to 50 per cent. by 1992? That should be welcomed as at least a step in the right direction.

The Prime Minister referred to the disposal of surplus stocks. Was that discussed in the context of Third world need? How will this country benefit from the increase in the regional and social funds in the light of the Government's reduced commitment to regional development in Britain? Will she accept that, unlike the official Opposition, those of us on this Bench accept that the collapse of the summit would have been much more costly to our national interests? The failure to reach a common market by 1992 would have been far more expensive for the Community as a whole than the present budget. Thank goodness that for once the lady was for turning.

The Prime Minister

With regard to surpluses, the right hon. Gentleman is aware that we have always said that we must operate on two fronts simultaneously—one to reduce surpluses, and the other to reduce production that has risen year by year. There has been a great effort with regard to surpluses over the past year. Surpluses of skimmed milk powder have decreased by 34 per cent. and surpluses of butter have been reduced by 31 per cent. Of course the cost of disposing of those surpluses comes within the budget as it will in future. However, in future, when material enters surplus store, it will be depreciated immediately by 20 per cent. and will depreciate slowly within the coming five years. It is likely that the existing surpluses will be disposed of and we shall get rid of the overhang.

That is accompanied by very substantial price penalties, as I have said. There will be a 12 per cent. penalty if it is triggered on wheat and cereals and even heavier price penalties on oil seeds. That will act on the production side to reduce prices and surpluses and possibly enable us to sell what we do not need. I should state that we are not self-sufficient by any means in oil seeds. We produce only 45 per cent. of our requirements.

With regard to the structural funds, we give something like—[Interruption.] The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) is entitled to a reply. We receive about £750 million from the structural funds. Indeed, we do fairly well out of the funds. We hope that that figure will increase to about £1,000 million in 1992. If we did not belong to the CAP, we would need very considerable subsidies by way of enormous [column 711]deficiency payments or there would be considerable price increases in other directions through the imposition of even heavier levies at the port of entry.

Mr. Teddy Taylor (Southend, East)

Is not the decision to give a real increase in spending of 25 per cent. to an organisation currently spending £233 million a week on dumping and destroying food and £40 million a week on financing fraud a bit of an insult to every local council and health authority struggling to keep within their agreed limits? With regard to the so-called legally binding controls, does not my right hon. Friend the Prime Minister agree that, last year, the Commission was obliged to stick to 1.4 per cent. under a legally binding control, but, despite that, it spent 20 per cent. more by a whole host of devices, including the famous metric year of 10 months? Is there anything in the agreement which will stop the Commission doing that in 1991?

The Prime Minister

As I said in reply to the previous question, surpluses of powdered milk and butter have gone down considerably by one third in the past year. We have to finance exports of cereals, in which we are more than self-sufficient, but if we pull out totally of allowing our farmers to export some of their grain, or if the United States and other countries allow their farmers to export, it is bad for the countryside. On oils and proteins, where there is a severe price reduction, we are not self-sufficient, but we thought it important, from the viewpoint of the Third world, not to have an oils and fats tax.

With regard to legally binding mechanisms for each of the agricultural stabilisers, I understand why my hon. Friend is sceptical. He and I have always wanted them to be legally binding and, hitherto, we relied on the word of the European Council. That is why, this time, we were not prepared to do that. This time, all of those stabilisers will be embodied in legally binding regulations, which will come before the House, or go into the agricultural regulations, and will, therefore, be enforceable. Unless and until that is done, I am not prepared to recommend to the House that own resources be increased.

Mr. Peter Shore (Bethnal Green and Stepney)

In spite of the bravado of the Prime Minister's words about achieved objectives, the House will recognise that this is a sad day for her and a sadder day for British taxpayers and consumers. Is it not a fact that, in exchange for extremely insecure and untried restraints on agricultural production, the Prime Minister has conceded an increase in the Community's budget of not 25 per cent., but, compared with last year's outturn expenditure, of almost 45 per cent.?

