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1990 - Commons Statement on the European Council in Rome - 18th December 1990

Below is Mr Major's statement on 18th December 1990 made in the House of Commons on the Rome European Council.

THE PRIME MINISTER

The Prime Minister (Mr. John Major): With permission, Mr. Speaker, I shall make a statement on the European Council in Rome on 13 and 14 December, which I attended with my right hon. Friend the Foreign and Commonwealth Secretary. The Council's conclusions have been placed in the Library of the House.

After the Council itself, I attended a formal joint opening session of the intergovernmental conferences on political union and on economic and monetary union. That was followed by a short working session of each conference, attended respectively by my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. Those meetings were mainly formal and procedural. The conference will start in earnest in January.

Five main subjects were dealt with by the European Council, the first being political union. On that, the Council reached agreement on a long list of items which are to be considered--and that is the operative word--at the intergovernmental conference on political union. The list includes Britain's proposals for closer co-operation on foreign and security policy, better implementation of Community decisions, a role for national Parliaments in the affairs of the Community, better financial accountability and observance of the principle of subsidiarity. Other countries have also added items to the list. Some of them we welcome ; others, frankly, are less palatable.

The key, so far as Britain is concerned, is that the issues have simply been put on the table for discussion. None are agreed. All are for consideration. The conclusions of the Council do not constrain or prejudge the intergovernmental conference's decisions, which have to be reached by unanimity. One of our principal objectives in Rome was thus satisfactorily achieved.

The second main item was assistance for the Soviet Union and eastern Europe. The Community's aim is to support the economic reforms which President Gorbachev and the Soviet Government are introducing, and to help the Soviet Union make proper use of its own resources. We therefore agreed to make available technical assistance to particular sectors of the Soviet economy, and notably to food distribution. We also endorsed the aim of energy co-operation, in which Britain is particularly well placed to play a part. To meet the Soviet Union's short-term needs, the Community will provide substantial food aid.

My right hon. Friend the Foreign Secretary and I stressed that there should be guarantees that the food actually reaches those for whom it is intended, and does not undermine attempts to make Soviet agriculture more responsive to the market. Those points are reflected in the Council's conclusions. The Council also recognised the particular difficulties being experienced by eastern European countries as they make the transition to democracy and a market economy, while coping simultaneously with sharp increases in oil prices and the change to hard- currency trading. The Community will contribute, along with other western countries and the international financial institutions, to meeting their financial requirements. It will also provide emergency aid to Bulgaria and Romania, in the form of food and medicines.

Thirdly, the Council discussed the general agreement on tariffs and trade negotiations. It called on all parties to show the necessary political will to reach a satisfactory agreement, and asked the Commission, as the Community's negotiator, to be in touch with other participants, in order to resolve remaining problems. That refers to agriculture in particular.

We thus achieved another of our main objectives--to ensure that Heads of Government dealt fully with the difficulties in the GATT negotiations and gave a strong signal of the Community's resolve to see a successful outcome. I hope other countries will show themselves no less willing to make progress.

Fourthly, the Council dealt with the situation in the Gulf, and agreed an admirably firm statement. That shows the Community as firmly committed as ever to ensuring Iraq's complete withdrawal from Kuwait and the restoration of the legitimate Government. The statement makes particular reference to Security Council resolution 678, which envisages the possible use of force if attempts to resolve matters peacefully have not succeeded by 15 January. The Council's discussions made it clear that the Twelve do not accept any linkage whatsoever between Iraq's withdrawal from Kuwait and progress on other middle eastern issues. Saddam Hussein must not gain from his aggression.

Lastly, the Council welcomed the changes which President de Klerk has, with Mr. Mandela, brought about in South Africa. It also decided to lift with immediate effect the voluntary ban on new investment in South Africa. That is a step which Britain has been urging for many months. I know the decision will be most welcome to Conservative Members. The Community is committed to lift other restrictive measures as soon as the South African Government take certain additional steps, which they have already promised to do. I underline the importance of that move by the Community, which will encourage further reform and political progress in South Africa. I hope that Europe's example will rapidly be followed by others.

For the sake of completeness, I should make two further points. First, the European Council reaffirmed its determination to complete the single market on time. Secondly, the Council did not discuss economic and monetary union on this occasion. But my right hon. Friend the Chancellor announced that we shall very shortly table draft treaty amendments to give effect to Britain's proposals for a hard ecu and a European monetary fund.

The Council was marked by a positive and co-operative spirit--despite some subsequent remarks--and by a willingness on the part of all member states to work for solutions which will enable us to go forward as Twelve. There is no doubt that there will be difficult discussions ahead in both the intergovernmental conferences : it would be foolish to deny that, for it is self-evidently true. But the Government's aim will be to work for agreements which are acceptable to this House, and match both Britain's interests and those of Europe as a whole. We made a good start to that end in Rome.

Mr. Neil Kinnock (Islwyn): I thank the right hon. Gentleman for his statement. I welcome in particular the summit decisions to provide food aid for the Soviet Union and to take initiatives in creating more effective long-term economic and political relations between the European Community and the Soviet Union, and to build new and closer relations with the recently freed countries of eastern and central Europe.

