HC Deb 21 February 1979 vol 963 cc550-81

Question again proposed, That the amendment be made.

Mr. William Hamilton

Our trade with the EEC has repeatedly been mentioned in the House and it is assumed that our trade balance with the countries of the EEC has suddenly become adverse because we are members of the Community. In fact, indirect benefits have flowed from our trade with the EEC. Our export trade with European countries has increased far faster than has our trade with the rest rest of the world. The Economist said a little while ago that if our exports to the rest of the world had increased as fast as had our exports to the EEC we would now have 500,000 more jobs in this country.

Mr. Flannery

The NEDC report last week pointed out that the special steels industry in Sheffield is in grave danger of collapsing because of the dumping of special steels by the EEC. There is virtual uproar in Sheffield over that. How can it be called trade when one of the greatest industries in the world is liable to be demolished and thousands of Sheffield workers may be put out of work because of the EEC?

Mr. Hamilton

That has hardly anything to do with the EEC. Everyone knows that if we had not been in the EEC and had faced the same sort of world recession as we have experienced and still had the same outmoded capital machinery and the same opposition to rationalisation which exists in the steel industry, it would be facing almost exactly the same difficulties as it faces today. Almost every steel industry in the world is facing those difficulties. It has little to do with the Common Market.

The hon. Member for Sheffield, Hallam (Mr. Osborn) knows that the problems of the steel industry are being tackled and can be tackled only on a European basis. We cannot solve them in a national context.

Mr. Cryer

Will my hon. Friend give way?

Mr. Speaker

Order. We have had 59 minutes of the case against the Common Market from Government Back Benchers. The speech of the hon. Member for Fife, Central (Mr. Hamilton) is the first in favour. Speeches of Back Benchers will have to stop in exactly one hour to allow time for the winding-up speeches from the Front Benches, and there are still seven hon. Members, including the hon. Member for Keighley (Mr. Cryer), who will be trying to catch my eye.

Mr. Hamilton

I am glad of that assistance, Mr. Speaker. My arguments are as convincing as the rubbish that we have heard from anti-EEC members. They have done nothing to convert me. My right hon. Friend the Member for Batter-sea, North (Mr. Jay) spoke and his major point concerned the expenses and accounts of one of the Commissioners. I support him in that, but I wish that he would be as enthusiastic in supporting me when I point out that there are greater cases of abuse right at the top in this country than my right hon. Friend will ever find in the Commission. I have never heard him supporting me.

Mr. Jay

I believe that we get some benefit from having a monarchy, whereas we get nothing but damage from the Commission.

Mr. Hamilton

I disagree with my right hon. Friend profoundly, not for the first time. I think that the complete reverse is true. That is the difference between us.

As for the more important point raised by the hon. Member for Banbury (Mr. Marten), there is no argument about the power of the Council of Ministers to put a limit on how much the Parliament can increase the discretionary expenditure. It is written into the Treaty exactly what the powers of the Parliament are in this matter. It is a procedural problem which has occurred in the Parliament in the last few months, and it will be sorted out in a reasonable way. There is no difficulty there. Whether the directly elected Parliament will increases its powers we shall have to wait and see. I might say, however, that if it increased them I should not lose any sleep.

We live in a world which grows smaller and smaller. We have to accept that sovereignty will go more and more to bigger and bigger international political units. It is a case of sharing sovereignty. We have seen this in a series of cases. NATO, the United Nations and all the other international organisations to which we belong voluntarily involve a diminution in our national sovereignty.

I accept, however, that the CAP is nonsense. I have made that clear from the start. But we can change it only from within. The Common Market and the association policies will go on, whether we are in or out. It has always seemed to me that we are much abler to make changes from within since we are members than to try to bellyache from the outside. If we go outside, the Community will put up the barriers against us and it will go on pursuing its own policies. It is better for us as a nation which believes in international co-operation and—my own party especially—the so-called brotherhood of man to be in an organisation such as the Community. After all, "man" does not exclude Germans or Frenchmen.

Mr. Spearing

The EEC excludes India, though.

Mr. Hamilton

That is no good reason against joining what is immediately available to us. It is imperative that we remain members of the organisation immediately available to us and which we have taken a decision to join, so that we can mould it as far as we can to our own requirements.

10.8 p.m.

Sir Anthony Meyer (Flint, West)

I am glad that the hon. Member for Fife, Central (Mr. Hamilton) made that brief allusion to the Royal Family in the middle of his speech, because it relieves me and him of the embarrassment of my having to say that I agreed with every word that he said.

To my surprise, I find that I have no difficulty in accepting the amendment moved by the hon. Member for Southampton, Test (Mr. Gould). I agree that the allocation of contributions is unfair.

It is very easy to find arguments against the proposals contained in document No. R/3185. Many of my hon. Friends, notably my hon. Friend the Member for Blaby (Mr. Lawson), who are supporters of British participation in the Community are disturbed at the prospect that to provide the Community with more of its own resources inexorably will result in more public expenditure by the Community. They reject the proposition that the best way to ensure that Britain gets a fair return from the Community is to swamp expenditure on the common agricultural policy, since Britain is the largest food importer, has the smallest and most efficient agricultural population and must always necessarily be a loser, by a vastly increased expenditure in other areas, notably the regional policy, since Britain, as an outlying member of the Community, will always necessarily be a gainer.

That is a very dangerous road to pursue. I understand my hon. Friend's dislike of the proposition and, as a Conservative, I share it instinctively. I accept that the size of the public expenditure which would be involved if the EEC budget were to be expanded so that expenditure on agriculture became only a relatively small part of it would be very large. We would be talking about thousands of millions of pounds, not Britain's net contribution of hundreds of millions which has caused so much upset in the past.

For those who oppose the concept of British participation in the Community and who want to go back on the clearly expressed views of the British people in the 1975 referendum, there is no problem. Much as Labour Members like public expenditure, they dislike the EEC more. They see votes in it—and goodness knows they need them. If they cannot get Britain out of the EEC, they will do everything possible to reduce it to impotence. They do not want the Community to have its own resources because that would enable it to become a true Community. They would like best, I suppose, for it to become a free trade area. I cannot see how that would bring us any benefit.

