asked the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Government of Israel that the Falashas should not be settled in a manner which would disrupt the progress towards Palestinian self-determination.

The settlement of the Falashas in Israel is a matter for the Israeli Government. Our firm commitment to the Palestinians' right to self-determination is well-known.

As those of us who have seen at first hand the inhumane way in which the Palestinians under Israel control are treated will not believe that the Falashas have been hijacked from their natural environment for humanitarian reasons, will my right hon. Friend reassure the House that Her Majesty's Government neither knew of nor assisted in the so-called Operation Moses? Will he make most firmly the point with the Israeli Government that we would not expect the Falashas to be used as front-line troops in the conflict on the West Bank?

rose—

Order. Before the Minister replies, I make a special appeal for shorter supplementary questions.

The Government welcome any efforts that are made to alleviate the sort of suffering that we have been seeing in Ethiopia in the past few weeks and months. We deeply deplore settlements in the occupied territories and regard them as illegal. We are disturbed by the settlements because we think that they are an obstacle to peace. However, that is a separate issue.

Having regard to the amazing and unique nature of this mercy operation, which I for one had the honour of seeing, would it not be right just once for the House as one to salute a tremendous enterprise of compassion that has been carried out by a nation with great difficulties?

As I have already said to the hon. and learned Gentleman, the Government welcome any measures that are taken to alleviate grave suffering in Ethiopia. I am glad that the British Government have played a prominent role to that end.

I think that the views of my hon. Friend the Member for Northampton, North (Mr. Marlow) are well known. However, will my right hon. Friend tell the House what steps the Government will take, either officially or unofficially to help save lives in Ethiopia, and especially to save the lives of Falashas and help to re-establish their link with Israel, which has offered them a home and a future?

The bringing of the Falashas to Israel is a question for the Israeli Government, and the events in Ethiopia form a separate question. I must reinforce the view that the British Government are taking a prominent lead with the provision both of RAF aircraft and of supplies of food and care.

Is the Minister right in saying that this is a matter of concern only for the Israeli Government? Surely there should have been some reference to the Ethiopian Government in this matter? Is it acceptable that even Israel, which seems to think that it can behave in this exclusive and selective fashion, can mount an operation in another country which leads to a mass exodus during which many thousands of people die? It has been an incomplete exercise, which has partly failed. It was mounted in the interests of one community, to the disregard of millions of others who are starving in the same circumstances.

That is specifically a question for the Israeli Government. People have a right freely to move across borders, and that is the Government's view. What matters in all this is that suffering in Ethiopia should be alleviated.

Is it not deplorable that my hon. Friend the Member for Northampton, North (Mr. Marlow) and the hon. Member for Warley, East (Mr. Faulds) have criticised Operation Moses without having made any reference to the thousands of black Jews who were starving to death and who are now safely housed in Israel?

I have noted my hon. Friend's views.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to central Africa, with particular reference to the future of Namibia.

I visited Zimbabwe, Zambia and Kenya between 5 and 12 January. In each country I had discussions with the Head of State or Government, the Foreign Minister and other Ministers. Our talks covered a wide range of international, regional and bilateral issues. In all three countries, I found deep concern over Namibia. We discussed how best to achieve our common goal of ensuring early implementation of Security Council resolution 435. During my visit I was able to see something of the contributions which British industry, our aid programme and the British Council are making to the development of the three countries' economies.

I thank the right hon. and learned Gentleman for that reply. Does he, with the whole of the free democratic world, deplore the continuous procastrination by the South African Government in denying Namibia the right to freedom? What steps is the right hon. and learned Gentleman taking with our allies in the United States to ensure that much speedier progress is made towards that end and to ensure that increased pressure is brought to bear on the South African Government to attain that end?

Namibia was a major topic of discussion in all those countries. Everyone agreed on the importance of early independence for Namibia on the basis of Security Council resolution 435. The main hope of achieving a settlement leading to that result lies in the current United States-led negotiations, which we support. I have urged other Governments in the region to support those negotiations. We shall continue to do everything that we can with our allies to encourage those negotiations to reach a conclusion and to move towards the implementation of Security Council resolution 435.