Further, is it not a fact that the right hon. Lady has agreed to introduce a new and fourth Community tax on the British people? Will she tell us whether there will be a larger British net contribution to the EEC in 1992 than there was in 1987? Will she also make it plain whether the £550 per annum that the Treasury told us the average British family was paying each year because of the CAP will be larger or smaller in four years' time?

The Prime Minister

First, on the agricultural point, there is evidence that stabilisers work, and the right hon. Gentleman knows it. He knows that we have tried very [column 712]effective stabilisers on milk quotas and that they are working and reducing surpluses substantially. They are not untried mechanisms; they are tried mechanisms.

Over the past year, we have tried to persuade Germany to accept stabilisers by virtue, particularly, of price reductions. The Germans were anxious not to do that and proposed various other mechanisms which explains why they used the Luxembourg compromise only two years ago. We have persuaded them to reduce prices by 3 per cent. per year for cereals, if the amount produced goes over the threshold. That is a cumulative 12 per cent. to which is added an extra 3 per cent. co-responsibility levy, to which will be added another 2 per cent. this year for those who keep their own produce in store for very much longer. That is about 17 per cent. and is an effective price reduction over the coming four years. The price reductions for oils are even sharper. [Interruption.] Hon. Members would not like it if we came forth with a similar income reduction for them.

Secondly, there is a substantial increase in structural funds. People have often wanted to take a larger proportion, provided that we could get stabilisers on agriculture. We have got those stabilisers. The increase in structural funds was required to give the southern countries of Spain and Portugal, which have come into the Community, some hope of having a better deal. It was clear from the eight sets of minor stabilisers that they would not be able to produce surpluses as has, until now, happened in the northern countries. Those two matters have been dealt with.

The fourth resource, that allied to gross national product, does not make any difference to us because of the Fontainebleau rebate. We have arranged to get precisely the same amount as we would have received under the Fontainebleau mechanism related to VAT. That cancels out any different effect from the GNP, so long as the Fontainebleau mechanism continues. As I said, there will be an increase, up to 1992, of a maximum of about £300 million a year compared to the 1.4 per cent. VAT this year is over the rate at which we are spending this year. It is an increase of about £150 million to £200 million.

Several Hon. Members


Mr. Speaker

Order. I ask for brief questions. [Hon. Members: “And answers.” ] If long questions are asked, they attract long answers.

Sir Charles Morrison (Devizes)

That agreement was reached against all the odds and forecasts is a remarkable achievement and undoubtedly will provide a far better basis for farmers' planning in future. Does my right hon. Friend agree that the more effective the set-aside system turns out to be, the less need there will be for the application of stabilisers? Will it be up to the Council of Agriculture Ministers collectively to agree on the set-aside system or will it be up to the individual nations?

The Prime Minister

We have agreed on a ceiling available for set-aside which is of the order of 600 million ecus, and a maximum amount which can be paid. The precise amount which separate nations agree will be determined by themselves, but there is a maximum amount which can be found from the FEOGA guarantee. Set-aside is new country. Some people think that it will work extremely well and others are sceptical. That is why there is quite a severe ceiling on the amount which can be allocated from the common agricultural policy. [column 713]

I am grateful to my hon. Friend for his thanks. We got about 95 per cent. of what we set out to get, and anyone who thinks that 95 per cent. would have been available at Hanover is thinking in cloud-cuckoo-land.

Mr. Nigel Spearing (Newham, South)

Why were these complex matters not put in the official communiqué in the Library before the statement was made? Is it the fault of the EEC or of the Foreign Office? When speaking about the new ceiling, the Prime Minister used two old figures—1.9 and 1.7 per cent.—on the old VAT formula. Does not this represent an increase in EEC expenditure of between 70 and 90 per cent? How does she justify it? How will the EEC, in the meantime, raise money for the 1988 budget? How will the new draft decision be placed before the House and when and how can the money be raised legally?