Free trade within the EEC countries would bring exactly the same adverse balance of trade about which Labour Members moan so much and there would be no corrective mechanisms at all, not even the present less than satisfactory ones. It is a mournful spectacle to see the British Labour Party, which, as the hon. Member for Fife, Central said, once claimed to be, and indeed was, the party of international brotherhood, now refusing, as a matter of principle, any attempt to set up and finance effective international co-operation and demanding protection and subsidy not only against the EEC but also against those very Third world countries whose desperate poverty one Socialist speaker after another used to invoke in many a tear-jerking speech.

Even supposing that permanent protectionism was a morally defensible policy—I shall argue that it is not—it is only conceivably practicable on an EEC scale. To argue for purely British protectionism, as many hon. Members on the Government Benches do, and to argue that we can protect and subsidise our steel, vehicle assembly and textile industries at a level which will save nearly all the jobs in those industries against competition from Eastern Europe, the less developed countries and from our EEC partners is not only preposterous nonsense; it is downright wicked. It is little wonder that a party which commits itselt to such drivel is held in derision throughout Europe and elsewhere. The only wonder is that hon. Members such as the hon. Member for Fife, Central can find themselves comfortable within it.

I do not want to end my speech on so distasteful a note. I began by talking of the misgivings felt my many of my hon. Friends at the prospect of hugely increased Community expenditure. Some may feel that I have dealt with this matter in the manner of a Scots preacher who said "Here we come to an insuperable difficulty. Let us look it squarely in the face and pass by." I do not intend to pass by, and what I say may upset some of my hon. Friends.

There is not merely a political necessity to preserve and strengthen Community Europe which transcends economic requirements, however compelling. Only a united Europe can assure the survival of the nation States which compose it. I believe in something even more relevant to today's relatively limited debate. The only way in which the European nations can, in the long run, ensure full employment and rising living standards for their people in the face of revolutionary technological change—the silicon chip and its consequences—and in the face of dramatically increasing competition from developing countries is by a process of industrial retraining and reconversion on a scale far beyond the capacity or the imagination of any nation State today. I am arguing not just for a vastly expanded regional aid programme but for something very much bigger.

Technological change and competition from the Third world—let us not forget that the Third world is showing itself much readier to accept and take advantage of such change than most of the nations of the industrialised West—face us with a challenge not in the next century or decade but now, in 1979. We have already seen how the Davignon plan has offered a reprieve to the steel industry of Europe—although if the Labour Party behaves as it did the last time that we debated this on 25 January and rejects the means whereby the plan could be made effective, that reprieve will be brief indeed.

But without not just the Davignon plan but something going much further there will be precious few steel jobs in Europe by 1989. Without something much more ambitious and forward-looking than the multi-fibre arrangement, there will be precious few textile jobs. Without something similar for the motor vehicle industry, there will be precious few jobs there, too.

But even this is a mere short-term palliative. The point is that, without a gigantic switch of workers and resources from manufacturing industry into services, many of which—perhaps most of which— will have to be in the public sector, the countries of Western Europe will be increasingly unable to keep their people at work, or fed, clothed or warmed. This great switch of resources is inconceivable on a national basis. It can be done only by the European Community, and only by a Community having large financial resources at its disposal.

The Labour Party finds it hard to accept the idea of effective international action, and action that necessarily requires a powerful dose of supra-nationalism. Many of my hon. Friends will find it hard to accept the idea of increases in public expenditure, whether national or international. If we both hold hard to our beliefs, it is all up with us, and quite soon.

We should do better to take notice of a man who stands further back than most of us and perhaps sees rather further than any of us—Mr. Harold Macmillan. At 85, he at least seems to understand the implications of modern technology and the shrinking capacity of national Governments to look after their citizens. He has said: But what is Europe really for? Because the countries of Europe, none of them anything but second-rate powers by themselves, can, if they get together, be a power in the world, an economic power, a power in foreign policy, a power in defence equal to either of the superpowers. Then, with direct relevance to the problems of modern technology, he added: Then you've got all the new things that science is going to do…We ought to be thinking about making the machines work for us, instead of being their slaves. Not long hours of overtime but many short shifts to make the machine work, keep the machines 24 hours at work, to make it work for us. And then the problem will be leisure and travel and gardening and amusements for the people. If Mr. Macmillan at 85 has the vision to look into the future like that, who will ever forgive us if we sit around squabbling about how much will be paid to Mr. Haferkamp or what the contribution will be to the common agricultural policy? If we do not face the future, we have little hope indeed.

10.19 p.m.

Mr. Bob Cryer (Keighley)

This has been an interesting debate. The weight of argument has been against the increase in budgetary powers proposed in these documents. With one or two exceptions, the Conservative Party is shifting slightly. It does not seem to be able to bring forward any of that unstinting enthusiasm that it showed for the EEC before the referendum.

One thing which galls us on this side, and some hon. Members opposite, too, is the fact that the sort of matter that we are discussing now is what we predicted during the referendum campaign. We said that the Commission would be intent on seeking further powers, that it would not stop at the situation which existed in 1975 but would seek a greater proportion of the financial resources of this country.

There have been one or two voices raised by the Euro-fanatics and those who are critical of the EEC to the effect that the CAP takes too much money. My hon. Friend the Member for Fife, Central (Mr. Hamilton) said that, as did several Conservative Members who, until recently, have shown an undimmed enthusiasm for the Common Market. We shall not get changes in the CAP unless we fundamentally change the EEC. It is easy to say that that is our demand. Our Minister of Agriculture, Fisheries and Food is the best this country has ever sent to the EEC. He has done an excellent job. However, within the structure of the EEC the CAP represents a fundamental pivot. To change that would almost certainly bring about the alterations which would make the Community unrecognisable.

In Financial Guardian of 1 February, Wynne Godley says: The UK is the largest contributor (at £1,100 millions or so) by a long way. The only other net payers are Germany and Italy who each contribute £600 million to £700 millions. The largest net gainer is France who gets around £700 millions. That is because the CAP is based on inefficient French farming. Is France likely to agree to changes which would savagely reduce the amount of the net contribution which she receives?

We have all said that things need to be changed and have made strong cases proving why such changes are valid. Over the years we have been progressively sucked into the EEC. The Labour Party did not want direct elections. We are to have them on 7 June. Direct election will not have any effect except to legitimise some of the things about which we are complaining. The power to legitimise these actions will be sucked from this Parliament. That is why some of us talk about alterations to the European Communities Act 1972. This is not something which is hidden from those in executive positions. It has been plain and clear for many years during which we have been members of the EEC. Yet our position does not change in the radical way we suggest.