We further welcome the Council's declaration of continued further commitment to full implementation of all United Nations Security Council resolutions to secure the withdrawal of Saddam Hussein's forces from Kuwait. There is widespread concern about the failure of the GATT round, so can the Prime Minister tell the House whether he felt that the summit discussions that he has just reported were substantial, and whether he thinks that they will lead to any significant reforms of the common agricultural policy?

The change in the tone of the Government's approach that was evident at the summit is welcome. Will the Prime Minister tell the House what changes of substance there have been in the Government's position? Does the Prime Minister continue in his opposition to the extension of majority voting to those decisions where it would help to improve social policy and to raise environmental standards? The summit communique, which the Prime Minister accepted, includes a commitment to press ahead with, and to speed up, the social charter action programme.

Does the Prime Minister now support that charter, or will he continue the Government's outright opposition to it? Does the Prime Minister consider that his proposals for the hard ecu are the quicker route to a single currency, as was said by the Financial Secretary to the Treasury ; or a possible route, as the right hon. Gentleman himself said ; or an alternative to currency union, as was said by the Chancellor of the Exchequer? In view of the fact that the Government have completed draft treaty amendments on economic and monetary union, will the Prime Minister make them available to the House before they are tabled at the intergovernmental conference?

Will the Prime Minister confirm that he withdrew all the reservations expressed by the Government at the last Rome summit in October, but that he also expressed the view at the latest summit that he intends to make no radical modifications to the Government's existing policy towards the European Community? Therefore, will the right hon. Gentleman kindly tell the House exactly where he does stand? Or is he waiting to see how long he can sit on the fence, with pleasantry in place of policy?

The Prime Minister: I am grateful to the right hon. Gentleman for his words about the agreements reached on food aid for the Soviet Union and for eastern Europe, and for his robust support of the Security Council resolutions on Kuwait.

I confirm that there were substantial talks on GATT between the Heads of Government, and that some considerable time was spent on them. There was a general acceptance of the importance of reaching agreement, and a willingness to do so. Our negotiators have clear instructions to use all the negotiating remit they have to reach an agreement--although there is expectation that that will require movement by others, as well as by the European Community. The common agricultural policy is not directly related to the GATT discussions, but there was some discussion about the way in which it is working at present, and some private thought that we may need to review it and to consider what changes need to be made.

So far as the substance of policy is concerned--the right hon. Gentleman mentioned qualified majority voting in particular--we are not persuaded that a case has been made for qualified majority voting. Clearly, we will have to examine what comes before us, but I must tell the right hon. Gentleman that, at the moment, we are not persuaded that a case has yet been made.

On the social charter, what we have said--and what I acknowledged in the discussions that we have had--is that there is a social dimension to the European Community, not least in terms of employment, but that the provisions in the social charter are not generally provisions that we believe to be correct. Our present position on the social charter is as it was some months ago.

On economic and monetary union, the hard ecu remains--as it always has been --a possible route to economic and monetary union. That depends on it being driven by the market and on the choices of Governments, companies and individuals. As to speed, that of course depends on the individual choices exercised--if exercised--by those Governments, companies and individuals. But it is a potential and secure route without many of the risks that we think are attached to the alternatives before us.

I undertake to lay before the House the draft changes that we propose for economic and monetary union at the same time as we present them to our colleagues in Europe. When they are ready, we shall do that.

On our present and future position, we will resolutely support what we perceive to be the British interest in the Community, but we shall do that in the context of trying to build collectively with our partners a better Europe for all of us.

Several Hon. Members rose --

Mr. Speaker: Order. We have a busy day ahead of us, including a ten-minute Bill and opposed private business at 7pm. I will allow questions on this important matter to continue until 4.30pm. The number of hon. Members I am able to call will depend on the brevity of their questions.

Sir Bernard Braine (Castle Point): I warmly congratulate my right hon. Friend on his positive contribution to the discussions, but did he really get the impression that the Twelve are now back on track and are planning for the future of all democratic Europe? Was any real progress made in co-ordinating policies designed to bring the newly emancipated and long-oppressed countries of Poland, Czechoslovakia and Hungary into genuine partnership with the rest of us?

The Prime Minister: There was discussion about that, and we hope that the preliminary steps towards the widening of Europe--the association agreements presently being examined--will come forward for agreement at an early date.

Mr. Paddy Ashdown (Yeovil): I congratulate the Prime Minister on his performance in Rome and I welcome his decision to ditch all his predecessor's rhetoric and prejudice against Europe. But surely he realises that soft words will not hide the necessity for hard decisions yet to come. The difference that now isolates the Government from every other country in the EC is the difference between "could" and "will". He says that we could have a single currency ; they say that we will have a single currency. Surely we cannot allow Britain to be isolated from Europe on that matter. Does he not agree that it is time that Conservative Back Benchers began to realise that the change of style on Europe over the weekend will inevitably and logically lead to a change of substance on Europe in the months to come?

The Prime Minister: I entirely agree with what the right hon. Gentleman said about there being hard decisions to come ; I made the same point a few moments ago.

It is no longer the case that it is only the United Kingdom that has considerable reservations about the plan for economic and monetary union which is before the Community. Alternative plans are being brought forward by a number of other Community countries, and quite a few robust and worthwhile criticisms were made of plans which were previously unchallenged. The United Kingdom has for a long time set out its reservations about what has become known as the Delors plan, drafted by that committee, and they relate to matters concerning this House and to the economic circumstances under which any move to a single currency would be satisfactory. Those underlying economic circumstances are an unchanging reality which we shall continually bear in mind before any moves are made.

