§ Q1. Mr. Marlow
asked the Prime Minister if she will give a progress report on the negotiations concerning the net United Kingdom contribution to the European Community budget.
§ The Prime Minister (Mrs. Margaret Thatcher)
The March European Council agreed that the Commission would now make specific proposals on a lasting solution to the budget problem, and the Council of Foreign Ministers will report its conclusions to the June European Council. The Foreign Ministers are also committed to reporting conclusions on an interim solution, and it is agreed that provision for refunds for the 1983 budget year will be incorporated in the draft budget for 1984.
§ Mr. Marlow
Since European moneys are spent less prudently and with less control than moneys spent by Her Majesty's Government, and since my right hon. Friend is committed to the overall reduction of public expenditure, will she confirm to a grateful House that on no account will her Government permit any increase in European own resources?
§ The Prime Minister
I assume that my hon. Friend refers to the 1 per cent. VAT ceiling. I am on record as saying clearly that that should not be exceeded, as is the Federal Republic of Germany. Own resources in general are quite sufficient and will continue to be so for many years, provided that the common agricultural policy is brought under proper control and a smaller proportion of the budget is spent on it than at present.
§ Mr. Hooley
Is the Prime Minister aware that she has been talking about a lasting solution for the past two years? Will she have the courage to admit that there is no such thing as a lasting solution because fellow states in the EC do not want it and have no intention of granting it?
§ The Prime Minister
It was thought that the 1 per cent. VAT ceiling would be reached before it has been and that that would give an opportunity fundamentally to revise the structure of the European budget. It was not reached, but many more countries are now searching for a lasting solution because they car see that if agricultural expenditure continues as it is there will not be sufficient resources. That gives an opportunity for fundamental reform that was not there previously.