Already in document No. R/3185 there are suggestions for increasing the EEC budget. The betting is that the Commission will make those proposals, that they will come back here and that there will be pressure to have them accepted. I hope that we shall have a clear and unambiguous commitment to resist any changes in the budget as a start towards ensuring that real changes are made to the EEC. The only way we shall get such a change is to make it clear that if they do not come about we shall unilaterally withdraw from the Community.

In this document the Commission says: For the Commission, customs duties and agricultural levies belong irrevocably to the Community and should not be modified in any way. That might be the position of the Community. We have to make it clear that our position is not irrevocable. The document goes on: The Commission also believes that VAT is a good basis for an own resource, for despite the limitations and problems of the existing situation it has the character of a tax which bears on the individual community citizen…In conclusion, the Commission again draws attention to the inevitability of the need for a decision, and to its expectation that additional resources will be required in time for the 1982 Budget. In view of this, and the need to allow time for the necessary ratification procedures at national level to be completed, the Commission thinks that a decision on the own new resources will be needed in 1979. That is this year. We must make absolutely clear that we shall resist any attempt by the EEC Commission to increase the tax base, since not only would this be a further cost which we should have to meet it but it would weigh on our existing commitment.

I am not relying here on the Financial Guardian of 1 February. I am relying on Cmnd. 7405, "The European Monetary System", in which, at appendix A, there is a list of our net financial contributions calculated by the Treasury. It is interesting that the only year in which we received a contribution was 1975. Is it not a strange coincidence that that was the year when we were "renegotiating"—I put the word in inverted commas—our position and we were to have a referendum? Although the EEC runs a comprehensive public relations department, with, no doubt, a lot of well-paid, sharp-suited gents busy spreading the EEC case in every nook and cranny of the country, the truth is that, whether it be a loan to the National Coal Board or a grant to a local authority, we make a contribution. After all the grants and other little titbits have been displayed the length and breadth of Britain, the contribution made by our citizens is never shown. It is cloaked and shielded by the PR men who now dominate the media, and the message, too, regarding the EEC.

In 1976 we made a net contribution, according to the Treasury figures, of £167 million, and in 1977 it was £369 million—I emphasise that this is after receipts. In 1978 the figure was £730 million, and for 1979 and 1980, at 1978 prices, the figures of net contribution calculated by the Treasury are £780 million and £895 million. It may well be that the Treasury took a conservative view of these matters, since it is not unknown for the Treasury and the Government to move rather closer towards the Community than the Labour Party would wish them to do.

In addition to the £1 billion or so which we contribute in cash terms, there is our contribution in trade terms. The hon. Member for Flint, West (Sir A. Meyer) spoke about this, as did my hon. Friend the Member for Fife, Central. The hon. Gentleman said that, of course, our turnover with the EEC has increased. That may well be so but, however much one's turnover increases, if one's expenditure increases at a faster pace it is an excellent recipe for having a larger deficit than one did before. That is precisely the position that we face. We face a deficit of about £2½ billion, and exactly as we must make an individual stand about the budget contribution so we must make an individual stand about the imports of manufactured and semi-manufactured goods, for if we do not we shall see the extinction of some industries in this country.

The truth is that the EEC simply does not have the machinery to cope with these matters, even if it wanted to, which one greatly doubts. Some of our own civil servants, frankly, are not all that worried about some of our smaller industries disappearing, so I shudder to think what the bureaucrats of Europe see in their global view from their isolated eyrie overlooking the whole Common Market.

My hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) mentioned the position of Sheffield steels. I wish to speak now about the chipboard industry, a small industry employing only some 2,500 people directly and another 2,500 indirectly. What is 5,000 jobs? Of course, all hon. Members start thinking about jobs if they have cause to think about having to sustain them, and that is true also for all the people in the chipboard industry and the sub-contractors which supply that industry.

Belgium is dumping chipboard in this country. This is openly acknowledged by the Belgian manufacturers and it is understood and acknowledged by the British chipboard manufacturers. What is the advice of the EEC on this dumping which is driving people to the dole queues? It is to counter-dump, dump it back in Belgium. Our industry asks "What can we do? If we try to dump chipboard in Belgium, the distributors will be blacklisted." That is the situation that the industry faces. In the same way, we must face reality and be prepared to make an individual decision about the budget.

There has been reference to the multi-fibre arrangement. It is an arrangement that we negotiated with the EEC. It may be argued that if we were able to negotiate that, we may negotiate changes in the budget procedure. Alas, the MFA, which was negotiated with blood, sweat and tears as an attempt to achieve wider trade regulation with the EEC of the sort that I have advocated, was handled in a hurry by those inexperienced in trade negotiations. We were negotiating at second hand because the British delegation did not enter into negotiations.

What was the effect of the arrangement? The EEC changed its mind about some of the arrangements that were entered into. The quota arrangements—the basket extractor, as they are somewhat clumsily called—are not working as expected. What can we do about that? We cannot do anything. We are members and we have to accept the word of the Commission.

The MFA represents not an unreasonable principle that we should follow, but in practice it does not work out well within the EEC. Therefore, we must erect a clear marker. The marker is that our experience of the EEC has been more or less an unmitigated disaster. It has not been to the advantage of the British people.

Some Opposition Members are now manoeuvring themselves into criticism whereas they have always been sweetness and light and enthusiasts of the EEC. That does not apply to them all, but that has been the general rule. Criticisms are being expressed because we are moving closer to a general election. It is realised that, despite the result of the referendum, there are severe reservations underlying the view of the British people about the EEC.

We must make our position clear in the House. My goodness, how many times have hon. Members said in the Chamber, often late at night, that the House of Commons must not lose its power? They have said "We are a democratically elected body. We must be able to make decisions and influence matters." The response has been "Yes, we must retain those rights"; but we have seen them eroded month after month. The hon. Member for Harrow, East (Mr. Dykes) is shaking his head. Of course we have seen the rights of the House eroded.

Mr. Hugh Rykes (Harrow, East)

By the Government.

Mr. Cryer

No, by the EEC. For example, how does the hon. Gentleman expect the Government to negotiate unilaterally the application of temporary employment subsidy when the Commission is opposed to it? The Commission has said specifically that too much money is going to the footwear and clothing industries. Two of those industries happen to be close to my heart because they are in Keighley. It is no good the hon. Member for Blaby (Mr. Lawson) laughing. Many people work in those two industries, and I care about preserving jobs in them.