Mr. David Howell (Guildford): My right hon. Friend has entered into the debate about the best form of European Community for the future with great skill and he deserves to be warmly congratulated. Does he agree, on political union, that it is not a matter of going slower or faster towards the so-called goal of a collectivist, centralist, federal European union, but of ensuring that we instead move towards a Europe which is based on proper constitutional principles of a looser confederal kind, and that that is the kind of Europe that will win many friends throughout the Community? Does my right hon. Friend accept that he has made an excellent start in winning some of those friends for a Europe of the future which meets the democratic principles in which we believe?

The Prime Minister: I am grateful to my right hon. Friend. I can confirm without equivocation that we remain opposed to federalism in the context of a federal European Government. Our concept of political union is clear : it is one of ever closer co-operation and working together between the member states of the Community while preserving their national parliaments, Governments and traditions. It is not a centralised European super-state.

Mr. Peter Shore (Bethnal Green and Stepney): In the light of this vast and unappetising menu of proposals for political union and for economic and monetary union, is it not clear that what is being discussed at the intergovernmental conference is every bit as important as the treaty of accession to the treaty of Rome 17 years ago? That being so, will the Prime Minister arrange for the Chancellor of the Exchequer and the Foreign Secretary to report on each ministerial meeting of the relevant IGC that they attend? When the right hon. Member for Old Bexley and Sidcup (Mr. Heath) was Prime Minister, his Minister for Europe reported to the House so that it had an opportunity to contribute to the discussions as they unfolded.

The Prime Minister: I agree with the right hon. Gentleman that they are important discussions. We shall certainly report matters of substance to the House.

Mr. Hugh Dykes (Harrow, East): Would my right hon. Friend accept the congratulations of all parts of the House on achieving a notable change of style as well as of future substance in the negotiations, thereby showing that we are psychologically committed, as are the other 11, without reducing our negotiating strength in future complicated discussions? It is normal that there will be objections from all sides to various elements of the plan. Will he say more about plans to bring the European Parliament into more contact with national parliaments, working together for an integrated future and a united Europe?

The Prime Minister: I am grateful for my hon. Friend's earlier remarks. In our discussions with our European partners, we have made it perfectly clear that, just as to some extent the European Parliament has had a direct interest in legislation in this House, so we should not overlook the importance of what this House does to the European Parliament. We have identified particular areas over which it would be appropriate for the European Parliament to have extra powers. They are not extra legislative powers but extra powers of control over the Commission and over financial accountability within the Community.

Mr. Giles Radice (Durham, North): Will my right hon. Friend accept that the Government's changed style on Europe is welcome but that the question remains : how far has the substance changed? Are the Government now committed in principle to a single currency and a European bank?

The Prime Minister: The hon. Gentleman knows the position perfectly well, for we set it out clearly last June, when I first introduced our proposals for a parallel currency that could develop into a European currency. We need to see to what extent it is accepted and to what extent it works over a period. There is no point in committing ourselves to a principle until we have some experience of whether it is worth while and will work.

Mr. William Cash (Stafford): Acknowledging the important contribution that my right hon. Friend made to the atmosphere at the Rome summit which contributed to the fact that we ask questions now rather than making decisions on the presidency's conclusions, does he agree that it is wrong to go ahead with the proposals for a central bank, which would pull the consent from under the feet of the British electorate and which would be economic defeatism of the first order and ensure that the people of this country no longer had control over the economic and social priorities that they have chosen in general elections?

The Prime Minister: As I said a few moments ago, we did not discuss economic and monetary union over the weekend, but the matters to which my hon. Friend has drawn attention are the substance of the intergovernmental conference that will deal with them.

Mr. William Ross (Londonderry, East): The statement mentioned food aid to Russia. Surely it is not really food aid that Russia needs but a method of distributing it once it is inside Russia. What steps can the right hon. Gentleman and the Community take to ensure that such distribution takes place?

The Prime Minister: The hon. Gentleman is entirely right that it is a question not only of food aid but of ensuring that any food aid that reaches Russia is properly distributed to the people who are in need in the Soviet Union. We propose to meet that by using some of the resources that will be available under the technical assistance sums that we granted over the weekend. We are determined to ensure, as far as we can, that the food reaches the people who are in need and for whom it is intended.

Sir Anthony Meyer (Clwyd, North-West): Is my right hon. Friend aware that even those among us who believe that further pooling of sovereignty will be in this country's long-term interests none the less welcome his step-by-step approach, and warmly applaud his success in finding allies among the EC Governments for the attainment of British objectives?

The Prime Minister: I am grateful to my hon. Friend. In many of the complex matters that will come before the Community in the next few years, the views of different member states will be complex and will often overlap with ours. I certainly believe that, wherever we can, we should build up our alliances to achieve the result that is right for this country and for Europe.

Mr. Jack Ashley (Stoke-on-Trent, South): Although I welcome emergency aid to the Soviet Union and to eastern Europe, will the Prime Minister bear in mind the fact that 20 million people are facing starvation in Africa, and that that emergency aid should not be allowed to divert attention from the catastrophes affecting the developing world or to divert funds, which they are giving in inadequate amounts to such countries?

