asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Soviet relations.

We shall continue to seek to broaden understanding between East and West and to improve Anglo-Soviet relations. The recent visit of Mr. Kornienko, the Soviet First Deputy Foreign Minister, to London was a useful step in this process. We shall hope to build on it when my right hon. and learned Friend visits Moscow in July.

Will my hon. Friend ask the Foreign Secretary to tell the Russian leaders, when he sees them in July, of the whole of the British people's passionate wish for peace? Will he also ask the Foreign Secretary to tell the Russian leaders not to be misled by the campaigns for one-sided nuclear disarmament, which do not represent the majority view of the British people?

I very much agree with my hon. Friend. He will remember that the late President Andropov said that those who believed in unilateral disarmament were naive. This Government will not subject themselves to that type of accusation.

Does the Minister share the concern about abuses of the Soviet postal system which mean that mail posted here for recorded delivery is not delivered and is often not returned to senders here?

I agree that such interference is a sign of the Soviet leaders' inability to allow their people to be exposed to ideas which are not approved. The whole spirit of the Helsinki agreement should facilitate such exchanges of information.

Is my hon. Friend aware of the unhelpful editorial in Pravda recently about the decision by Her Majesty's Government, rightly, to break off diplomatic relations with Libya? What representations have we made to the Soviet Union, and what response has been received?

Her Majesty's ambassador raised that matter with Mr. Kornienko, the Soviet First Deputy Foreign Minister, yesterday. The reply was to the effect that what appeared in Pravda did not necessarily reflect the Soviet authorities' views and that the Central Committee of the Communist Party of the Soviet Union had not yet come to a view on the matter.

Does the Minister agree that, at a time when almost all negotiations on disarmament are deadlocked, it is very important that the arms race is not allowed to enter a new field? Will the Minister therefore strongly support proposals for the demilitarisation of outer space, which is as much a British interest as an international one?

The right hon. Gentleman will he aware that the concept of the demilitarisation of outer space is attractive. We are always willing to consider constructive proposals which might lead to that end.

asked the Secretary of State Foreign and Commonwealth Affairs if he will make a statement on Anglo-Jordanian relations.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Jordanian relations.

We have excellent relations with Jordan. The successful state visit to Jordan last month demonstrated the close ties of friendship between our two countries. During the visit I had talks with King Hussein, Crown Prince Hassan and the Foreign Minister.

Does my hon. Friend agree that the moderate and reasonable attitude of states such as Jordan and Egypt should be reinforced by Britain? Does he further agree that after the Israeli general election we could use their responsible positions as a basis for a new diplomatic initiative?

I agree that the stability of countries such as Jordan and Egypt is of great importance to the middle east and to us. If it turns out that King Hussein, supported by other moderate friends in the middle east, comes forward with constructive and sensible proposals which might help to resolve the Arab-Israeli dispute, I am sure that we and the European Community will wish to give them every encouragement.

Does my hon. Friend accept that the stability and common sense shown by Jordan and its leaders over the years is greatly to be welcomed? Although we may not always see eye to eye on every issue, both this country and Jordan hope that there will be opportunities for progress in the middle east in which both countries can share.

I agree with my hon. Friend. The success of the state visit demonstrated not only the long-standing historic ties but the important close political and economic relationship that we have with Jordan.

Does the Minister agree that during her successful visit to Jordan Her Majesty was made aware of a serious impediment to any further Jordanian or other middle east peace proposals, namely, the continuing settlement policy of the Israeli Government? Unless the British and United States Governments impress upon the Israeli Government the fact that these settlements must end, there can be no further proposals from the Arab side.

It is self-evident that there can be no prospect of any start to a dialogue about this dispute unless the neighbouring Arab countries, the Palestinians and the Israelis are prepared to take part. It is important that during the next few months, with elections pending in Israel and elsewhere, the ground is prepared by the parties involved to ascertain whether in the foreseeable future—perhaps in the autumn—it will be possible to forge ahead with discussions about the resolution of their problems.

Does my hon. Friend agree that, given the American electoral frenzy, it is unlikely that there will be any sensible American initiative on the middle east in the coming year? Does that not make it more urgent that there should be a European initiative especially to prevent the continuing policy of settlements, which is illegal and provocative?

I agree with my hon. Friend that the fact that elections are taking place not only in the United States but in Israel hampers the prospect of any immediate move forward. I agree with my hon. Friend also that it is important that there should not be stagnation. On 27 March the European Community meeting of Foreign Ministers issued a statement giving strong support to those parties prepared to put forward constructive proposals based on two fundamental principles — the right of the Palestinians to self-determination and the right of Israel to exist within secure boundaries.

