HC Deb 07 May 1986 vol 97 cc145-6
10. Mr. Knox

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the development of Community policies in the European Community.

Mrs. Chalker

We shall continue to work to make the Community competitive in the new technologies and to seek early completion of the internal market, reform of the common agricultural policy, a reduction in the burdens on business, improvements in world trade and strengthened co-operation in foreign policy.

Mr. Knox

Will my hon. Friend impress on her colleagues at the Treasury that one of the main stumbling blocks to the development of the Community in economic terms is Britain's failure to join the exchange rate mechanism of the EMS?

Mrs. Chalker

I think my hon. Friend knows well that we are ready to join the exchange rate mechanism when we judge the conditions to be right. However, the balance of the arguments still seems to be that it is not in our interests to do so. When it is, we shall join.

Mr. George Robertson

Last month the Foreign Secretary described the fight for budget discipline as being a fight without end. In the light of the Treasury and Civil Service Select Committee's report of today, it seems obvious that the fight is about to end with yet another special levy on the British taxpayers in order to bail out the farm budget of the European Community. Just how long does the hon. Lady believe that this fantasy world of finance will hold up, and how long will the British rebate be safe?

Mrs. Chalker

The British rebate will be safe. Thanks to the pressure of budget discipline in this year's price fixing, there will be a reduction of some £500 million in CAP costs in 1986–87. The hon. Gentleman knows full well that we cannot ignore the 25 per cent. drop in the value of the dollar vis à vis the ecu. We must ensure that the budget council scrutinises the supplementary budget rigorously for potential savings. The Community must stay within the 1.4 per cent. VAT ceiling in 1986–87, in accordance with the Fontainebleau agreement. Every possible effort is being made to stop surpluses at source so that they do not eat up so much of the budget.

Sir John Biggs-Davison

Why were the terms of the Luxembourg compromise not incorporated in the Single European Act?

Mrs. Chalker

There is no need for the terms of the Luxembourg compromise to be incorporated in the Single European Act. It is not altered in any way by the European Communities (Amendment) Bill or the Single European Act. It remains as it was and it will continue to be used if and when necessary.

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