The European Council on 21 and 22 March agreed that the Commission would submit specific proposals as soon as possible on the future financing of the Community, to include a lasting solution to the problem of budgetary imbalances. The Foreign Affairs Council will report to the June European Council its conclusions both on the long term and on the arrangements for the interim until the lasting solution can be implemented. Provision for United Kingdom refunds in respect of 1983 will be incorporated in the draft Community budget for 1984.
Does my right hon. Friend agree that the extension of common policies for regional development, energy and transport could play a real part in the long-term resolution of our budget problem?
I think that the development of these policies would make a contribution to the long-term wellbeing of the Community as a whole. However, I think that their effect upon the budget problem would be minimal. The policies that my hon. Friend has in mind will probably not be implemented until the 1983 budget has been negotiated, and, perhaps, the budgets of later years.
Does the right hon. Gentleman agree that currency stability is an important condition for the resolving of the budgetary problem? Will he be prepared to make his contribution to resolving the problem by offering British entry into the European monetary system at what is still an extremely propitious moment?
That issue is kept under constant review by my right hon. and learned Friend the Chancellor of the Exchequer. If he were contemplating a change of policy, he would announce that himself. The variation in exchange rates is an inhibiting factor in international trade, but I do not think that it is fundamental to the solution of the budget problem.
Will my right hon. Friend confirm that it is still the Government's intention that the issue of the 1983 budget rebate for the United Kingdom should be resolved at the June meeting? Can he say whether he thinks that will be the case in view of recent speculation?
That was the clear wish of the European Council at the meeting that I attended. We shall see how things develop. I have every reason to suppose that there is now a clear intention, which was missing before, to solve the 1983 budget issue reasonably quickly. I think that the longer term solution will take longer to reach, and so I hope that a conclusion will be reached in the way that the European Council decided.
Is the right hon. Gentleman ignoring what happened at the European assembly yesterday, when the EC President, Mr. Thorn, made it clear that the Commission would not be taking any part in the negotiations? Does this not mean that the Government's hopes of achieving a June settlement have been dashed? Is he aware that hon. Members on both sides of the House have been saying that the European assembly is now becoming a European Parliament and is flexing its muscles, taking decisions and putting Parliaments such as this into an impossible position?
I have not seen a full text of the speech of the President of the Commission, but I can tell the hon. Gentleman that, having been at the European Council, I know what was decided. The Commission, of course, will act in accordance with its decision. Therefore, I have every reason to suppose that what was decided there will be carried out.
As the right hon. Gentleman has indicated that the paper from the Commission is intended to provide a long-term solution, is it not envisaged that it might contain some mechanism to allow the budget to be enlarged?
That has not yet been addressed. The Commission has submitted only a discussion paper on the long-term solution, and that has not yet been addressed in any detail. There has been one tour de table and member states have been invited to submit their views on it. As I have said, it has not yet been addressed, but it will be at subsequent meetings of the Foreign Affairs Council.