The Prime Minister: I quite agree with what the hon. Gentleman has said, especially about the difficulties in the horn of Africa. It is likely that my right hon. Friend the Minister for Overseas Development will make a statement about that before long.

Sir Geoffrey Finsberg (Hampstead and Highgate): Is my right hon. Friend aware that, two or three weeks ago, there was an assize in Rome, attended by individuals from national parliaments, and from the European Parliament, and that that body reached conclusions which represented the opinions of no one, but those individuals? As that body has decided to make representations to the IGC, will he treat the representations for what they really are--phoney, flawed and fallacious?

The Prime Minister: I am grateful to my hon. Friend for his clear clue to how we should deal with any representations that come from that quarter.

Mr. Nigel Spearing (Newham, South): Does the Prime Minister recall that, when the Single European Act was presented to the House--with all its far-reaching implications, its defects and surprises--it was adopted by his party? Therefore, would it not be wise for the proposals contained in the Rome communique and their implications for the United Kingdom to be fully investigated by the House, with all the means at its disposal? Would not a failure to do so from now onwards constitute a democratic deficit in the area of Westminster?

The Prime Minister: The House has had a number of opportunities to debate these matters. As to whether there will be more, that is a matter for my right hon. Friend the Leader of the House. As the hon. Gentleman will know, because of his experience in these matters, at the time of the Single European Act there was a large menu of possibilities for it, many of which were unsatisfactory to us, and which were gradually whittled down in the negotiations on the Act. Precisely the same may occur this time.

Mr. Ian Bruce (Dorset, South): My right hon. Friend will know that the original proposals in the social charter have, under the influence of the Government and others, changed enormously since they were first tabled. Does my right hon. Friend believe that our partners will eventually come round to the British view that over-regulation of hours and conditions of working are the wrong way to go, and that we should be opening up the labour market?

The Prime Minister: I certainly share the view that my hon. Friend has just expressed. As I said earlier, there has been no question of a change of course in terms of our views on the social charter. I shall continue to represent that view in Europe.

Mr. Robert Sheldon (Ashton-under Lyne): Is it not clear that one of the most important aspects of these discussions should have been the completion of the GATT round? That is a problem here and now, unlike economic and political union, which is for some time in the far distant future. Is it not also clear that Jacques Delors, when he talked about the crisis within Community countries, was clearly missing the point--that the crisis concerns the role of the President of the Commission himself?

The Prime Minister: We certainly do need to complete the GATT round, but that clearly could not have been done at the European Council, because the negotiating partners were not there. What was agreed absolutely at the Council was the existence of two clear, unmistakable signals : first, that the European Community wanted a successful outcome to the GATT round, and, secondly, that its negotiators--Mr. Andriessen and Mr. MacSharry--were to go back and discuss the content of the GATT round with others, with the intention of reaching a satisfactory conclusion. That was felt strongly by all the Heads of Government who were present.

Sir Michael Marshall (Arundel): May I return to the question of food and, I trust, other emergency aid from west to east? Does my right hon. Friend accept that the military forces of both west and east possess spare capacity in regard to transportation, medical supplies and the whole infrastructure of communications? Will he use his good offices to harness that side of our resources, as well as civil resources, to ensure that aid goes to those who really need it--as he said earlier that it should?

The Prime Minister: That last point is clearly critical, as my hon. Friend has pointed out. We are at present examining both the priorities and the channels for the disbursement of food, and have asked the Commission to engage in a similar process. Whether that will extend beyond the civil authorities is currently unclear, but I shall bear in mind what my hon. Friend has said.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): Will the Prime Minister make clear the position relating to food aid and other support for the Soviet Union? Is it distinctly dependent on the personal position of President Gorbachev, or will aid be given irrespective of personal positions in the Soviet Union?

The Prime Minister: The issues have not been particularly tied, although everyone will acknowledge that President Gorbachev has made remarkable changes in the Soviet Union over recent years. Given the difficulties he faces, and the difficulties experienced by so many in finding food in the Soviet Union, we felt that it was right for us to help, and I think that that view was universal.

Mr. Ian Taylor (Esher): Does my right hon. Friend accept that the fact that the weekend brought emotional reactions from both Jacques Delors and Woodrow Wyatt suggests that his tactics during the Rome summit must have been right? Does he agree that those tactics--which included stressing what we have in common with our European partners, rather than stressing our differences--have been confirmed as likely to build a better future in the Community? In particular, has he noted that the French are moving in his direction, in that they wish to reform the various institutions of the Community but to retain the present institutional balance? Is that not a welcome development?

The Prime Minister: I agree that it is welcome. Part of the business of building the sort of Europe that we wish to see is ensuring that its institutions are both effective and efficient, and there is still a considerable amount of work to be done in that regard.

Mr. Jim Sillars (Glasgow, Govan): Will the Prime Minister explain what he meant by

"observance of the principle of subsidiarity"?

Will he give us some concrete examples of the allocation of key governmental functions between national Parliaments and Community institutions? Who does he think should make the decisions on allocation?

The Prime Minister: The principle of subsidiarity is clear : things should not be done at Community level which can be better done at national level.