The Prime Minister

At the moment, the limit is 1.4 per cent. VAT, as the hon. Gentleman knows. He also knows that by various devices, to which I referred and which both he and I hate, such as carry-over and what is called negative reserve which we wanted to test in the courts but we were advised was legal, the Community is spending at 1.6 per cent. VAT, including the abatement. The 1.9 per cent. VAT would be the equivalent to the new ceiling, abatement inclusive. The 1.72 per cent. is the equivalent with the abatement excluded. Our abatement is now to be financed separately, so 1.72 per cent. is the equivalent figure to the 1.4 per cent.

The regulations will be brought before the House in the normal way. I entirely accept and agree that I should not recommend an increase in own resources until we have got those recommendations in a legally binding form. We did not get it at Fontainebleau. This time we have, and it is a major achievement.

Mr. Robert Hicks (Cornwall, South-East)

In view of the effects that these proposals are likely to have on the level of farm incomes over the next few years, has any assessment been made as to the impact the proposals will have on the countryside and our rural areas as we know them today?

The Prime Minister

I think that our farmers were prepared to have considerable price reductions on cereals—wheat and barley—and on the oil seeds. I think that they preferred us to have quite a tough settlement, as this one is, on the ground that, if we got a settlement, they would know how to plan for the future. Some of them will want a set-aside scheme and will take advantage of it. Others will not, and will prefer to have different kinds of crops. I entirely agree with my hon. Friend: unless we have a reasonably prosperous farming sector, our rural communities will die and the state of the rural environment will be appalling. Apparently, the Opposition do not care about either.

Mr. Dafydd Wigley (Caernarfon)

Is the Prime Minister aware of the grave concern in those areas of Wales of marginal land where there is subsistence sheep farming? Can she give an assurance that, in announcing the doubling of the structural funds towards less developed areas, there will be a doubling for the western seaboards, which are dependent on elements that may be hard hit by the changes in the agriculture regime?

The Prime Minister

No, I cannot guarantee that there will be a doubling for a particular area. We do well from [column 714]the social fund of the structural funds, but we shall not do quite so well from the regional funds because there are areas much worse off than we are. Nevertheless, we hope overall to have the amount that we receive now, £750 million, going up to £1 billion by 1992. Alas, I cannot give the hon. Gentleman, nor would he expect me to, a guarantee on exactly how it will be distributed.

Mr. James Kilfedder (North Down)

The Prime Minister should be commended for the progress that she made, in difficult circumstances, at the summit, which might best be described as kicking for touch as far up the field as is humanly possible and in the face of tremendous odds. After her meeting with Mr. Haughey, does she know whether he is aware of the threat posed to people north and south of the border by the IRA which has murdered more than 250 RUC officers?

The Prime Minister

I had a meeting in the margins of the European Community with Mr. Haughey. It lasted half an hour and was calm and dignified. We both agree that the Anglo-Irish Agreement must continue. Mr. Haughey recognised that there would soon be a Council meeting under the agreement. We agreed that security co-operation across the border is vital not only for Northern Ireland but for the Republic of Ireland as well. The IRA and its tactics are a challenge to democracy in the Republic of Ireland, as they are in Northern Ireland. We recognise that my right hon. Friend Tom Kingthe Secretary of State for Northern Ireland will be making a statement as soon as possible on the other measures with regard to the RUC which are within his jurisdiction.

Mr. Stanley Orme (Salford, East)

On a point of order, Mr. Speaker.

Mr. Speaker

I will take it after questions on the statement.

Mr. James Lamond (Oldham, Central and Royton)

When the Prime Minister was sitting in the middle of the night reflecting on the fact that she was being sworn at by Frenchmen and that the Common Market had interfered with almost everything in this country from cabotage to the size and shape of our passports, all at a cost of more than £10 per week for every family in the land, which is likely to increase in the next few years, did she not think that when, according to her, we are doing so well in this country with everything improving, employment going up, the balance of payments being right and productivity increasing, it is time to get out of the Common Market and stand on our own two feet for a change?

The Prime Minister

I really rather thought—[Interruption.]