What is the Minister's reaction to the apparent desire by King Hussein to involve the Soviet Union in an ultimate middle east settlement? As no settlement in the middle east is possible without the assent of both the super powers, is this not a welcome and useful step towards realism?

The prerequisite of any progress is that the parties should agree among themselves that there is a basis for discussion. That is the most important first stage. Clearly, the United States and the Soviet Union have an interest in that part of the world, and it goes without saying that they must both play a constructive role in the longer term if there is to be a peaceful resolution of the problem.

asked the Secretary of State for Foreign and Commonwealth Affairs what the North Atlantic Treaty Organisation information budget for 1983–84 is in real terms compared with those of 1978–79, 1973–74 and 1968–69, respectively; and if he will make a statement.

The North Atlantic Treaty Organisation information budget is assessed in calendar years. The sum allocated in Belgian francs was as follows: 1969, 46,940 million; 1974, 58,000 million; 1979, 77,200 million; and 1984, 128,000 million. Over the whole period since 1969 this represents a slight decline in real terms, compared to the Belgian cost of living index. The increase in the budget since 1979, however, has been substantially greater than the rise in the cost of living index. This increase will help to maintain the work of the NATO information service, which we strongly support.

I congratulate my hon. Friend on the improvement since 1979, but must we not do still better in view of the tremendous effort of Russia and her satellites against NATO's peaceful aims? Would it not be worth sacrificing a cruise missile, a tank or an aircraft or two to obtain the funds with which to improve NATO information services?

I know of my hon. Friend's strong interest in this matter in his capacity as chairman of the Atlantic Education Committee. He plays an active, constructive and helpful role on that score. This is the 35th anniversary of the foundation of NATO. It is an important time to remind people, especially the young, of NATO's objective. NATO is a defensive organisation designed to defend the free world against aggression. It is important that adequate sums of money are made available to explain the purposes of NATO to the British community.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of negotiations on the future of Hong Kong.

The last round of talks with the Chinese Government was on 11 and 12 April, and the next will be on 27 and 28 April.

In the light of the agreement reached and the statement made by my right hon. and learned Friend the Foreign Secretary in Hong Kong on Friday, is there now a good prospect of reaching an agreement to safeguard the continuity of the way of life of all the people in Hong Kong, both up to and beyond 1997?

The overwhelming desire of the people of Hong Kong is to ensure the continuity of every facet of their way of life. As a result of the discussions, there is clearly a desire by both the Chinese Government and ourselves to reach an agreement to achieve that.

Does the Minister accept that, while there is broad acceptance that the future of Hong Kong must be sorted out bilaterally, the British Government nevertheless may have a duty to provide a future for the people of Hong Kong, many of whom have fled from the Communist regime? Does the hon. Gentleman further accept that there may be international dimensions to the problem, which should be considered now?

The best way in which we can serve the people of Hong Kong is to do our utmost to reach an agreement with the Chinese Government which enables the way of life of the Hong Kong people to continue as it is now. That includes their freedoms, their legal systems and their commercial way of life. That is the best contribution that we can make, and we shall do our best to achieve it.

Is not one of the main concerns of many Hong Kong people the fact that if we reach a satisfactory agreement with China it is important to obtain an assurance that it will last for a long time? Is not the important question that of durability? It is important for the maintenance of confidence in Hong Kong and for its prosperity. Did my right hon. and learned Friend the Foreign Secretary press that point on the Chinese Government?

My hon. Friend knows a great deal about the Hong Kong question. I assure him that my right hon. and learned Friend pressed this matter very strongly. As my hon. Friends knows, the Chinese Government have stated that any agreement reached should last for at least 50 years from 1997. Obviously, it is important to seek an agreement between our two Governments of an international nature that is as binding as possible. However, at the end of the day, the best guarantee is the self-interest of both Governments to achieve something that allows the people of Hong Kong to continue to flourish.

Does my hon. Friend accept that there is widespread support for any effort to ensure that the agreement is reduced to writing and is capable of being recognised internationally? Many people in Hong Kong have experience of previous undertakings given in 1949 being ignored. Did not many people leave China for Hong Kong because the constitution was not respected? Have not many more people been born in Hong Kong and brought up to expect those personal freedoms which we have a responsibility to ensure are continued in best measure?