Sir Richard Body (Holland with Boston): In Rome, did my right hon. Friend take the opportunity of explaining to the other 11 members of the European Council that the common agricultural policy cost the average British family £16 a week last year, and is likely to cost them £20 a week this year?

The Prime Minister: The detail of the common agricultural policy was not central to our agenda. There was some discussion in private, however--not in the European Council--and I think that there is a general recognition in the Community that the CAP will bear further investigation.

Mr. Ron Leighton (Newham, North-East): When he considers the establishment of a single currency, will the Prime Minister bear in mind the fact that the exchange rate mechanism is the embryonic first stage of such a currency, and that within weeks it has done grave damage to the country? The domestic economy is crying out for a cut in interest rates, but, because the uncompetitive nature of the British economy means that the pound is now bumping along in the lower band of the ERM, such a cut cannot be made. The Chancellor is saying that his overriding priority is to maintain an untenable exchange rate. Would a single currency lock us into that unsatisfactory position in perpetuity?

The Prime Minister: The exchange rate mechanism is not necessarily the first step to a single currency, as the hon. Gentleman is perfectly well aware. I reiterate what I said a little earlier--that the purpose of Government economic policy is to bring down the rate of inflation, not to replace inflation today with inflation tomorrow by a premature and unwise movement on interest rates.

Mr. Ralph Howell (Norfolk, North): Bearing in mind the heavy price that the Soviet Union is paying for holding down food prices to 1945 levels, will my right hon. Friend totally reject the advice that he has just received from the hon. Member for Holland with Boston (Sir R. Body) who constantly undermines British agriculture and Europe in general?

The Prime Minister: I hear with some interest what my hon. Friend says. This is a matter that might best be settled privately in the back room.

Mr. James Lamond (Oldham, Central and Royton): When the Prime Minister spoke of sending our negotiators back to the table at the GATT negotiations with a view to making progress, surely he cannot intend that we weaken even further our attitude towards this country's clothing and textile industry, which is already suffering from the fact that the European Community is supposed to deal with matters relating to dumping, but never gets round to doing so? The textile industry has already conceded enormous benefit to developing countries and is in a state of crisis at the moment. Surely nothing can be done on that side of the negotiations to enable further progress to be made.

The Prime Minister: As the hon. Gentleman knows, the area that primarily restricted progress in the GATT talks was not the area to which he has referred ; it was agriculture. A negotiating remit was available to the Commission. We have agreed that it should be fully utilised and we think that, within that, it will be possible to find an agreeable settlement with our other partners in the GATT round.

Mr. Ivan Lawrence (Burton): Will my right hon. Friend take the President of the European Commission quietly to one side and explain to him that the British people do not react well to threats and that, if he wants to ensure our co-operation and our £6 million a day contribution towards the funds of the European Community, he had better control his irritation at the fact that my right hon. Friend is making friends and influencing people?

The Prime Minister: I am grateful to my hon. and learned Friend, and I am sure that his comments will be noted throughout Europe. Our principal concern in all the negotiations is to ensure that, at their conclusion, there is a sensible agreement that is satisfactory and right for this country.

Mr. Stuart Bell (Middlesbrough): Can the Prime Minister confirm that, in the context of political union, there is to be a debate on defence matters? How will that leave our position in NATO? Will he confirm that NATO is the bulwark of our European defence policy? How will that debate affect our special relationship with the United States, and where will it leave the Western European Union?

The Prime Minister: There was a very satisfactory discussion on that in NATO yesterday, but there was general agreement among all the European partners about the absolute primacy and importance of the NATO Alliance. It is worth considering how the Western European Union can itself be built up as a European bulwark of the NATO Alliance.

Mr. Quentin Davies (Stamford and Spalding): Will my right hon. Friend accept the many congratulations that he has received this afternoon on a remarkable triumph of personal diplomacy in Rome? His talents in that area will be a great national asset in the months and years to come. Does my right hon. Friend agree that the anti-inflationary teeth of the hard ecu proposal represent the best possible mechanism for achieving convergence of the Community economies on a low inflation rate, which is an aim that all of us in the Community must surely have in common, with the possible exception of the British Labour party?

The Prime Minister: My hon. Friend is entirely correct, especially on the last point. The hard ecu proposal that we have produced would be the most anti-inflationary currency that Europe has ever seen.

Mr. Michael J. Martin (Glasgow, Springburn): On the question of food surpluses from the EEC, has the Prime Minister had the opportunity to look at last night's edition of the Glasgow Evening Times, which reported that hundreds of people queued outside an unemployment centre to get free mince, stew and butter? One unemployed man was heard to comment, "My youngest is 17 months, and this comes in handy for Christmas." If the EEC is going to distribute food, surely it should do so in a more dignified manner.

The Prime Minister: I am not entirely sure that people in Moscow and elsewhere, who have no food and empty shops, would entirely agree.

Sir Peter Hordern (Horsham): Does my right hon. Friend accept that, for many people, the breakdown of the GATT negotiations was far more important than the discussions on a single currency? Does he further accept that, without fundamental reform of the common agricultural policy, there is a risk of mounting recession and trade war?