Mr. Speaker

Order. It is no good the hon. Member for Bolsover (Mr. Skinner) continually shouting out from a sedentary position. It does not contribute to our debates.

The Prime Minister

When Neil Kinnockthe Leader of the Opposition visited Brussels, I thought that he had made a statement saying that the Labour party had no intention of pulling out of the Common Market. It seems as if he did not know what his Back Benchers were thinking.

Mr. Nicholas Budgen (Wolverhampton, South-West)

If, as is said, the EEC has so many noble and important objectives other than the gross subsidy and grubby protectionism of the common agricultural policy, why did [column 715]not my right hon. Friend exercise the veto, run the risk of breaking up the CAP and allow the member states to subsidise their own farmers as they wish?

The Prime Minister

The effect of not agreeing when we had achieved 95 per cent. of what we wanted would not have been to break up the CAP. Do not let my hon. Friend delude himself. The CAP would have gone on. He knows that if we were not in the common agricultural policy, the amount we would have to pay in deficiency payments would probably cost more than the CAP does, because of the amount we would have to put on in levies to protect British agriculture and to prevent it from returning to something like its position in the 1930s, which my hon. Friend would not wish.

Having achieved so much, the effect of having a row would have been to have gone back to Hanover and not been able to get the Fontainebleau mechanism but to have something much more damaging to this country. What we have now is what we have wanted for a long time. We have legally binding and enforceable regulations, stabilisers on agricultural products, which will deal with the surpluses, and a mechanism of writing down and disposing of the surpluses that will get rid of existing surpluses by 1992.

Dr. David Owen (Plymouth, Devonport)

Could not the Prime Minister better achieve her negotiating position if she admitted that she had not achieved all her objectives, not even 95 per cent. of them, but that she had achieved the best deal available in the circumstances and that she will compromise no further? Does she believe that next week the French intend to reopen the eight other commodity stabilisers that have been agreed previously? If they do, I am sure that she will be supported by all hon. Members if she resists it totally.

The Prime Minister

It will come as no surprise to the right hon. Gentleman to find that I do not quite agree with him. We did very well in getting the price reductions on cereals to an extent greater than at Copenhagen and against the wishes of the Germans, who were not prepared to have so many price reductions. The Germans also compromised on having considerable price reductions without a ceiling on oil seeds, which affects them very considerably. I should have liked to have got away with a smaller increase on the structural funds. However, we decided, I think rightly, to give special aid to Portugal because it is the poorest country and one of our oldest allies. I think that we achieved a good deal for Britain, and a good deal for Europe.

Mr. David Curry (Skipton and Ripon)

Does my right hon. Friend agree that the overwhelming interest to the United Kingdom in the Community is the pursuit of the genuine internal market? Does she agree that the compromises she made, however reluctantly, are an important contribution to that? Will she also resolve that she will not listen to the carping of the Labour party, whose defence of British interests in opposition is always more effective than when it is in government, as is shown by its last farcical renegotiation?

The Prime Minister

I think that we achieved a settlement on agricultural matters at Brussels of the sort we achieved on our abatement at Fontainebleau three years ago. That will hold until 1992 when, once again, we will have to look at our own mechanism. [column 716]

I take the view that we ought to have made more progress towards the internal market. We have been pressing for that. It is an objective independent of the CAP and in the treaty. Some of the people who proclaim that they believe in full open markets are not always ready to do so when we say, “You get down your lorry quotas, you allow our insurance people to sell in the Common Market, you allow us to have a freedom of movement in services such as that on manufactured goods.” It is vital that we go ahead with that. It would be to the advantage of this country.

Mr. Stuart Bell (Middlesbrough)

Will the Prime Minister accept that we welcome a reasonably prosperous farming community? That being the case, why has she not been as generous to British nurses as she has been to French and German farmers?

The Prime Minister

As the hon. Gentleman is aware, we have been very generous to British nurses, more generous than any other Government at any time—[Interruption.] I was just waiting to see how far we would be in order in going on with that the whole catalogue. The Labour party gave nurses, doctors and the National Health Service a shabby deal. They got a good deal from this Government.