The Labour Government recommended to the Commission that TES should be continued to preserve jobs. It was the Commission, not the Government, that insisted that TES should be reduced. Anyone who imagines that that is not so either does not understand or does not care to appreciate the truth. The reality is that little by little the EEC is modifying and moving the power of decision-making away from the United Kingdom Government and towards the Commission.

We must erect the marker—it will have to be tentative because we are not sure about the status of the documents as I understand that the budget has not been approved—that we shall not in any circumstances allow the EEC Commission any broader base of taxation. If the Commission wants to make any change, the best change would be on the lines of the radical proposals that we have put forward for reducing expenditure on the CAP, and those proposals should be backed by the threat of unilateral withdrawal if they are not achieved. That is what the Commission should do if it is really intent on a better order and system of priorities rather than with a shift of power. If that is what it really wants to achieve, it will do that. Before we in this Parliament make any move, let the Commission demonstrate to us first that it has the will and the ability to carry out changes to the CAP. That is the message which should go out from this House.

I know that only a few hon. Members are present, but the feeling in the country is unquestionable. I find it everywhere I go. When I talk to people, I find that they have reservations about the EEC. Those reservations should represent our marker tonight, and we must make it absolutely firm and clear. From that basis we can perhaps start to extricate ourselves from the mess that the EEC has got us into.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. The House has already been advised that the winding-up speeches are due to begin at 11.5 p.m. There are still five hon. Members who are anxious to take part in the debate. I appeal for five-minute speeches in order to accommodate them.

10.36 pm
Mr. Kenneth Clarke (Rushcliffe)

It was predictable that the hon. Member for Keighley (Mr. Cryer) would conclude his speech by talking about reservations about our membership of the EEC. He is the only speaker so far to have talked of the possibility of unilateral withdrawal from the Community, but that has lain behind the thought of several hon. Members who have spoken in the debate.

I share with the hon. Member for Swindon (Mr. Stoddart) the interest, and fascination sometimes, of these debates on European matters, but I wish that one day we could get beyond the basis of debate where all the time running throughout the entire discussion is the underlying theme of whether the question of our membership of the Community could be reopened. We divide on this issue into pro-Marketeers and anti-Marketeers in both the Conservative Party and the Labour Party, so that there are four broad camps. We simply fail as a country to make any useful contribution to the European Community, or to derive the best from it, while we continue to adopt attitudes towards Europe which are entirely based on a stale battle about whether we should ever have joined in the first place.

There are several issues on which all four of those broad camps seem to be capable of being generally agreed in discussing the documents before us without anyone conceding his enthusiasm, for or against the Community, on either side. The other member States sometimes have such difficulty in understanding the position of the British as members of the Community that we might do them a service if we underlined the matters on which we are all agreed, particularly after the absurd somersault that the Government have been through on the European budget, which my hon. Friend the Member for Blaby (Mr. Lawson) talked about earlier. I hope that the Minister will deal with it in his reply.

There seems to be universal agreement that the present system of assessing the budget contribution from this country to the EEC is not satisfactory and must be revised. The Government's attempts to renegotiate that part of the terms of our membership have failed, and it is plainly wrong that we should pay a disproportionate share of contribution to the total budget. This can be exaggerated, and it is possible to challenge what the hon. Member for Southampton, Test (Mr. Gould) said about the real weight that we should give to the MCAs. Nevertheless, obviously the British position should be that we desire to see a system that is more related to the strength of the economies and the ability of individual countries to pay. We on the Opposition Benches deeply regret that the British economy has been brought to such low straits that we are one of the poorer members of the Community and need particularly to seek this adjustment.

Everyone is agreed that the common agricultural policy needs fundamental change. That cannot be brought about by the Commission, as the hon. Member for Keighley appeared to think. It is a matter for the Council of Ministers. But obviously something should be done about the excessive expenditure on agriculture and the accumulation of agricultural surpluses. Something akin to a price freeze is plainly needed. The British position can be combined with revaluation of the green pound and a move towards phasing out the MCAs.

This, it seems to me, is common ground. It is British policy. It is not a new discovery by the anti-Europeans, nor is it, as my hon. Friend the Member for Banbury (Mr. Marten) seemed to be suggesting earlier, some kind of lone battle that he has been pursuing for some years.

Mr. Marten

No, no. I did not suggest that.

Mr. Clarke

These are fundamental matters upon which we can all agree. The main difference between Conservative and Labour Members is that the Government have pursued these sensible policies so ineffectively that they have achieved absolutely nothing in either direction. We Conservatives believe that the absurd antics of the Minister of Agriculture, Fisheries and Food will achieve nothing on the CAP, and the Prime Minister will achieve nothing on the budget, until they are combined in some more sensible approach to our membership of the Community.

There are other matters on which there should be a sensible understanding. It is quite absurd if we have debates in the House and divide on the basis that all those who are pro-Community want a bigger EEC budget without limit and all those who are anti-Community want an ever smaller EEC budget in the hope of extinguishing it altogether. We Conservatives look at the budget of any public body—certainly the EEC—in the context of our views on the reduction of public expenditure. But the way to approach any budget is to look, first of all, at the policy purposes which underline it, to decide what it is that one wishes to do at this level of government and to see what the resources of the economy will finance. I know that that is not an approach which commends itself to many Socialists, but there must be some who can see that the present position of the Government is arrived at by not adopting that approach.

Some policies of the Community that will be pursued will result in increased expenditure and will have non-quantifiable benefits. The obvious one is the enlargement of the Community, which is being pursued for political reasons to try to reinforce democracy in three applicant countries and to bind them closer to the rest of Western Europe. The enlargement of the Community to include those three countries will cost money and will require an enlarged budget.

I also believe—and this is one reason for ever joining the Community—that some policies are better tackled on a Community basis than on a national basis. Increased Community spending is, therefore, justified in those areas. Naturally, as Conservatives, we shall look for some corresponding reduction in national spending, where that is possible, if we are transferring to the Community responsibilities which we think are not adequately carried out at national level. Regional policy is one. I shall return to that in a moment.

In the context of what I have just said, the Conservatives certainly do not go along with the concept of "additionality" on the basis that we have enlarged and unlimited expenditure over and above national expenditure. I should like to look at additionality in terms of wishing to see a distinctive European policy which is not just a contribution to the British Exchequer, as the present British Government insist that the regional fund should be. A European policy in any field should be seen to be making some desirable Community contribution to solving our national or regional problems. I believe that that is attainable.