The Prime Minister: I certainly agree with my hon. Friend on the importance of the GATT talks. I share his view that we must reconsider how the common agricultural policy works. It is not the most efficient way to help farming, although in areas of this country and elsewhere help on social and other grounds will be necessary.

Mr. Alan W. Williams (Carmarthen): In those discussions on reform of the common agricultural policy, will the Prime Minister and the Government agree with proposals reportedly being considered by the European Commission that the CAP should be phased out and replaced with a policy based on environmental protection and direct income aid for small farmers?

The Prime Minister: No such proposals on reform of the common agricultural policy have been made. The Commission has said that it is committed to bringing forward proposals and measures to accompany the Community offer in the GATT talks. Those proposals may be less radical than has been suggested in some newspaper reports that I have seen, but the key to reform of the common agricultural policy, as my hon. Friend the Member for Horsham (Sir P. Hordern) made clear a moment or so ago, remains a successful conclusion of the GATT round, and we are working to achieve that.

Mr. Teddy Taylor (Southend, East): As one of the few specific matters of agreement on this proposal relates to the approximation of the VAT system and excise duties to complete the internal market, and as the agreement particularly said that proceedings have to be completed in the near future, will my right hon. Friend say when the House of Commons and the people of Britain will be told what is involved, because there was unanimous agreement that those proceedings would be completed in the near future?

The Prime Minister: In no sense have we agreed to approximation of VAT rates. We have expressed long-standing opposition to that on a variety of grounds, as my hon. Friend knows. Nothing that was said or done in the European Council this weekend has changed that.

Mr. Harry Ewing (Falkirk, East): The Prime Minister referred to the unanimous decision to support the use of force in the Gulf. Apart from Britain and France, how many of the other 10 member states have ground forces stationed in the Gulf? Are those countries supporting the United Kingdom and France in a war in which they are not prepared to take part?

The Prime Minister: The ground forces, as the hon. Gentleman says, are predominantly British, which are substantial, as well as French forces. Several of our Community partners have naval and, in some cases, air representation there as well.

Mr. James Arbuthnot (Wanstead and Woodford): Does my right hon. Friend agree with Mr. Delors that the United Kingdom, which has expressed reservations about EMU at the highest possible level, has a better right than some other countries to propose a counter-draft? Does he believe that his proposal of the hard ecu is steadily gaining ground?

The Prime Minister: We certainly shall propose a counter-draft, which is in the course of preparation, and I hope that we shall be able to make it available in early January if work continues as satisfactorily as at present. We have a perfect right to put it forward, and I am pleased that others are seeking to do the same ; it will add to the success of the debate.

Mr. Dennis Skinner (Bolsover): Is the Prime Minister aware that some of the oldest nation states in the world are in western Europe and that they have signed hundreds of treaties between them in the past 10 centuries, most of which finished up in the dustbin? With the Rome treaty, which is based on the free movement of capital and labour and which has so many contradictions, we are reaching the point where decisions will have to be made. Is he aware that the British people do not want a single currency or a central bank dominated by the Germans?

If he takes note of what the British people are saying, he will refuse the accolades of Conservative Members to go further down that Common Market road. One thing is certain : political union will not mean that somebody with a name like Herr von Baron Straushauser will stand for Labour in Bolsover. That will be the end of that.

The Prime Minister: Party politics aside, I have no doubt that somebody by the name of Skinner will represent Bolsover at least until the general election. There may well be contradictions in the free market, but there is chaos in the sort of managed market that the hon. Gentleman and some of his hon. Friends would wish upon us.

Mr. Patrick Nicholls (Teignbridge): Does my right hon. Friend accept that his achievement in persuading our partners in Rome that we want to be participants and not merely observers is significant? Is it not one of the consequences that many of the smaller EC countries that would privately have agreed with a number of our positions will now be more public in making that clear? Does that not mean that the candidate for isolation will be not the United Kingdom but the President of the Commission? Those centralist, socialist ideas have the whole-hearted support only of the British Labour party.

The Prime Minister: It is certainly true that we want a liberal, open-market economy, and that is what we propose to work for. The closer we get to the difficult decisions which need to be taken on economic and monetary union, the more the difficulties of a centralised, prescriptive approach become apparent and the more the attractions of a pragmatic step- by-step approach, with experience gained on the way before making the final decisions, can clearly be seen.

Mr. Robert Hughes (Aberdeen, North): As the Prime Minister has described his approach in the EC as considered and thoughtful, why was caution abandoned in respect of sanctions against South Africa? Why did the EC specifically rebuff Nelson Mandela's request that sanctions should continue for a while, at least until President de Klerk delivers on his promises? Has the Prime Minister no conception of the perils and dangers for the peace process in South Africa? Is he aware that constantly saying that he is rewarding de Klerk makes the process much more difficult? If that country falls into chaos, the right hon. Gentleman and his Government will have a heavy responsibility to bear.

The Prime Minister: I could not disagree more. Discussions on this matter have been going on for 10 months or so. The hon. Gentleman referred to President de Klerk delivering his policies. I remind him that Mr. Mandela has been released, political parties have been unbanned, agreement with the African National Congress to phase the release of other political prisoners and the return of exiles has been achieved, abolition of the state of emergency has been achieved, the Separate Amenities Act has been repealed, the moratorium on executions and reform of the death penalty have been achieved and a series of further promises has been sought. Does the hon. Gentleman wish to put such a block on future events that we cannot move forward? That would be the outcome of following his policy.