Does my right hon. and learned Friend agree that, although it is fashionable to put Namibia at the top of the list, the problems posed by the complete disintegration of Mozambique must rate highly with the problems involving the Republic of Zimbabwe, because without—

Order. The question is about Namibia.

Security Council resolution 435 was passed long ago, in September 1978. Does the Foreign Secretary now understand the frustration and impatience of other African countries at the long delays? Is the right hon. and learned Gentleman content with the fact that the Contact Group appears to be dormant and to rely entirely on the United States Crocker initiative, which may be construed as bypassing resolution 435? Will the right hon. and learned Gentleman state that there is no linkage between the Angolan-Cuban proposals and independence for Namibia?

I certainly need no reminding of the widely felt impression about the long time taken in implementing Security Council resolution 435. That resolution is endorsed internationally and universally as the basis of Namibian independence, and it needs to be fulfilled as soon as possible. We are in close touch with the other Foreign Ministers concerned with the Contact Group. I recently discussed this question with the Foreign Ministers of France, Germany and Canada. We are ready to do anything in this or any other context that will help to promote a settlement. One must recognise that the best possible prospect for settlement lies in the negotiations now led by the United States.

asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on arms control talks.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress at the various disarmament conferences taking place.

As my right hon. Friend the Prime Minister told the House on 9 January, we warmly welcome the agreement to resume US-Soviet negotiations. We fully share the objective of working out effective agreements aimed at preventing an arms race in space and terminating it on earth, and limiting and reducing nuclear arms and strengthening strategic stability.

As we approach the 40th anniversary pf VE day, will the Foreign Secretary acknowledge the heroic role played by the people of the Soviet Union and the Red Army in the allied defeat of Hitler and Fascism? Will he bear that in mind in the arms control talks and take seriously the new Russian determination to try to secure nuclear and general disarmament?

I certainly subscribe to the hon. Gentleman's first point. One of the matters very much in my mind during my visit to Moscow last summer was that the Soviet Union suffered massive casualties in the second world war and, with the rest of the alliance, played a notable part in securing victory.

Should not the United States research programme into space weapons be commended, if only because it raises the prospect, however remote, of an antidote to nuclear weapons being found? Does my right hon. and learned Friend agree that in any case that research programme has been principally responsible for bringing the Russians back to the negotiating table on the question of long and medium-range nuclear weapons?

The United States research programme is to be considered alongside the research into precisely the same kind of technology already undertaken by the Soviet Union. In so far as that research contributes to a strengthening of defence as part of the balance of armament, no doubt it is to be welcomed. The existence of that programme was no doubt one of the factors which the Soviet Union had in mind in agreeing to the resumption of the talks.

Does the right hon. and learned Gentleman agree that it would help to create the right atmosphere for the arms control talks if representatives of the Soviet Union and the United States were invited at the appropriate time this year to celebrate the 40th anniversary of victory over Fascism? Does he appreciate how concerned we were at the original answer given by one of his junior Ministers that VE day would not be celebrated? Will he try to exercise greater control over his Department in the future?

The Government's position on that is quite clear. Together with, I think, all the other Governments concerned, we recognise the case for commemorating the fact of 40 years' peace in Europe and doing so in a fashion that takes account of the interest in the future of peace and conciliation in Europe, not only of our allies in that conflict, but of all who participated in it.

Is my hon. and learned Friend aware that on 13 January Mr. Gromyko said in a television interview that he did not at all insist that Britain and France should eliminate their nuclear weapons? Will my right hon. and learned Friend find a tactful way of explaining to the Opposition the implications for unilateralism of that statement?

I entirely agree about the importance of that point. Mr. Gromyko's observation was in line with that made by Mr. Andropov, and recently quoted by a Soviet spokesman, that the concept of unilateral disarmament could not be contemplated by the Soviet Union because

"we are not naive people."

As the Foreign Secretary is now aligning himself more and more closely with Mr. Gromyko, and bearing in mind that the refusal of the British and French Governments to allow their missiles to be counted in the INF talks was one important reason for the failure of those talks, does the right hon. and learned Gentleman agree that in the statement to which the hon. Member for Buckingham (Mr. Walden) referred Mr. Gromyko insisted that British missiles should be counted in the forthcoming talks on strategic weapons, especially as the British Government regard them as strategic weapons and they are committed by treaty to NATO, and that if the British Government completed the Trident programme they would be capable of destroying 10 times more Soviet targets than would the present Polaris force?