One of the values of my right hon. and learned Friend's visit to Peking last week was that he was able to discuss these matters very fully with the Chinese and to explain to them that, while we both want agreement, it is important to understand that the Chinese people living in Hong Kong must feel that their way of life, as they know it and appreciate it, can continue, and that whatever agreement is reached gives as much assurance as possible that that will take place.

Is the hon. Gentleman aware that hon. Members on both sides of the House have tried to follow the negotiations carried out by the Foreign Secretary during his visit to the Far East? On a matter of this complexity and delicacy, the official Opposition feel that it would be convenient if the Government would agree to a debate on the matter as soon as possible after the Foreign Secretary returns.

I am grateful to the right hon. Gentleman for his comments. I hope that the House will have an early opportunity to debate this important subject after my right hon. and learned Friend's return.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the future intitiatives he intends taking with European Economic Community partners in connection with seeking a peaceful solution to the situation in the Lebanon.

In their statement of 27 March Foreign Ministers of the Ten reaffirmed their hope for progress towards reconciliation in Lebanon and their support for the early withdrawal of foreign forces from Lebanese territory. The initiative for making progress towards both these objectives lies first with the Lebanese parties, but we shall continue to work with them and others to help restore peace and stability in Lebanon.

Will the Minister accept that, while both the Soviet Union and the United States have interests in the area, one of the difficulties is that the two power blocs are irresolute in the pursuit of those interests, and that perhaps what is needed there is for a third party to come in, with the agreement of each side in the dispute, to try to reconcile them?

It is very important for the internal parties and the immediate external parties concerned to see whether they can resolve the problem themselves. It is disappointing that the Lausanne conference did not succeed, but I think that any ultimate agreement that is reached can succeed only if all the parties concerned in the matter—above all, the internal parties—find a way of reconciling their differences.

In their thoughts about the situation in the Lebanon, did the Foreign Ministers accept that there is a difference between the status of the Israeli forces in the Lebanon, who got there through military adventurism and unprovoked invasion, and the Syrian forces, who were invited to be there? The difference in status is very important to the consideration of the issue.

It is important for all external forces to withdraw. That is the most important aspect of the whole problem. It is also important for the internal parties to the conflict to resolve their differences. It is, of course, the case that the external parties concerned came in on different bases and at different stages, but the most important thing to concentrate upon is the withdrawal of all foreign forces.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the security of British diplomats abroad.

Security arrangements for British officials serving overseas are kept under constant review in the light of the known threat. We take this matter very seriously. The need to do so was illustrated most recently in Athens. The tragic and senseless murder of Mr. Kenneth Whitty will be deplored by the whole House which will. I feel sure, wish to register its deepest sympathy with Mrs. Whitty and her family.

I thank the Minister for his reply. Following the closure of the embassy and the withdrawal of the diplomats from Libya—and, I understand, the acceptance by Italy to act as our mediator in that territory—what instructions or advice have been given to the United Kingdom citizens in Libya, and what arrangements are being' made to bring them home if the situation deteriorates?

The House will be aware that my right hon. and learned Friend the Home Secretary is to make a statement about the situation in the Libyan People's Bureau, as it called, in London and on the state of affairs in Tripoli. We have issued advice to British residents in Libya.

Is there any truth in newspaper reports today that the Libyan authorities are trying to prevent the movement of diplomats out of Libya? If so, will the Government remind the Libyans that that would be a complete breach of the Vienna convention?

I agree with my right hon. and learned Friend that that would indeed be a breach of the Vienna convention. I ask the House, however, to await the statement of my right hon. and learned Friend the Home Secretary, which is to follow Question Time.

Does my hon. Friend agree that threats against the personal safety of diplomats are to some extent an occupational hazard and that international relations should not be conducted or determined on the basis of such events? Does he further agree that the proper course is to co-operate with like-minded states in having nothing to do with those states which refuse to accept the normal standards of civilised behaviour in these matters?

I certainly accept that it is essential that we co-operate with all like-minded states to ensure proper adherence to the conventions. The Vienna convention facilitates, and is indeed the prerequisite of, sensible relations between individual nations.

I understand that the Home Secretary is to make a general statement on the affair between Her Majesty's Government and Libya, but will the Parliamentary Under-Secretary of State answer two specific questions of Foreign Office concern? First, is he satisfied that the Italian Government have sufficient personnel in Tripoli to handle the potentially massive responsibilities that will fall on Italy as the protecting power with the addition of some 8,000 British citizens to the 14,000 Italian citizens for whose interests the Italian authorities are already responsible? Secondly, has the hon. Gentleman any reason to doubt that the Libyan authorities will allow existing British personnel and their families to leave Libya by the end of the week?