Several Hon. Members


Mr. Speaker

Order. I shall seek to take into account during the debate this evening those who have not been called to ask a question on the statement.

Mr. Orme

On a point of order, Mr. Speaker. In reply to an earlier question, the Prime Minister referred to the meeting with the Taoiseach and the Anglo-Irish Agreement. That had nothing to do with the Common Market negotiations. She made a statement to the House that we were not able to question. Therefore, I call on you, Mr. Speaker, to protect hon. Members and to ask the Prime Minister to make a separate statement on that issue.

Mr. Speaker

I anticipated what the right hon. Gentleman wished to say. Of course, until an hon. Member asks a question I do not know what he is going to say. As the Prime Minister stated, she had a meeting with the Taoiseach during the negotiations and she answered the question.

Mr. Hugh Dykes (Harrow, East)

On a point of order, Mr. Speaker. You got the support of the House earlier when you yet again exhorted the hon. Member for Bolsover (Mr. Skinner) not to keep shouting. However, immediately after your request to him he shouted out that it was official Labour party policy to withdraw from the Community. Therefore, would you guide us, Mr. Speaker, on whether official policy comes from above or below the Gangway?

Mr. Speaker

One of the problems faced by the occupant of the Chair is that the microphones are tuned so that when I listen to a right hon. or hon. Member from the Government Benches I do not always hear, thank goodness, what is said from the Opposition Benches.

Mr. Shore

On a point of order, Mr. Speaker. Further to the point made by my hon. Friend the Member for Newham, South (Mr. Spearing), the background to this inevitably complex and difficult statement—the EEC communiqué—was not available in the Library up to 3.30 this afternoon. That is a disgraceful oversight. As [column 717]there are Ministers present—not only the Prime Minister herself but Ministers from the Foreign Office—I hope that we shall hear that that sort of treatment will not be meted out to the House again.

The Prime Minister

If that was the case, I apologise sincerely. I thought that the communiqué had been placed in the Library in the normal way. I assumed that it was available and that, if it was not, right hon. and hon. Members would have let me know. If they will do that in future, we will certainly ensure that the documentation is there in good time so that right hon. and hon. Members can study it.

Mr. Dennis Skinner (Bolsover)


Mr. Speaker

Order. I will not take further points of order that are a continuation of the statement.

Mr. Skinner

It is not a continuation.

Mr. Speaker

I was pretty certain that it would be.

Mr. Skinner


Mr. Speaker

Order. The hon. Gentleman would be the first to complain if he were cut out of a debate as a result of points of order that were a continuation of questions on the statement. I have——

Mr. Skinner


Mr. Speaker

Order. The hon. Gentleman must resume his seat.

Mr. Skinner


Mr. Speaker

Order. The hon. Member must resume his seat.

Mr. Skinner

Anybody else bar me.

Mr. Speaker

Order. The hon. Gentleman gets called in the same way as every other hon. Member.

Mr. Skinner

On a point of order, Mr. Speaker.

Mr. Speaker

I am not taking a point of order unless it has nothing to do with the statement.

Mr. Skinner


Mr. Speaker

Has it anything to do with the statement?

Mr. Skinner

It is to do with what the hon. Member said.

Mr. Speaker

Which hon. Member?

Mr. Skinner

You will recall, Mr. Speaker, that the hon. Member for Harrow—[Interruption.]—yes, without an “H” ; that is what they say where I come from. The hon. Member for Harrow, East (Mr. Dykes) said that I made an intervention regarding official Labour party policy on withdrawal from the Common Market. I want to place on record that that is the case and that the official Labour party policy is for withdrawal from the Common Market as the last option. It would be handy if that went into Hansard.

Mr. Speaker

Order. That is one of the reasons why the hon. Gentleman wanted to get himself mentioned during his sedentary comments; normally that would not go into Hansard.