Mr. Andrew Rowe (Mid-Kent): My right hon. Friend will be aware of the enthusiasm for the idea that the level playing field, which the European Community is supposed to establish, should work. I very much welcomed his statement that sanctions were being considered against countries that did not honour their pledges. Would he like to spell out a little more his hopes and proposals in that sphere?

The Prime Minister: We shall certainly lay down some detailed proposals at the IGC. First, we intend that there should be much closer accountability of countries so that we can check, through the Commission, on how many European pieces of legislation they are enforcing. Secondly, we are concentrating on having a fining procedure for those countries that repeatedly accept legislation but blatantly do not implement it.

Mr. Tam Dalyell (Linlithgow): Would not the candid answer to my hon. Friend the Member for Falkirk, East (Mr. Ewing) be that 10 nations of the Community will have no truck with committing land forces? What was said in Rome about the proposed meeting with Tariq Aziz? Why do we oppose it? If the Prime Minister is going to visit the forces--I should welcome that-- should he not also call in on the Yemen to hear what its people have to say and Jordan to hear what they have to say and perhaps discuss with Felipe Gonzales and others the possibility, given the horrendous human and ecological consequences of using the military option, of swallowing his pride and paying a visit to Baghdad?

The Prime Minister: With great respect to the hon. Gentleman, I do not believe that that would be helpful. The Community leaders, without exception, were perfectly clear in setting out in the clearest possible terms their condemnation and abhorrence of Iraqi actions. Again without exception, they demanded Iraq's complete, immediate and unconditional withdrawal from Kuwait by 15 January. They are perfectly well aware that, if there is to be peace, it is in the hands of Saddam Hussein. It is for him to withdraw. It is he who blatantly and without any just cause invaded an adjacent country and occupied it, and has steadily been dismantling it day by day. The international community should not, could not, and will not stand by and see that happen.

Sir Jim Spicer (Dorset, West): The Baltic republics of the Soviet Union were forcibly incorporated into the Soviet Union in 1940. Does my right hon. Friend agree that a particular status should be afforded to those four republics in technical and food aid?

The Prime Minister: That matter was not discussed during the Rome summit over the past couple of days. We were primarily concerned to ensure that a substantial amount of food aid was available at the centre and that there should be proper distribution to the many people who seem to be unable to obtain food at the moment.

Mr. Tom Clarke (Monklands, West): When the Prime Minister said, in referring to the Soviet policy on agriculture, that the advice had been given that the Soviet Union should be

"more responsive to the market",

are we to assume that the Community will offer the same advice to its member states?

The Prime Minister: The hon. Gentleman may be certain that that is so.

Mr. Nicholas Budgen (Wolverhampton, South-West): In respect of the question of substance over monetary union, may I remind my right hon. Friend what the then Prime Minister said on 30 October in her initial statement which, we understood, was approved by the Cabinet? Did she not say :

"And I again emphasised that we would not be prepared to have a single currency imposed upon us, nor to surrender the use of the pound sterling as our currency"?--[ Official Report, 30 October 1990 ; Vol. 178, c. 870.]

Can my right hon. Friend now give a clear undertaking that he will never recommend a single currency to the House?

The Prime Minister: What we have made perfectly clear, as my hon. Friend knows, is that we will examine the proposition, lay a draft treaty to the proposition of a parallel European currency and leave it, as I would have thought that my hon. Friend would have been the first to appreciate, to the market, to individuals, to companies and to Governments to decide whether to use that currency.

Mr. John Bowis (Battersea): I congratulate my right hon. Friend on his outstanding contribution to the success of the conference, and I welcome the decisions made on eastern and central Europe. Was my right hon. Friend able to express, on behalf of the people of this country, our concerns about the reality of democracy in some countries, such as Bulgaria and Romania? Was it also possible to make contingency arrangements for the situation that may be developing in Albania, where Europe may and should be asked to come to the Albanians' aid?

The Prime Minister: No, that last point was not discussed at Rome over the weekend. Clearly, the earlier concerns that my hon. Friend mentioned were there, but the principal matter under discussion over the weekend on Bulgaria and on Romania was the clear need for food and medical help there. We have, of course, arranged for that to the extent of 100 million ecu, but we have also emphasised the desirability of meeting that expenditure from existing financial resources.

Mr. Chris Butler (Warrington, South): Did the Italian Prime Minister explain to my right hon. Friend why he believes that progress towards a European super-state is irreversible? If so, how did my right hon. Friend respond?

The Prime Minister: He did not, so the question on this occasion did not arise.

Mr. John Butterfill (Bournemouth, West): May I congratulate my right hon. Friend on his robust defence of the principle that, wherever possible, decisions should be made in national parliaments rather than in Brussels? Does he agree that the principle of subsidiarity needs further defending by being incorporated in amendments to the treaties and that any dispute on that should not be referred to an undemocratic and unelected court but should be determined by a meeting of national parliaments, as has been proposed by several European Governments and by Mr. Alain Poher of the French Senate?

The Prime Minister: I can confirm that, provided that we can get a satisfactory and agreed definition of subsidiarity, we will wish to see it incorporated in the treaty.