I believe that it will be for the benefit of the House to await the statement of my right hon. and learned Friend the Home Secretary, who will seek to cover both the Home Office points and the Foreign Office points to which the right hon. Gentleman refers. In general, I can tell the House that we are grateful to the Italian Government for agreeing to act as the protecting power. We are hopeful that the arrangements that we are making for our own people in Libya and the advice that we have given to diplomatic personnel and to other British subjects in Libya will ensure their safety.

asked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in bilateral negotiations with the Argentine Government.

On 6 April the Swiss protecting power delivered our response to the Argentine comments on the specific ideas that we put forward on 26 January. We are ready for official talks on the normalisation of relations between our two countries. Such talks cannot include discussion of sovereignty over the Falkland Islands.

Is the Minister aware that in Paris yesterday Senor Caputo spoke in conciliatory terms about what he called a diplomatic dialogue with Britain and a policy of small steps? Will the Government now state clearly that they are prepared to enter into negotiations in the spirit suggested by Senor Caputo and on a two-tier basis, taking smaller, bilateral matters first and perhaps putting the whole subject of sovereignty on the back burner? Does the Minister agree that if the Government's response is seen to be both negative and tardy we shall risk losing the support of our European partners on this matter?

I do not believe that the Government's initiatives can be described as tardy or lacking in forward movement, as it was our proposals in January which initiated the dialogue that we have sustained so far. As I have said, we now await the response to our reply of 6 April. I repeat, however, that none of the talks that we have proposed can include discussion of sovereignty over the Falkland Islands.

Would there be any advantage in seeking to begin discussions on the possibility of increasing Anglo-Argentine trade, perhaps as a forerunner to the type of discussion to which my hon. Friend refers?

I am happy to confirm that the Government are interested in the normalisation of many aspects of our relations with Argentina, and trade would certainly be foremost among those.

Is there not ominous evidence that the Argentine military have not gone away, in that the Argentine Government have ordered six submarines? Would it not be in our national interest to help the civilian Government of Mr. Caputo as much as possible? What is the British content—in terms of navigation equipment and other electronics — of the submarines built for Argentina in West Germany under licence to Buenos Aires?

The policy of the Argentine Government on arms purchases is a matter for that Government. It is for us to ensure the security of the Falkland Islands. We very much look forward to a formal declaration by the Argentine Government of the cessation of hostilities and the renunciation of future force. I am not in a position to answer the technical part of the hon. Gentleman's question.

Some of the surface equipment built for Argentina came from this country. That being so, is the the hon. Gentleman happy about the fact that the new submarines are to be built in Germany?

I shall write to the hon. Gentleman about the content of the submarines. Our own relationship with Germany has been honoured in terms of the solidarity shown by West Germany, as by our other European allies, in our relations with Argentina.

Is my hon. Friend, through the British interests section, pursuing the case of Daisy Hobson, a British citizen who has been incarcerated in Argentina for eight years, having been tried in a travesty of a case by the military junta? Will my hon. Friend assure the House that he will pursue this case and try to ensure an early release? There are signs that the new Government will release Daisy Hobson soon. For example, she is now held in an open prison.

We are pursuing that case closely and hope very much that the action that is contemplated will be effective.

Is it the policy of the Government that any bilateral talks with Argentina will cover the Falkland Island and not the Falkland Islands dependencies?

Our interest is in restoring normal relations with Argentina. We are quite clear about our relationship, in terms of sovereignty, to the Falkland Islands and the Falkland Island dependencies.

asked the Secretary of State for Foreign and Commonwealth Affairs what steps are being taken to improve understanding and communication between the Governments and the peoples of Commonwealth countries.

We play an active part in the full range of Commonwealth activities. We fully support and endorse the programmes of the Commonwealth Secretariat, Commonwealth Foundation and Commonwealth Institute in achieving a greater under-standing amongst members of the Commonwealth.

I am grateful to my hon. Friend for that reply. Does he not agree that Her Majesty the Queen makes an outstanding contribution to the sense of cohesion and understanding between members of this remarkable free association? Will he pursue all avenues to improve education, student exchange and mutual aid within the Commonwealth framework?

I am happy to agree with my hon. Friend about the contribution of Her Majesty the Queen to the unique character of the Commonwealth, and to assure him that the Government will continue — within the limitations of the resources available — to encourage student exchange and co-operation.