The right hon. Gentleman will not be surprised to hear that I do not agree with that proposition. Our view on the position of the British nuclear force in arms negotiations is as stated by me in my speech to the United Nations two years ago, and is very closely in line with the statement made to the same assembly by President Mitterrand. If Soviet strategic arsenals and those of the United States were substantially reduced, and if there were no significant changes in Soviet defensive capabilities, Britain would review its position and consider how best to contribute to arms control in the light of the reduced threat.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of relations between the United Kingdom and Ethiopia.

We have normal diplomatic relations with Ethiopia. In recent months, ministerial visits have enabled our two countries to discuss our relations more deeply. We continue to provide those in need in Ethiopia with very considerable amounts of emergency food aid.

Will the aid that we are able to give to Ethiopia now be increased in order to meet the danger of the reported outbreak of cholera in that country? Secondly, is this nation, or any nation other than Israel, making any effort to settle or re-settle anyone who is suffering in, or is a refugee from, that sad land?

The United Kingdom has given about £30 million of aid over the past two years. That is a major contribution towards dealing with the real problems of Ethiopia.

Will my hon. Friend tell the House why he has declined to support the World Bank's special fund for Africa, which is designed to prevent a recurrence of the famine and starvation in Ethiopia and other sub-Saharan countries?

We have great sympathy with the initiative proposed by the World Bank, but any specific contribution that the United Kingdom made to it would be at the expense of other existing bilateral and international commitments. We must bear that in mind. I hope that the World Bank's initiative will continue to make progress as an important contribution to the problems.

Is the Minister aware that the cholera epidemic in Ethiopia is extremely serious and will almost certainly spill over into the Sudan? There is a great shortage of medical personnel and nursing staff—

Why does not the right hon. Gentleman go?

I would consider myself dangerous. I would not offer my services, even in that limited role.

I acknowledge the force of the right hon. Gentleman's point. There is no doubt of the seriousness of the difficulty. The United Kingdom has committed some £14 million to Ethiopia, and my right hon. Friend the Minister for Overseas Development will give careful thought to the best way in which that money can be used to make a contribution, both bilaterally and in co-operation with other interested parties.

The whole House warmly welcomes the extension of the United Kingdom's Hercules airlift to Ethiopia. However, is my hon. Friend aware that that airlift will be as nothing without long-term, preferably bilateral, aid to back it up and to assist in the development of agriculture in Africa so that the problem of hunger can be tackled?

I appreciate my hon. Friend's point, but the present priority is to deal with the immediate problems of hunger and starvation in Ethiopia. In the case of longterm developmental aid, the needs of Ethiopia, which are certainly significant, must be balanced against the interests of the various other countries in Africa, who also have serious needs, and with which we have close bilateral relations.

In view of the disappointment expressed publicly by the Secretary-General of the United Nations about the fact that warnings of famine in Ethiopia which were uttered well over one year ago appear to have been ignored, should not the British Government, in the light of the close relationship that the Minister has mentioned, be encouraging Ethiopia to take the United Nations more seriously? Should not the Government be setting an example themselves?

The United Kingdom did not ignore the warnings. Although we did not have a formal bilateral aid programme with Ethiopia, in the two years before the famine the United Kingdom gave food aid worth more than £15 million. I agree that Ethiopia should take the United Nations as an important international agency, as should all countries.

Did my hon. Friend's reply to my hon. Friend the Member for Banbury (Mr. Baldry), in which he mentioned the Royal Air Force contribution, mean that the Hercules aircraft will be kept there for as long as is necessary?

My right hon. Friend the Minister for Overseas Development recently announced an extension of the Hercules airlift until March. The matter will then be reviewed to see what will be appropriate.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will assess the implications for the United Kingdom's relations with the countries concerned of the current Latin American debt crisis.

