There may be problems at the GPO, but let us focus on the fact that there was an important meeting at the weekend and that it is difficult, to say the least, for the House comprehensively to debate this matter without some reference to what happened at that meeting, or at least an allusion.

It is ironic that had the Community developed in the way that good Europeans in all members states would wish, and had we by now proceeded to qualified Majority voting on financial and budgetary matters—this is a tentative suggestion, but I am becoming more convinced of it in the context of recent European history —probably a year ago, or little more than that, the panoply of the United Kingdom's rebates would have been agreed, for at that stage only one or two members states were being difficult. The rest were more and more inclined to agree with us.

My right hon. and learned Friend the Member for Hexham (Mr. Rippon), in his otherwise excellent speech, perhaps overdid his omission in not understanding fully the feeling of collective frustration shown in the European Parliament among all political groups at the failure of the other institutions to develop the Community as a cohesive entity. The European Parliament, through various resolutions, through its reaction to the Spinelli report--again, often irrespective of political groups—repeatedly expresses its frustration — indeed anger — that the Community is not making progress at a time when the whole of western Europe is facing such grave issues that it should be doing so. Therefore, it falls exclusively to the European Parliament, which is constitutionally weak -- that is also why it feels frustrated—to try to take this development forward, but it cannot because the member states will not themselves do anything about it and because the European Council is a quasi-autonomous institution overlaying the European Parliament and the Council of Ministers and further slowing down the collective development process.

That applies to the budget as well. That is why it is right for Members of the European Parliament and, I hope, hon. Members here to realise the validity of developing all this, and be in favour of the budget evolving, as well as the EEC as a whole. It is a great sadness that the budget is not larger. What a miserable little instrument it is for cohesive financial decision making, developmental progress, reducing unemployment, building up the regions and so on, particularly when so much goes on agriculture, although that has a positive regional effect that must not be ignored.

The fact remains that the gross myopia of all the member states' Governments, irrespective of political complexion or the majority in any of their Parliaments, has in recent years produced a gradual paralysis of the Community, which is not merely disturbing but terrifying. Therefore, I hope that Her Majesty's Government will understand again their solemn obligations and not only drat which is the immediate prerogative and preoccupation of the debate — getting through the budget crisis and finding a just and fair solution for the United Kingdom..

Without exaggerating that requirement—which is valid but should not be overstated at the expense of other,—there are even more important policy requirements. I hope that on that basis and, I hope, a successful resolution at the end of March at the summit on this short-term crisis, the Government will become one of the most enthusiastic member states of the European Community. They will have seen that, despite the constitutional rigidity and institutional paralysis of the Community, the other members states—allowing for their exasperation with us, which must also be acknowledged, although it does not make me unpatriotic to say this—have come our way and agreed with us. Many of them feel that in Brussels, in the other institutions—the Commission and elsewhere — the United Kingdom has exaggerated these problems, although we feel differently for understandable reasons.

The amounts involved are minuscule and the EEC budget is an unrealistic instrument for gradual EEC fusion, harmonisation, collective policies, or European union, to use that convenient but vague constitutional term. That is why I am enthusiastic about going through the own resources ceiling as soon as possible and do not feel alarmed at the idea of 2 per cent., which may seem radical and over-dramatic, but is not in that sense anything other than the beginning of what could be the first stage of a realistic Community budget.

There is no way in which farm spending can be significantly reduced in absolute terms. It may be possible to reduce some of the surpluses — and even they are exaggerated, except the dairy surpluses—but only to a limited extent. If farm spending is to be kept more or less in broad terms at existing levels, allowing for a normative annual increase, it will be unrealistic to do other than increase the size of the EEC budget and spend money on other desirable areas.

What a farce it is that the British Labour party Is unwilling, despite the fact that it is obsessed with spending public money in this country, and the more the better, to agree to that in the European context, when so many of its Socialist colleagues are involved in the European Parliament and elsewhere. What an exaggeration it is for this national Parliament and others to talk about the need for financial discipline and to avoid bankruptcy in the EEC budget. We all know that that term is even more technical than in the concept and sense of domestic bankruptcy. At least the EEC budget does not have a deficit, as do all other national Parliaments. The budget deficit in Italy is £50 billion; in ours the borrowing requirement is about £9 billion. The EEC budget needs to be bigger. I hope that in future there will be a change in the treaty that will produce a debt ratio gradually developing as long as that money is to be invested in desirable purposes throughout all member states.

There is a need for proper financial discipline, and the Court of Auditors has been rightly critical in a number of important aspects. It also criticises us, as much as the other member states, on certain financial matters, so we are not uniquely virtuous in any sense in that context. There are many criticisms about the way in which money can be transferred from one chapter to another—the so-called continental habit of budgeting and financial expression —and rightly, on both sides of the House, criticism about the way in which amounts can be taken from one annual period to another and all the rest, which is a different approach. Morever, there is no case, other than in the past few years of severe deflation in this country, for saying that there is instrinsically less financial discipline in the management and operation of the EEC budget than there is in the member states, with the possible exception of one or two. I hesitate to mention them now, because I do not want to annoy some of our colleagues on the other side of the Channel.

Therefore, if that is so, let us maintain a sense of realism about these matters. Let us go into the resolution of the present short-term crisis and build up and enlarge the Community budget thereafter with equanimity and enthusiasm, because we know that the United Kingdom will benefit substantially from spending money in other sectors where budgets are held back artificially by the unreality of maintaining the own resources limit, which is getting increasingly out of date.