Has the Minister seen recent press reports about the unsatisfactory nature of public electricity and water supplies in Grenada? In view of the fact that the Select Committee paid attention to those matters in January, and that those items are part of the British aid package to Grenada, will the hon. Gentleman find out whether there is any fault in communications between Her Majesty's Government and the authorities in Grenada?

I shall be happy to draw the attention of my right hon. Friend the Minister for Overseas Development to that point. I remind the House that we have contributed £1·75 million in special assistance to Grenada. We shall reply to the report of the Foreign Affairs Committee on Grenada towards the end of May.

No doubt my hon. Friend will have read press reports in the past few days about increasing offers of investment by the Soviet Union in the expansion of the Indian Navy. Does he feel that the remarkable increase in the power of the Indian Navy that such investment implies will increase understanding between Commonwealth nations — especially those which are members of NATO — in view of the increasing threat to the area represented by the Soviet Union's recent offensive in Afghanistan?

We seem to be going some way from the original question. India co-operates closely with the British Government within the Commonwealth. I assure my hon. Friend that although there might be co-operation between India and the Soviet Union there is substantial co-operation between British industries, including defence industries, and the Republic of India.

Does the Minister agree that nothing will damage Commonwealth co-operation and development more than the prospective tour of South Africa by the English Rugby Football Union? Is it not time that the Government followed up their hitherto fairly tough words with an even more robust attitude to the tour so that its damaging implications for the Commonwealth games can be avoided?

I am glad that the hon. Gentleman accepts that the Government have used tough words in regard to the proposed tour by the English Rugby Football Union. I hope that he will also accept that we live in a country in which individuals and societies such as the English Rugby Football Union must make their own decisions in such matters.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the political implications of United Kingdom trading links with South Africa.

It is our policy that civil trade should be determined by commercial considerations. This implies neither approval nor disapproval of the policies of the countries concerned.

As there has been little progress in making South Africa change its policy of apartheid, which is utterly unacceptable and condemned throughout the world, is it not time that the Government considered taking steps towards a full and effective trade ban with South Africa and attempted a ban on direct and indirect investment there to make South Africa rethink its policy?

The hon. Gentleman has provided no evidence to suggest that an economic ban would have the effect which he obviously desires. He should also take into account the fragile economic circumstances of some countries surrounding South Africa and the devastating effect that an embargo on trade with South Africa would have on countries in the region.

Does my hon. Friend agree that there is a tremendous amount of hypocrisy in regard to South Africa? Does he agree that many countries and many right hon. and hon. Members apply double standards over South Africa, as there are many countries that have far more repressive societies than South Africa and yet they are never criticised?

My hon. Friend is right to draw attention to the danger of applying double standards. There are many oppressive regimes in various parts of the world but I must add that South Africa is the only country, that applies a policy of segregation based on the colour of its citizens.

Will the Minister consider severing trade with South Africa in commodities such as athletes, who are coming to Britain in search of pseudo-national glory and newspaper circulation?

The hon. Gentleman will be aware that the Government observe the United Nations mandatory embargo on arms sales. We do not believe it appropriate to restrict other forms of trade or to restrict the movement of individuals who wish to travel to South Africa or from that country to Britain.

Does the Minister agree that we should not take too much notice of financial interests, as expressed on the Conservative Benches, but that we should run down our trade with South Africa? Does he further agree that that aim is not achieved by building up sporting links with South Africa through allowing the British rugby team to go there?

Those who have visited South Africa in recent years will have noticed that the economic impossibility of apartheid is becoming increasingly obvious throughout South African society. Today one sees the blacks playing an economic role in South Africa that is significantly different from what would have been found some years ago. It is difficult to believe that a policy of economic embargo, even if it were to be successful, would assist in that progress.

Does my hon. Friend agree that the present moves by certain Labour authorities to victimise a young British citizen in pursuance of their hatred of South Africa is entirely reprehensible?

I agree that local authorities should take into account their proper responsibilities and not seek to involve themselves in matters for which they are not accountable to their ratepayers.

May we applaud the Minister's willingness to tell his own side the fact of life that no other country in the world discriminates against the majority of its population on the grounds of colour? In view of our longer-term and trading interests in the rest of Africa, will he seek to discourage new investment by British firms in South Africa?

I am afraid that I cannot agree with the hon. Gentleman. I do not believe that it would be in the interests of the people of South Africa, black or white, for Britain or the international community to impose an economic embargo against South Africa. Nor do I believe that it would be possible in practice to enforce such an embargo even if it were attempted.

asked the Secretary of State for Foreign and Commonwealth Affairs at what meetings of the Foreign Affairs Council proposals for increased political integration of the European Community have been discussed; and what has been the attitude of the Government to these proposals.