The basic policy decision that should be taken to improve our position in the Community, and to get more out of it, is to shift the emphasis within the Community away from agriculture and to look towards matters of policy in the areas of industry and trade. We are an industrial and trading nation, and it is to those areas that we should look for substantial benefit. The policy of a shift away from expenditure on agriculture and an exploration of policies in the area of industry and trade should commend itself to Europe as a whole and certainly to Britain.

It is the present concentration on agriculture which causes the British budget contribution to be out of line. We get precious little direct benefit for our farmers from the agricultural policy. We are large-scale importers from outside the EEC, and so long as the present balance remains it is inevitable that we shall be a large net contributor.

We are not looking for unlimited expenditure on industry with the idea of getting a giant budget in an attempt to swamp the agricultural budget. One must cut agricultural spending. One would achieve very little in the Community, however, if one approached it solely on the basis of cutting agriculture expenditure and having no policy recommendations to make in any other area. The main target in the short term should be regional industrial policy.

My right hon. Friend the Member for Bournemouth, West (Sir J. Eden) said that there is a danger in Parliament if people pursue local issues. I represent a constituency in one of the few parts of the country which is not in an assisted area, and I therefore have no parochial interest in advocating a regional policy. But the main obstacles to the achievement of a genuine free market in Europe—and certainly the main obstacle to a genuine Europe-wide economy—are the great imbalances in the level of economic activity in different parts of the Community.

It is extremely difficult to harmonise our industrial, taxation, monetary, economic or any other policies when there are these great imbalances. The latest unemployment figures show that British national regional policy is doing nothing to cure the problem of our own national unemployment imbalances, which are getting worse. I believe that the resources of Europe are needed to do something about it, and to make some resource transfers from the richer economies of the Community to the regions of this country.

I also believe that a European policy would cut out national competition in regional aids, which is at present so counter-productive and encourages a pork-barrel attitude among member State Governments towards regional policy. At present, multinational companies hawk mobile investment schemes around Europe looking for the highest bid from the Governments of member States. We are one of the poorer countries that will be outbid in any system of that kind, if it persists for long. I believe that a European approach is desirable.

What I therefore look for are some policy changes that will combine a sensible British position on agriculture and the budget contribution, on the one hand, with a constructive industrial and trade approach towards Europe, on the other. The Government have no such position. In November last year, they voted with Italy to increase regional spending. By February this year, they were lined up with Denmark and France in refusing to pay the contributions to the budget which a British Minister had brought into action. That was an absurd somersault.

They voted for increased regional expenditure until they alarmed their own side, because they suddenly realised that it might mean that good news would come from Europe to regional Labour seats. They then became panic-stricken about the powers of the European Parliament, aligned themselves with the French Gaullists and refused to pay the necessary contributions to meet what they had voted for. At present they are firmly in alliance with the Gaullists, and an alliance between the British Labour Party and the French Gaullists seems to be the silliest thing that has happened in politics since the Fox-North coalition. It seems to me that the present Prime Minister has a great deal in common with Lord North in a number of the policies that he pursues.

Nevertheless, the time has come for a more reasonable and constructive approach to Europe—one which does not simply deal with the fundamental question of our membership but which tackles the budgetary and underlying policy problems and looks to the question how Britain can get the best out of a sensible European budget.

10.47 p.m.

Mr. Nick Budgen (Wolverhampton, South-West)

It is clear that there is an important emerging alliance between what will be the European Parliament and the Commission. The object of the alliance is to increase the powers of the European institutions.

I thought that my hon. Friend the Member for Blaby (Mr. Lawson) made a splendid Gaullist speech in which he vigorously asserted our national rights, and most of all the Tory Party's continuing belief that big government does not work and that we must cut public expenditure. In making his vigorous speech, he rightly pointed most of all to the importance of the Community document "Financing the Community Budget—The Way Ahead". In that document, the Commission quite unapologetically pointed to the importance of expanding the Community budget. Just as the power of the House of Commons was expanded most of all by its fight with the Crown over expenditure, so the Commission clearly appreciates that it is by expanding their revenue, and increasing their area of activity, that the European institutions will grab power from the national institutions.

Mr. Lawson

I hate to interrupt my hon. Friend, particularly as he made some generous remarks about my contribution. He will probably agree that over the past 100 years public expenditure in this country has increased substantially. Does he believe that the power of this Parliament has increased commensurately over that period?

Mr. Budgen

No, I do not. I agree with my hon. Friend. But when the main power was held by the Monarch it was to some extent taken away by the control of this Parliament over expenditure. The move towards big government was well advocated by my hon. Friend the Member for Flint, West (Sir A. Meyer), who is an unrepentant believer in the Macmillan ideas of bigger and better government and more and more intervention. That is still an important force in the Tory Party, but I am happy to say that it is declining. It is now more sceptical about the benefits of big government.

My central theme is the danger of the alliance between the Commission and the Parliament, as it will become after 7 June. In the 1960s the Tory Party believed in big government and big government expenditure, but that belief has declined. Yet in a report of 7 February of this year we find—and this is not something that is known only by the Tory Party—that the whole United Kingdom delegation to the European Assembly voted for increased public expenditure and an enhanced regional fund.

It is plain that my hon. Friend the Member for Blaby is against that kind of expenditure, but why did my hon. Friends in the European Assembly vote in favour of increased expenditure on the regional fund? They were Tories and some of them were against increased public expenditure. But they were also members of the Assembly and they saw as their overriding objective increasing its power. They may have supported the Tory Party, the principles of smaller government and less public expenditure, but they were Europeans and voted in favour of enhanced expenditure on this regional policy.

That is the danger. Those who go to Europe regard themselves to some extent as on the make, grabbing power. In examining the proposals in this document, we must recognise that these people are seeking areas for increased public expenditure in regional policy, social policy or in their proposal for the right to search for oil and set up a European British national oil company. Those who serve in the European Parliament will in many instances abandon their domestic political philosophies and subjugate their main political interest to enhancing the power of the European institutions. I may have put it aggressively, but whatever our attitude to Europe we must beware of this, otherwise we shall lose much of the power of this place.

Mr. Deputy Speaker

The Front Bench speakers have kindly allowed another five minutes for Back Bench speeches. I should like to be able to call three more hon. Members in the time that remains.

10.55 p.m.