Mr. Simon Burns (Chelmsford): I congratulate my right hon. Friend on his achievement in Rome in changing the summit so that, instead of it being 11 to one it was 12 to one and Britain was not the one.

The Prime Minister: I am grateful to my hon. Friend. I hope that we can find the United Kingdom in a position in which it takes a positive role in the development of the European Community. Of course, there will be occasions on which we hold the minority view but, provided that we are satisfied that that view is correct, we shall continue to pursue it.

Mrs. Edwina Currie (Derbyshire, South): Does the Prime Minister agree that, if his discussions with Chancellor Kohl about closer links between the British Conservative party and the CDU are successful, the effect on Europe could be dramatic? The unification of the non-socialist majority of the European Parliament could mean that more sense came out of that Parliament and that more control was exercised by it over the arrogance of the President of the Commission.

The Prime Minister: My hon. Friend is entirely right. No sensible person would want a socialist Europe.

Mr. Jonathan Aitken (Thanet, South): Is my right hon. Friend aware that his ecumenical and subtle Euro-diplomacy already seems to be producing some interesting results? Has he seen today's press reports suggesting that the Dutch and French Governments are now moving away from their alleged commitment to the Delors plan for EMU? Could that be the start of a new scenario : "Fog in Channel--Delors Isolated"?

The Prime Minister: I am not entirely sure of the weather, but it is true that some of our European partners, having examined in detail the earlier plans for European monetary union, have now begun to see some of the considerable defects in them that we observed at an earlier stage. I hope that that trend will continue.

Several Hon. Members rose--

Mr. Speaker: May I ask the two Opposition Members now standing whether they were present for the beginning of the statement?

Mr. Bruce Grocott (The Wrekin): Not throughout.

Mr. Graham Allen (Nottingham, North): The Prime Minister referred to the GATT negotiators not totally fulfilling their remit in the collapse of the GATT talks. Will he tell the House what flexibility there is within the previous remit issued to the European GATT negotiators and whether that remit needed to be and was extended at the recent meeting of Heads of Government?

The Prime Minister: The remit was not extended in the meeting of Heads of Government. The broad remit was a 30 per cent. reduction in the level of 1986 subsidies. That was not fully utilised. Indeed, nobody was asking for a bigger reduction in the GATT talks. They were asking for a redistribution within the 30 per cent., and that is a matter upon which the negotiators have room to move.

Mr. Tim Devlin (Stockton, South): Given that the majority of American troops are now being removed from Europe to the Gulf, perhaps never to return, and that the peoples of the Soviet Union and north America now look to Europe on a force for peace, security and assistance throughout the world, will my right hon. Friend and his Government give favourable consideration to the Italian proposals for a common initiative on defence, possibly including a common defence force?

The Prime Minister: I am not immediately attracted to that posture. Our main defence posture has, for a long time, been successfully within the NATO alliance, and I believe that it is in the clear interests of this country for that to remain the position in the future.

Mr. Keith Mans (Wyre): Does my right hon. Friend agree that, following the highly successful conference in Rome, it is vital that all members of the European Community continue to apply strict economic sanctions to Iraq until Saddam Hussein gets out of Kuwait and pays for all the damage that he has done and the human suffering that he has caused?

The Prime Minister: I agree with my hon. Friend. The degree of unity on that issue across Europe, and, I am glad to say, within the House, is of immense importance in that respect.

Mr. Grocott: Will the Prime Minister reflect upon the answer that he gave to my hon. Friend the Member for Aberdeen, North (Mr. Hughes) on South Africa? Does he understand that the fundamental reason why Nelson Mandela was put in gaol over a quarter of a century ago was that he was denied the basic democratic right to vote in the country of his birth because of the colour of his skin? Until progress is made on that fundamental issue, is it not unacceptable that there should be any concessions to the present South African Government?

The Prime Minister: As the hon. Gentleman will know from the list that I read out some time ago, there have been considerable movements within South Africa, which we welcome. Now the modest move has been taken of lifting the investment ban throughout the European Community. As further moves proceed in South Africa, we shall be able to make further moves towards lifting sanctions. I am sure that that is the best way to achieve the outcome that we all wish to see--a truly open and democratic society in South Africa, which moves back into the community of nations. There is no disagreement between the hon. Gentleman and me over the objective. We believe that the tactics that we are pursuing and the tactics of the European Community agreed to at the weekend are the right way to ensure that progress continues. That is surely in the interests of all South Africans.

Mr. Bill Walker (Tayside, North): My right hon. Friend and his team are to be congratulated on their performance in Rome and on the outcome. Were his colleagues in Rome made aware of the strength of feeling in the United Kingdom that Poland, the country over which we went to war in 1939 and on behalf of which we made such enormous sacrifices, should become as early as possible a member of a free, democratic nation-state Community of the type that he and Conservative Members would like to see emerge? Did his colleagues in Rome understand that we in this House do not take kindly to bureaucrats, whoever they are, issuing threats?

The Prime Minister: My hon. Friend's last point will have been noted elsewhere.

I believe that I am correct in saying that Poland already has associated membership of the Community. In due course, when it is appropriate and when Poland is in an economic position to enter, we shall be pleased to see that country join the Community.