There has been no discussion of any proposals for increased political integration at recent meetings of the Foreign Affairs Council.

As a score or more of British Conservative MEPs recently voted in favour of the Spinelli proposals for closer political integration of the European states, is it now Government policy to work towards closer political integration of the EEC — in other words, a united states of Europe? If a closer political integration of the EEC takes place in future, which would include Spain, how would that affect the sovereignty of Gibraltar?

I understand that the vote to which the hon. Gentleman referred was a free vote among Conservative Members of the European Parliament and it is for individual Members of the European Parliament to take responsibility for the way in which they voted on that occasion. It is not the Government's policy to work towards a united states of Europe. We have made it clear that access between Spain and Gibraltar must be identical to that between Spain and other parts of the European Community when Spain joins the EEC.

On the question of political integration in Europe, have we had any support at all from any of our partners in the EEC over the Libyan embassy episode?

I ask my hon. Friend to await the statement of my right hon. and learned Friend the Home Secretary. He will be addressing the House shortly on that matter.

How does the Minister reconcile his answer that the Government are not looking towards the political integration of Europe with the statements made by the Prime Minister on her return from various summit meetings at Dublin, Luxembourg, Stuttgart and Athens, which contain specific proposals and ideas for developing political integration in Europe? Is the Minister not now fully acquainted with what the Prime Minister is doing behind his back?

There are many areas in which we wish to work towards greater European unity. However, the Government have always made it clear that the concept of a federal Europe — which is what I think the hon. Gentleman's hon. Friend, the Member for Greenock and Port Glasgow (Dr. Godman) was referring to—is not something that commends itself to them.

I understand that the prospect of a federal Europe may not be attractive to the Government, but will my hon. Friend tell the House exactly what form of increased political integration the Government do favour?

There are many areas of political co-operation where greater European unity can be of great value. For example, in many aspects of political co-operation over foreign policy the Community has been able to speak with a single voice. Wherever it is able to do so it carries that much greater authority than any individual Member state of the Community would be able to do on such issues. There may be other areas where closer political co-operation can be of value, not only to Britain, but to the interests of western Europe as a whole.

Is the Minister aware that at this morning's meeting of the national executive committee of the Labour party we came out conclusively against any further moves towards political integration, especially on the ground that the Common Market has cost the British taxpayer £4,000 million in the last 10 years in contributions alone, it has now gone bankrupt, and it is asking for another £1,600 million? How on earth can he get integration when the whole thing is in a state of collapse?

When the hon. Gentleman refers to a state of collapse, I am not sure whether he is talking about the Community or the Labour party. Whatever problems the European Community may have in trying to achieve unity, they are nothing compared with the attempts of his own party.

asked the Secretary of State for Foreign and Commonwealth Affairs what proposals he is considering for applying the funds which are due to the United Kingdom as its rebate from the European Community.

The draft regulations put forward by the Commission after discussion with Her Majesty's Government provide for Community contributions to United Kingdom public sector projects, measures and schemes in the field of employment, energy and transport.

I thank the Minister for his reply. Will he give the House an assurance that he will seek urgently to ensure that all the outstanding funds from the European Community come to the United Kingdom, and that those funds are applied to help the people in my constituency who have witnessed their homes being flooded out twice this year already by the River Cart bursting its banks?

I assure the hon. Gentleman that it is our objective to ensure an early payment of these funds. The United Kingdom has submitted a list of projects to the Commission, including a number of projects in Scotland in the three sectors to which I referred. I cannot comment at present on whether the suggestion that the hon. Gentleman has made is included in the projects.

Will my hon. Friend consider applying some of the funds that will be available from the rebate due to this country to help the dairy farmers of this country, who have been placed in the most impossible position by the agriculture package that was agreed in Brussels? Will he give this assurance and recognise that if he does it will be no more than the assurances that have been given to many other industries, such as steel and coal, which have been subjected to restructuring within the European Economic Community?

The funds to which my hon. Friend refers, and the purposes for which they are to be used, have already been determined. As to the position of dairy farmers, a comprehensive statement was made by my right hon. Friend the Minister for Agriculture, Fisheries and Food. We are very conscious of the genuine difficulties that will be faced by dairy farmers in the United Kingdom. However, I think that most thoughtful dairy farmers will appreciate that it was not possible for the Community to continue in the way that had been experienced over the past few years, particularly with regard to the over-production of milk.