Rev. Ian Paisley (Antrim, North)

I wonder what would be the attitude in the French Parliament if France had paid £1,000 million into the Common Market and got nothing out of it. The French people would not have thought that their politicians were committing an unpardonable sin by calling for France to quit the Common Market, yet hon. Members who call for the United Kingdom to quit in those circumstances are accused of committing such a sin.

We need to look the problems squarely in the face. I am the only Northern Ireland Member in the Chamber. Northern Ireland is on the periphery of the Common Market and is largely an agricultural province. It is suffering badly because of Common Market policies.

I was in the House when we debated the Bill that took us into the Common Market. Hon. Members who raised questions and queries were howled down and were told that the Common Market would be the be-all and end-all of good things and that we would all sail to prosperity.

Northern Ireland candidates for election to the European Parliament have changed their views—as have some hon. Members. The advocates of the Common Market, with all the wonderful benefits that it would bring to Northern Ireland, are facing the electorate and, in the light of some of the facts that have been spelt out in our debates, they have had to change their position. They want to be for the Common Market and against it at the same time.

Instead of talking about the alleged economic benefits, the advocates of the Common Market are now talking about preventing war in Europe, but I think that the Council of Europe is a far better forum for welding together the nations of Europe that do not want war. With respect to Mr. Macmillan, I want no part in building another super-Power. The world is sick of super-Powers. We need to see reason prevail in these matters.

I must declare an interest, because I hope to be a candidate in the European elections on an anti-Common Market ticket. If I go to the Common Market, I shall be raising my voice not to help the Commission but to debunk the fallacy that it takes 400 paid Members to do what 190 deputed Members used to do. It is time that we debunked the authority of the European Parliament and established the authority of the sovereign Parliaments of the countries that make up the Common Market.

10.58 p.m.

Mr. John H. Osborn (Sheffield, Hallam)

I came to listen to the debate and to learn what hon. Members thought of the budget procedures. It has been a fascinating experience to learn how ill informed they are about what really happens.

As we were to debate the budget and the documents, it would have been helpful if the Government and Opposition Whips had asked my hon. Friend the Member for Scarborough (Mr. Shaw) and the hon. Member for West Lothian (Mr. Dalyell) to be here to account for what they had done in the budget committee and their work with the Members of the European Parliament who were concerned with this matter.

The budget committee is concerned with the allocation of expenditure. Once it has been decided what the expenditure should be, obviously the revenue must match it. I have been a Member of the European Parliament for four years and I could comment on the complexity of the voting procedure. My hon. Friend the Member for Banbury (Mr. Marten) asked for a recorded vote on every occasion. Last December there were 130 votes. The European Parliament likes to get through them in two or three hours. We do not like to spend nights debating, as we do in this place, because many of us want to return and make our contributions in debates in this House.

I am glad that the hon. Member for Fife, Central (Mr. Hamilton) brought up the real issue of the Community budget. The budget is only 2.5 per cent. of the expenditure of all the Community countries collectively. It should be borne in mind that the Commission has to look after the budget. The Civil Service of the Community is a little smaller in size than that of the Scottish Office.

During debates on many issues in the European Assembly that I have attended, the Social Democrats and their Labour Party colleagues frequently have asked the Commission to take on more tasks. If the Commission takes on more tasks, it needs more staff. If it needs more staff, it needs more money. Perhaps one should analyse what hon. Members on the Government Benches and the Social Demo- crats have said in order to discover the extent to which they have been in conflict with a Conservative group which has been in a minority on the extreme right of what we call the Hemicycle.

One of the documents that we are discussing deals with expenditure on fusion and the transfer of activities to Culham. I should like to see larger Community expenditure in that area and less of the duplication and competition which result in a greater total expenditure, taking the aggregate of expenditures by the national Governments. Greater Community expenditure would reduce the aggregate of duplicated national expenditure. That is an example of how the Community can work more economically and effectively for the benefit of the people.

I cannot develop my argument on energy. I shall not exceed my time. However, I should like to refer to three matters—intra-Community trade in coal, the financing of coal stocks, and the burning of coal in power stations. Surely, there is a good case for encouraging countries to burn more coal in power stations. There was an argument—even within the Conservative group—that where there are power stations that could be readily converted to coal in Great Britain they should be so converted. However, the Danes felt that they would not benefit from that because they have no coal. These are the difficulties that arise within the Council of Ministers and within the parliamentary committees.

I should like to end upon the important issue of the scale of the British contribution as it has increased in the last three years and the benefits that we have received from the corresponding monetary compensatory amounts. I hope that the Minister will make clear the scale of the British contribution. Great Britain is at a disadvantage, because it has to import so much of its food. However, this is a matter for negotiation and it is right that it should be raised in the House. I, for one, with another three months in the European Parliament, will take note of the views of the House on the matter and will try to influence my colleagues in the member countries.

I thank you, Mr. Deputy Speaker, for giving me the opportunity to take part in the debate, having made a similar contribution in the European Parliament. I assure my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) that I am out not to grab power but to serve this country in the European Parliament.

11.5 p.m.

Mr. Roger Moate (Faversham)

I wish to direct my few remarks to document R/3185, "Financing the Community Budget—The Way Ahead." Despite appearances to the contrary, the debate on it has not been about the principle of membership of the Community, it has been about the very nature of the Community. It has concerned the resources available to the Community in future and, because of that, the powers of the European Assembly.

Whatever our arguments about our membership, we are entitled to look back at the bargain that was struck with the British people about taxation. Throughout the referendum campaign and all our debates it was made quite clear that the European Community would be limited in the resources that would be available to it. The resources were to be the customs levies, the agricultural levies and, ultimately, own resources coming from 1 per cent. of value added tax. That was clear and precise. There was no doubt about it. That is the bargain which was struck when Britain entered the Community, and I can see no grounds for changing that proposition.

I regard document R/3185 as one of the most presumptuous ever to be put before the House. I refer to it briefly, emphasising again that the 1 per cent. VAT own resources was the limit of the British people's commitment. It says: And it is not acceptable that the present 1 per cent. rate of VAT should constitute a ceiling on Community expenditure. But that is the ceiling on Community expenditure, and that is the basis on which the Commission is engaged and employed. It is presumptuous in the extreme for it to go on to say: For all these reasons, there is no doubt that new revenue will be needed. The only question is when. The answer to the Commission ought to be "There will be no additional resources, and it is your task and duty to manage within the existing provisions."

