TNAG-1297-FCO40-1652-Visit-by-Sir-Geoffrey-Howe--Secretary-of-State-for-Foreign-a-1984 — Page 233

But it cannot at this stage be claimed, putting aside what has been achie- ved, good and less good, that all the problems so far as Asian countries are concerned have as yet been solved. In principle, yes, but there is so far no commitment about the necessary financial provision.

OBJECTIVE SEVEN

Value Added Tax (VAT)

The manifesto commitment is:

"No harmonisation of value added tax which would require us to tax necessities." The proposals now being discussed in the Community are concerned with agreeing a uniform assessment base for VAT. They provide for our system of zero rating. We will be able to resist any proposals which are unaccep- table to us.

Contrary to the situation four years ago, this VAT problem of harmoni- sation is no longer a real threat. So far from harmonising, a number of countries are insisting on increasing the number of VAT rates within their own tax systems and it seems there is no danger to our freedom here at all. That was not the position four years ago.

To sum up, therefore, I believe that our renegotiation objectives have been substantially, though not completely, achieved.

I have set out at some length the outcome of the negotiations on each objective mentioned in the manifesto, including those where the passage of time has diminished or eliminated the threat that we foresaw.

What now falls to be decided is whether on these terms, the renegotiated package as a whole, the best interests of Britain will be best served by stay- ing in or coming out.

It will be seen from what I have said that the Government cannot claim to have achieved in full all the objectives that were set in the manifesto on which the Labour Party fought and won two elections last year. Some we have achieved in full; on others we have made considerable progress, though in the time available to us it has not been possible to carry them to the point where we can argue that our aims have been completely realised.

It is thus for the judgement now of the Government, shortly of Parlia- ment, and in due course of the British people, whether or not we should stay in the European Community on the basis of the terms as they have now been renegotiated.

So I do not believe that in taking this decision, if that is the decision which the country takes, we are entering into a narrow regional grouping to the detriment of our world-wide relationships. My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe. We have to face the fact that practically all the members of the Commonwealth, deciding on the basis of their own interests and what is good for them, want Britain to stay in the Community. Of course, it is a fact that many have diversified their trade away from Britain in the past four years. In many cases they felt themselves forced to do so as a result of the 1971 decision and terms. But a number also, New Zealand for example, have entered on a radical reorientation of their political stance related to the region surrounding them and are developing their economic policies in a similar direction.

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