Before deciding how to spend the money, does the Minister agree that we have to get the rebate? Does he recall that his right hon. and learned Friend the Foreign Secretary has repeatedly assured the House that, if the money is not paid, the Government will safeguard British interests? Since it is now 25 April and the money has not yet been paid, will the Minister tell the House and the public exactly what is being done to safeguard British interests with regard to this rebate? If, as I suspect, nothing is being done, when will he be able to tell the House what is going to be done? Surely the British electorate will not be allowed to go to the polls on 14 June without knowing what decisive action the Government are to take on this important matter'?

The hon. Gentleman is well aware that the prime objective of Her Majesty's Government is the successful completion of the post-Stuttgart negotiations. With regard to any measures that may be taken to try to facilitate the payment of the funds to which the hon. Gentleman has referred, any action that may be contemplated will take into account the effect that that will have on these negotiations. The success of the negotiations remains our main objective.

Are these projects in Scotland, Northern Ireland and the other regions of the United Kingdom being held back until the rebate is released by the Community to the United Kingdom?

I am not certain of the detailed effects that the delay will have. I suggest that the right hon. Gentleman addresses these questions to the relevant Ministers concerned with energy, employment and transport matters. We certainly hope that there will be no delay, but I cannot give the right hon. Gentleman an absolute guarantee to that effect.

asked the Secretary of State for Foreign and Commonwealth Affairs what new initiatives he is taking within the Community to ensure the resolution of matters relating to the financing of the Community discussed at the Foreign Affairs Council on 27 March.

We are continuing, in discussions within the Community, to build on the progress made at the March European Council to resolve the remaining differences and to reach a settlement that we can commend to the House.

The Minister has already made it clear that the negotiations will continue. For how long will they continue, and when will Britain get the money that is due to it? If we are not to receive that money, will the Minister now answer the question of my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) about what action he will take to ensure that the money is paid?

The hon. Gentleman will be aware that many of the issues that were on the agenda for the Stuttgart negotiations have already been substantively and satisfactorily concluded. The only significant outstanding issue is that of British budget contributions. The gap between the United Kingdom and other member states is relatively narrow, but the matters still to be resolved are important. We have made it clear that the matter must be seen as a package. There can be no agreement on or consideration of own resources or other parts of the package until the outstanding issues have been resolved.

As Britain now has a manufacturing trade deficit of £20 million a day with the Common Market, as our contributions are now more than £2 million a day, and as we are just about to inflict grave damage on British agriculture because of the enormous problems of the continental CAP, have the Government turned their mind entirely against the possibility of once again seeking an EFTA arrangement with the Common Market?

My hon. Friend will be aware that not only have imports from the Community increased during the past 10 years but that our exports to the Community have increased dramatically, which has had a beneficial effect on employment. The Government do not believe that an EFTA-type arrangement is appropriate. We are full members of the Community. We wish to see reforms in the Community and that is what the present negotiations are all about.

Does the Government's opposition to an increase in the resources of the Community include opposition to the latest proposal by the Commission for a loan of £280 million from Britain to cover the excess expenditure on agriculture? Do the Government accept that it would be plain daft for Britain to lend fresh money to a body that has yet to pay the rebates due to us? Can the Minister assure the House that the Government will not pre-empt a decision of the House on own resources by agreeing to this loan, which must be repaid out of the increased own resources, before the House has had an opportunity to decide whether it accepts that increase in own resources?

We have not yet received a formal request from the Commission for a loan such as that to which the hon. Gentleman referred. My right hon. Friend the Minister for Agriculture, Fisheries and Food had entered into the minutes of the Agriculture Ministers' meeting a statement to the effect that if any overspend arose from that agricultural settlement, the United Kingdom expected the cost of the overspend to be met within the existing budgetary provisions of the Community for the current financial year.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will now make a statement on the likely levels of expenditure by the Community for 1983, 1984 and 1985, respectively.

The Community budgets for 1983 and 1984 provide for expenditure of about £14·7 billion in each year. The preliminary draft budget for 1985 will be published in June.

Further to the question of the hon. Member for Livingston (Mr. Cook), will my hon. Friend state categorically that we will not agree to any loan to the European Community this year, the effect of which would be to allow for an increase in agricultural expenditure, which Her Majesty's Government are against, and which would also be a device for securing that our rebate would not come back to us but would be swallowed up as a loan, or at least the bulk of it?

Our view remains that if budgetary problems arise later in this financial year steps should be taken to reduce expenditure.

