I much enjoyed listening to the fantasies of the hon. Member for Hamilton (Mr. Robertson). I must say that he has worked hard in seeking to develop a sensible and coherent Opposition policy on Europe and I wish him well in his continuing fight, but his description of the Opposition view of Europe was not, I suspect, universally shared by hon. Members on the Benches behind him.

Let me first congratulate my hon. Friend the Member for Wycombe (Mr. Whitney) on his success in the ballot, while not entirely congratulating him on the timing of that success. I think that the whole House listened to his contribution with considerable interest. I remember vividly his speech in April 1982 and tonight's speech continued in the tradition which he started then. Whatever view we hold of what he said, it was a courageous and consistent speech.

Let me next deal with some of the individual points that have been made, and apologise sincerely for the absence of my right hon. Friend the Minister of State, who I am sure would much rather be here at this time of the morning than attending the Foreign Affairs Council in Brussels. The House will be looking forward to the contributions by my hon. Friend the Member for Wycombe to the various scrutiny debates on European documents. An interesting discussion is now in progress—it is not a matter for Ministers in the Foreign and Commonwealth Office—about how we manage our scrutiny and assessment of European legislation, and I am sure that that debate will continue.

My hon. Friend commented on the speech made by my right hon. Friend the Prime Minister in Bruges. Unlike, I suspect, the hon. Member for Hamilton, he had clearly read the speech in considerable detail, and he drew attention to the powerful points made in it. The bedrock of my right hon. Friend's speech was her clear statement that Britain's destiny is in Europe, and that Britain is as committed to the European Community as any other member country.

Of course the Europe of the future will continue to be made up of different national personalities and traditions. It is not only my right hon. Friend the Prime Minister who believes that; Chancellor Kohl of the Federal Republic of Germany has said clearly that the construction of Europe must not mean the suppression of national identities. All of us in Europe want to build a community that is able to ensure the future prosperity and security of its peoples in the harshly competitive world to which my right hon. Friend referred. Her message is that Europeans should work closely and effectively together on the things that we do better together, rather than on things that we do better alone.

My hon. Friend also referred to frontier controls. It will be important, because of 1992, to minimise delays at frontiers and to make travel easier for EC citizens. However, that does not mean that all frontier controls must be abolished. The EC needs a mechanism that is able to combat terrorism, crime, drug trafficking and illegal immigration. The Rhodes summit reaffirmed that requirement and linked the reduction of further frontier checks with more effective co-operation between member states. As a result of the Rhodes summit, national co-ordinators are to be appointed. They will be responsible for providing assistance over frontier problems.

Not for the first time, the hon. Member for Hamilton ought not to rely on reports in The Guardian. Agreement was reached on health and safety matters at the Council meeting last Friday. I understand that a parliamentary question is to be answered in the near future. It will comment on the outcome of the Council meeting. The hon. Gentleman was right to point out that the Council had to deal with a legal problem, but we believe that there has been a satisfactory outcome. I am sure that he will be scurrying to Hansard to read the answer.

The hon. Gentleman referred to progress on monetary co-operation in the so-called Delors committee. The committee's discussions continue. It is due to complete its proceedings in good time to enable the Minister for Economic Affairs and the Minister for Finance to examine the committee's recommendations before the European Council meeting in Madrid.

My hon. Friend the Member for Wycombe said that he thought that the United Kingdom was being left behind on monetary co-operation. However, we have led the way over the abolition of restrictions on the movement of capital and exchange controls. That is a fundamental first step, and we are delighted that the rest of the Community is following our example. A practical sign of our commitment to progress is the introduction of the ecu-denominated Treasury bond. That is an important step.

The hon. Member for Hamilton, casting around for things to say—for which I do not blame him at this time in the morning—asked about the annual report of the Court of Auditors and referred to agriculture fraud. The report states that futher action needs to be taken. We intend fully to support the report. That is consistent with our approach to agriculture. We have been one of the leaders in the fight against fraud in the EC.

The hon. Member for Hamilton expressed concern about the so-called 10-month year. That was a one-off measure to which the hon. Member has referred on previous occasions. It was adopted by the Council in October 1987. At the February meeting of the Council in Brussels, a two-and-a-half month delay was agreed for the payment of advances. We believe that the Council's decision will improve budgetary control over agriculture spending.

This debate provides a valuable opportunity to assess the state of the European Community at the end of 1988 and to look briefly at some of the prospects for next year.

In 1988 we have seen major changes in the way in which the Community's finances are run. I refer in particular to the rules governing the operation of the CAP. In February, the Council reached agreement on a series of stabilisers for cereals, oil seeds and other principle agricultural commodities. The Community has given those stabilisers legal backing through a series of detailed regulations. For the first time, we now have an important automatic mechanism for controlling the growth of financial support to the agricultural sector, a signal to the outside world that we really mean to control the CAP.