Many of my hon. Friends who are passionately in favour of membership have said that they are also in favour of reform of the common agricultural policy, but the only way in which they can secure that reform is by imposing limits on the Community budget. If the Community wants to spend more money on regional aid, on research and on scientific work, it must find the necessary funds from the existing budget. That is the imperative which will force it to devote less of the budget to the CAP.

By giving the Commission what it asks for, which is the development of Community VAT, which will place even more power in the hands of the European Assembly, we should be giving it the opportunity to carry on the CAP as it is operating at present. At a time when the British people know that the Community is costing them £1,000 million a year net and very much more than that in terms of the effect on their standard of living, for the Community to say that it is suggesting a Community VAT or a Community tax on petrol and alcohol, which is what it is proposing in this document, is presumption in the extreme.

While not begging the question about Community membership, I should have thought that most right hon. and hon. Members and the two Front Benches ought to be able to combine and say "No. There is no question of new resources being made available. The cash limit on which we are all agreed shall be applied absolutely. It is no good your saying that it will not be enough because, for example, there are additional costs involved in enlargement."

My hon. Friend the Member for Devon, West (Mr. Mills) argued the case for a greater national emphasis on agricultural policies. The lesson that we must learn from enlargement, if we are to deal with the problems of Greece and Spain, is that we should have national policies to do so. That is the way in which we can reduce the cost of the CAP within the existing budget.

Without raising the fundamental question of membership, I say that the task of the Community must be to manage on its existing resources. I hope that the message from this Chamber will be that if the Community comes forward with a proposal in 1979, as it says it will, for new Common Market taxation, the answer from the House of Commons will be "No, no, no".

11.10 p.m.

Mr. Lawson

As my hon. Friend the Member for Faversham (Mr. Moate) said, the House has spoken with a certain degree of common misgiving about some of the proposals implicit in this Green Paper from the Commission and about the idea of enlargement of the Community budget on the basis that seems to be implied in that document. I believe that that will be noted. I think that it should be noted, together with the taxation policies that flow from it.

I share the regret of my hon. Friend the Member for Rushcliffe (Mr. Clarke) that there was not a greater attempt to make common ground, of which a great deal exists in this House, over what British policy should be within the Community. There was far too much fighting over the old ground of whether we should be in or whether we should withdraw. This is sterile and unhelpful. The remarks of my hon. Friend the Member for Rushcliffe should be pondered.

I want to be brief to allow the Minister to reply to the many points that have been made. I would like to comment on the separate but important points made by my right hon. Friend the Member for Bournemouth West (Sir J. Eden), who had misgivings of a different nature, which many of us share, about certain procedural aspects of the budgetary mechanism at Community level. I hope that his remarks will also be pondered. I would like to apologise for not having commented in my opening remarks on the invaluable work of the Scrutiny Committee under his chairmanship which is of great assistance to all of us who try to follow Community affairs.

I made clear the position of those on the Opposition Benches in my opening remarks. I would like now to make one further point to the Minister. We accept and believe that membership of the European Community is profoundly in this country's interests, despite all the misgivings that I have spelt out about this document. However, the position of those on the Government Benches is not quite clear. The hon. Member for Keighley (Mr. Cryer) said, in ringing tones, that unless there were radical changes in the CAP and maybe also in other matters, Britain should withdraw unilaterally from the Community. I would like the Minister to say clearly whether that is the policy of the present Government and, if not, precisely where the Government stand. I hope that he will be able to make common cause with us and not with his hon. Friend the Member for Keighley. It is important that that point should be put on the record.

11.13 p.m.

Mr. Denzil Davies

With the leave of the House, Mr. Deputy Speaker, I would like to deal with some of the points that have been raised. My right hon. Friend the Member for Battersea, North (Mr. Jay) asked about the Commission's salaries. He will be pleased to know that a kind of comparability study does take place. The Commissioners' salaries are fixed with reference to the highest grade of Commission salary. The latter are themselves recalculated by the Commission each year taking into account rates of inflation and Civil Service salaries in member States. I understand that they are then approved by the Council. At the end of the day, the Council has a power over the Commission's salaries.

The hon. Member for Sheffield, Hallam (Mr. Osborn) asked me to make clear what was the budgetary cost to this country of membership of the European Economic Community. The figure has been mentioned in this debate. I will give it again. It is a net contribution, in 1979, of about £1 billion. That is the budgetary cost. I think that most hon. Members know that figure, but it is worth reiterating it in the House.

My hon. Friend the Member for Birmingham, Handsworth (Mr. Lee), who apologised to me for not being able to be present for my winding-up speech, asked a number of questions. He asked me to comment on some of the suggestions made by the Commission for raising extra money. I will deal with this matter briefly. The Commission has suggested a cigarette duty. As I said in my opening speech, that would be a very regressive form of tax, and we do not favour it. An alcohol tax would be impracticable because there is no harmonised base in the different countries. There are problems with a tax on energy. Not only is there no harmonised base; it would be perverse to try to increase revenue by taking energy when we are trying to conserve it.

As for corporation tax and income tax, apart from the fact that there is no harmonised base, real questions of economic sovereignty are involved. Once one thinks along those lines, particularly with income tax, one is dealing directly with sovereignty and control of economic power. All those suggestions are wide of the mark. There is more to be said for the suggestion of VAT as a form of revenue. There are fewer arguments against it.

The hon. Member for Blaby. (Mr Lawson) made an extraordinary speech. One detects among Conservative Members a movement away from the support they gave to the way in which we negotiated our entry of the Common Market. The hon. Member must be in some difficulty. He believes that public expenditure should be cut, and this is one area of public expenditure that he cannot cut because it is not within the power of a British Government to do so. It can be cut only with the agreement of eight other nations. This is one area which a Conservative Chief Secretary, however zealous—I do not know what the aspirations are of the hon. Member for Blaby—would not be able to cut.

The hon. Gentleman gave qualified support to the Minister of Agriculture in his negotiations but, as always with the Opposition—certainly the Front Bench—the support is niggling. He said that he was generally in favour of what my right hon. Friend was doing, but went on to say that the British Government's stand on the budget was illegal. The hon. Member for Rushcliffe (Mr. Clarke) said that we should take a more reasonable and constructive approach. What they are often saying is that we should cave in, that we should not stand up for British interests. If the Opposition Front Bench stood up for British interests and supported us when we did so, instead of taking a niggling attitude, we might get the changes in the Community that we are looking for.