In the opinion of the Government, have the problems of controlling agricultural expenditure in the Community now been satisfactorily resolved?

The agriculture decisions taken some weeks ago represent an important step forward in that, for the first time, the Community took decisions that will make a material contribution towards reducing surpluses and apply other methods of controlling the disagreeable aspects of the CAP. We would not suggest that, as a consequence, the CAP will be exactly as we would wish it, but we believe that for the first time decisions have been taken that will bring agricultural expenditure under control so that it will represent a decreasing share of Community expenditure. That has been a major British objective for many years.

Is my hon. Friend aware that, when the Government are rightly exercising strict control over most forms of public spending, the people of Britain find it very hard to understand on what grounds an increase in own resources of the EEC can be justified?

My hon. Friend will be aware that the United Kingdom Government and almost all Governments within the Community, including the French Socialist Government, seek to control public expenditure. We have emphasised that it would be wrong for the Community to expect different criteria to apply to its own expenditure from those set by national Governments.

Perhaps I can assist the Minister by clarifying the Government's attitude to the proposed loan. The request has not been formally received by the Government, but we all know of the Commission's decision last week. Are the Government saying to the House that when that application is formally received by the Government they will reject an application for fresh money from Britain?

We shall respond to a formal request from the Commission when that is received. The Government have already said that if there is overspend during the current financial year, that will have to be met by economies in existing budgetary provisions.

asked the Secretary of State for Foreign and Commonwealth Affairs what further proposals he intends to place before his European Community colleagues for the development of Community policies.

The European Council reached a large measure of agreement on new policies in March, reflecting the Government's priorities. We are pressing for the necessary follow-up action to be taken as soon as possible in the relevant specialist Councils.

Can my hon. Friend say what progress has been made towards the creation of a genuinely free market in goods and services within the Community, as outlined in the Government publication, "Britain and the European Community—A Positive Approach"?

My hon. Friend is right to draw attention to the fact that the organisation usually referred to as the Common Market has achieved such a description in terms of its agricultural policy rather than its internal markets. The Government have given high priority to achieving a more genuine internal market, especially in insurance and service industries. Encouraging progress has been made in the Stuttgart negotiations and we have achieved broad agreement on the need for a liberalisation of trade and services, notably in transport and insurance.

The Minister said that he was struggling through negotiations on internal budgetary discipline and a new formula. The Government have set out the grounds for an increase of own resources to 1·4 per cent. in 1986 leading to 1·8 per cent. in 1988. The deadline for the conclusion of negotiations for the entry of Spain and Portugal will be in August. As those policies are incumbent upon the increase in own resources, will the Minister say to what extent he has committed the country to such an increase to develop them?

I do not accept the preamble to the hon. Gentleman's question. The Government are not committed to an increase in own resources. Their attitude remains that outlined by the Prime Minister at the Dispatch Box.

On the question of the increase in own resources, does my hon. Friend agree that the British Government's negotiating stance is that own resources will be increased if our budgetary requests are acceded to? Would it not be helful in those negotiations, and to the House, if my hon. Friend spelt out the purposes for which the increases in own resources will be used?

We have said that we understand that certain arguments have been used to explain why an increase in own resources would be appropriate. They relate to the likely accession of Spain and Portugal to the Community, to some appropriate new policies and to possible increases in the regional and social funds. I must emphasise that an increase in own resources can be considered only if satisfactory agreement is reached on the British budget contribution and if there is proper control of agriculture and Community expenditure.

What progress have the Government made in the liberalisation of air transport within the European Community? Can the Minister say what prospect he sees for bringing down the unacceptably high level of air fares within the Community?

My right hon. Friend the Secretary of State for Transport has said that the liberalisation of air transport is an important objective of Government policy. He will bring forward proposals later this week, to be discussed at subsequent meetings of Community Ministers.

asked the Secretary of State for Foreign and Commonwealth Affairs if there are any new initiatives he will propose to resolve outstanding current problems between members of the European Community.

I refer my hon. Friend to the answer that I gave earlier to the hon. Member for Glasgow, Cathcart (Mr. Maxton).

Is it not true that the gap on the budget problem has narrowed considerably? As we are negotiating with countries that are friends and allies, not enemies, might not a further move be required on our part to ensure that we find a speedy and satisfactory conclusion to the problem?

I assure my hon. Friend that Her Majesty's Government have shown considerable flexibility on this matter. We remain of the view that flexibility is required by all parties involved. If the United Kingdom is to be expected to move on this matter, it must be even easier for the other nine member states also to move to reach a satisfactory solution.