The stabilisers are working. Since the summer there have been automatic price cuts for a series of crops. It is intended that there will be a 3 per cent. price cut in cereals in 1989. We have also witnessed major reductions in surplus stocks of agricultural products; for example, beef stocks have fallen by 25 per cent. during the past 12 months.

The second major element of improved budget discipline agreed last February was a legally binding financial guideline for agricultural spending. In future, spending on the CAP will be able to grow by no more than three quarters of the rate of Community GNP. That is about 2 per cent. per annum in real terms. That means that CAP support will represent a steadily shrinking percentage of the Community's GNP.

In the first budget introduced under the new procedures, provision for agriculture is fully £1·2 billion below the guideline agreed in February. I am sure that we all welcome that development.

Hon. Members may have felt something missing from their lives this year—the budget crisis which normally reverberates around the Community at this time of year. The peaceful, almost routine procedure in which the 1989 budget has been adopted is a good illustration of the way in which the Community has acknowledged the truth of a persistent United Kingdom theme that a sound Community cannot be built on unsound foundations. The future financing agreement that we secured in February at least gives the Community a sound foundation of budgetary discipline. All parties—the Commission, the Council and the Parliament—now accept that that reform was right, was long overdue and must continue. [The Parliamentary Under-Secretary of State for Foreign and commonwealth Affairs]

At the Hanover European Council in June, my right hon. Friend the Prime Minister and her colleagues agreed that progress towards the single market is now irreversible. That means that we really will have a single market with all the opportunities that that will bring for British and European business. Of course, as the House knows, there is a great deal still to be done. The Hanover Council laid down four priorities for work in the immediate future which are important for the United Kingdom.

The Greek presidency in the second half of this year has made solid progress, for example by achieving a common position on the public works directive and by opening up public procurement to competition throughout the Community. That benefits the consumer and British business. The Greeks have also put together a package of key food law measures—a matter to which we attach great importance. I hope that further progress will be made at the last internal market Council for the year which is taking place tomorrow.

The Spanish presidency will begin work in the new year with a fair wind. The priorities fixed at Hanover were confirmed at the recent Rhodes Council. There is plenty for the Spanish presidency to do, and for the French presidency that follows it.

Liberalisation, competition and deregulation must not be limited to the Community's internal affairs. The Rhodes European Council devoted considerable time to discussing the Community's role in the world. Heads of Government issued a declaration emphasising the Community's important contribution to sustaining a liberal economic and trading environment—a clear message to the world that 1992 will not lead to greater external protection as internal barriers come down. In other words, as my hon. Friend the Member for Wycombe said, there will be no fortress Europe.

We want the single market to contribute directly to the greater liberalisation of world trade. That liberalisation is essential if the world economy is to continue to expand. The best way to pursue that aim is through multilateral negotiations in the GATT. The United Kingdom and all member states want the multilateral system to be strengthened and expanded. The current Uruguay round is essential to that process. As the House knows, we are now at the halfway point of the round. Some good progress has been made but there is still much to do.

We were disappointed when the ministerial meeting earlier this month was unable to agree on a detailed framework for negotiations on the reform of agriculture. The Community made great efforts to find common ground with the United States. However, the United States insisted on pressing for a commitment to the total elimination of agricultural support by an agreed deadline. In our view, that was not politically feasible. We trust that the new United States Administration will find it possible to be more flexible. All concerned will have to work constructively in the coming weeks if agreement is to be achieved. We shall be doing all that we can to achieve that end.

The strengthening of the financial foundations of the Community, the progress towards the single market within the Community and the challenges of GATT underline the importance to us of the way in which the Community is developing. Our commitment is not in doubt. As my right hon. Friend the Prime Minister said in her Bruges speech: our destiny is in Europe, as part of the Community. One cannot have a firmer commitment than that.

At the end of a year of achievements, we can face with confidence the challenges that the Europe of 1992 will bring. In 1988 we have secured common-sense budgetary reforms and the acceleration of the drive towards the single market. Both developments have been welcomed by the Majority of hon. Members on both sides of the House.

Looking ahead, I see the steady development of a stronger enterprise Europe with less regulation and less interference with markets and, as a result, more growth and more jobs. I see the steady development of a Community, the growing economic influence of which is reflected in greater political influence across the world with the United Kingdom playing a prominent part.

I am grateful to my hon. Friend the Member for Wycombe for drawing our attention to the Community's development, for inspiring an unusual and lively debate and for obtaining an optimistic view of the Opposition's policies in Europe from the hon. Member for Hamilton.