Mr. Kenneth Clarke

Would the right hon. Gentleman say when Ministers were standing up for British interests? Was it when they voted with the Italians to increase the regional fund in November or when they stood with the French to refuse to pay the bill in February?

Mr. Davies

That shows the considerable ignorance of hon. Members of how the Community operates. I will say exactly what happened. The President of the Assembly declared unilaterally that he was adopting the budget. He knew very well that he could not adopt the budget without agreeing a new maximum rate, and the new maximum rate has to be agreed between the Assembly and the Council. The President of the Council, in December, on behalf of all members—[Interruption.] Even if the hon. Gentleman does not like the answer, he still should not mutter from a sedentary position. The President said that the budget had not been adopted in accordance with the Treaty. That was the view of the whole membership of the Council.

The next question was, how should the contributions be made, following the unanimous decision of the Council that the budget had not been adopted? The British Government took the view, rightly in law, that if a budget were not adopted the only way in which we could contribute was on the basis of one-twelfth of the draft budget of the Commission.

Mr. Lawson

That is not quite right. Will the right hon. Gentleman now answer the question that was put to him, instead of trying to disappear in a fog of evasions and obscurities? Why did the Chief Secretary vote as he did at the meeting of the Council of Budget Ministers on 20th November?

Mr. Davies

That meeting was concerned with many items of expenditure and obviously one has to take a view on each item. This problem arose because the President of the Assembly unilaterally adopted a budget when he had no authority to do so, when there was no agreement on the maximum rate. That is provided for in the Treaty.

The hon. Member for Blaby should not stand at the Dispatch Box calling on all his legal experience and knowledge and saying that the British Government's action was illegal. That, again, is an example of how, on the one hand, the Opposition say "Stand up for British interests" while, on the other, they niggle at us all the time, making it much more difficult for us to do so. It is right to say that this document is concerned only with a part of the contribution to the budget. It has nothing to do with agricultural or customs levies. Whatever happens, whatever we do about this part of the budget, we shall still have the problem of the agricultural and customs levies, which form a major part of our contribution to the EEC.

I return to the document. It must be made clear that the House will have the complete power to accept or reject anything put forward. First, any agreement on increasing own resources will be an extension of the original agreement, effectively a new treaty. That will have to be agreed by all member States in the Council of Ministers. The British Minister, whoever he is at that time—if the time ever comes—will have a veto and will be able to use it against the new treaty. If he decides not to do so and proposals come to this House, almost certainly those proposals will have to be ratified, at least by affirmative resolution of both Houses and, if it means increasing revenue in different and new ways, possibly by new legislation.

Mr. Budgen

I am sure that the Minister has it in mind that document No. R/3185 says, on page 4, that it is proposed that the Commission should make its application in 1979. This is an urgent matter.

Mr. Davies

The Commission believes—we do not necessarily share this view—that by 1982 it will need extra revenue. It believes that, because of the processes of ratification that have to be gone through, it had better get a move on.

Mr. Jay

My right hon. Friend says that this issue will have to come back to this House for a final decision. Will he tell us now what is the Government's attitude? Can he not say that the Government will definitely not agree to further increases in expenditure?

Mr. Davies

May I come to that point in a moment? It is only fair not to give the impression that this document calls for any decisions now. The document will be discussed with other documents. Other Governments are not keen to pay more money to the Commission. The same pressures we have seen tonight will apply to other countries. If, after further consideration of these proposals, the Commission puts forward a paper, it will be that which will be considered in the House. It is at that point that the Government will have to make a firm stand and commitment. Once that paper has been agreed, the issue will still have to be agreed by the Council of Ministers. The British Minister will have a veto. It will then have to come back to the House, where it will be subject to a vote. At the end of the day, therefore, the power over those matters lies with the House of Commons. There is no question about that. One should make that absolutely clear.

Mr. Cryer

Does my right hon. Friend appreciate that the House of Commons—certainly the Labour Party—would prefer the Minister to come here first with the proposals, because there is a suggestion by my right hon. Friend the Chancellor of the Exchequer that the Minister makes his decision at the Council of Ministers and then comes back here with a fait accompli? My right hon. Friend knows that when that happens the Government expect some of us to troop into the Lobby behind their decision. We want the decision made here first.

Mr. Davies

I can give my hon. Friend the assurance that the proposals will be brought back to the House first and they will be debated in the House first. Obviously, Ministers will have to take a view and take account of what the House says and does. It is after that that the matter will be debated in the Council of Ministers, and at that point there will be the ultimate sanction of the veto, if it is decided to use it. Then, if it is not decided to use the veto and there is agreement in the Council of Ministers, it will have to come back to the House again to be ratified as a treaty, and any consequent legislation will have to be passed by the House. So the power ultimately rests with the House of Commons. The House could stop this thing if it wanted to, and it could agree to it if it felt that it was in the interests of this country.

The message which I get from the House tonight it fairly clear: that there is considerable scepticism, to put it mildly—there is general agreement between the two sides—about the need for this extra money. Certainly, the Commission has not proved its case yet. In fairness to the Commission, one should say that this is a Green Paper. The Commission has not set out the arguments and the figures on which it seeks to argue that it needs this extra money by 1982. We hope that the next document that it puts out as a result of the meetings and deliberations will show quite clearly on what assumptions and figures it says that it will need the extra money by 1982, but at the moment the case is not proved.

As far as I can see, having listened to the debate, the House has considerable scepticism at the moment about the need for extra money, and many hon. Members, of course, would feel that even if the Commission could prove its case on that there would still be a case for not voting the extra money because of the other imbalances in the budget on the customs duties and agricultural levies.

We have listened carefully to the debate. When the Finance and Foreign Ministers' meeting takes place in April we shall make sure that the Commission has proved its case, bringing forward its figures and trying to convince everyone that it has a case for getting this increased revenue. But then it will have to put forward a paper which will be debated in the House, and all the other procedures will have to be gone through. The safeguards are there, and at the end of the day the House will decide.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved,

That this House takes note of EEC Documents Nos. R/3185/78, R/3089/78, R/3090/78, R/3093/78, R/3146/78, R/3312/78 and 4102/79 on the Communities' Budget but notes the regressive and inequitable operation of the present system of financing the Community Budget and urges Her Majesty's Government, in negotiating on any Commission proposals, to press for a system of financing the Budget which contributes to reducing the present disparities and to bringing the level of net national contributions into line with ability to pay.