The Latin American debt crisis has of course led to an intensified dialogue between ourselves and the debtor countries of the area. As my right hon. Friend the Chancellor of the Exchequer told the House on 25 October 1984, the British Government have played a leading role in promoting co-operation between Governments, international institutions and banks to tackle the problem of international debt.

What will be the Government's response when the rescheduling of the Nicaraguan debt is considered later this year? Will they merely follow their usual role as puppets of President Reagan, or will they be generous and take on board the overriding regional development problems of the area, as our EEC partners are doing? Does the Minister agree that we should be looking for other ways in which to finance development in countries such as Nicaragua, especially through direct investment in the natural resources of such countries, to overcome their long-term problems?

The Government are playing a constructive part in considering and helping to restructure the international debt problems of Latin American countries. We are aware of Nicaragua's economic difficulties. We hope that its Government will agree to follow International Monetary Fund advice on policies to tackle those difficulties. We understand that the World Bank is discussing with the Nicaraguans the resumption of regular payments of outstanding debts to the World Bank.

With the return of an elected President to Brazil, will the Government use their best endeavours, with other creditor nations, to ensure that Brazil is not submitted to stresses that are incompatible with a full return to democratic Government throughout that enormous country?

We strongly welcome the election of the first democratically elected President of Brazil for 21 years. My right hon. Friend the Prime Minister has sent a message to Dr. Neves congratulating him. As my hon. Friend said, it is significant that Brazil is making important steps towards tackling her overseas debt problems. It is a matter of great pleasure that my right hon. Friend the Minister for Trade was able to announce in December that, for Brazil, there is now a resumption of medium-term export credit cover from Britain. I shall bear in mind the other points that my hon. Friend has made.

Now that the Government and British banks have contributed to the agreement on Argentine debt, which was reached a few weeks ago, is it now established policy of the Government to lend Argentina money which might be spent on rebuilding the Argentine armed forces with weapons supplied in part by British firms?

I am glad that the right hon. Gentleman expresses support for the action taken by the Paris club recently in agreeing to multilateral settlement of Argentina's debts. We look forward to playing our part in establishing what can be done on bilateral debt arrangements between Argentina and Britain.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will give an updated report on action to control the total running costs of his Department.

asked the Secretary of State for Foreign and Commonwealth Affairs what further developments there have been regarding the planned level of activity in the forthcoming financial year of the Diplomatic Service, the British Broadcasting Corporation External Services and the British Council respectively.

I gave details on 14 November of measures which are being taken or planned to control running costs in the Foreign and Commonwealth Office. I have since announced a list of 10 diplomatic and consular posts which will close or not reopen. The Overseas Development Administration has carried forward its plans to consider putting out to competitive tender a number of in-house services.

Will my right hon. and learned Friend say how the recent decline in the pound-dollar value will affect future resources? Yesterday's White Paper showed strict control on future spending in sterling terms.

As I made clear in my answer to the Select Committee on Foreign Affairs in October, rises in expenditure resulting from exchange rate movements and differential inflation will be considered as requirements based on changed economic assumptions. In fixing the longer-term programmes of the Department in the public financial survey, account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. Obviously, much will depend on movements in exchange rates and overseas inflation. If there are major adverse movements, they can be reviewed during the next public expenditure survey.

Is my right hon. and learned Friend satisfied that his Department and its various parts can plan satisfactorily on that rather vague statement about the extent to which rises in costs incurred overseas may or may not be taken into account? Surely something much more precise is required. Do we not need a definite statement that his Department will compensate for any overseas risen costs, whether resulting from a fall in sterling or from excessive inflation overseas?

I understand the importance of my right hon. Friend's point. The sentence that I quoted from the statement in Cmnd. 9367 states that in fixing the longer-term programmes of the Department account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. I understand the importance that my right hon. Friend attaches to that. It must always be subject to consideration, together with other questions, in the public expenditure survey.

Is the Foreign Secretary aware of the valuable work that the British Council does, especially in relation to Ethiopia? Is he further aware that it has projects in hand at the moment, which are of vital importance to Ethiopia, which use English as a secondary teaching language? Will he assure the House that any projected cuts in his Department will not interfere with that aspect of the British Council's work?

I recognise the importance of the work done by the British Council. In the year ahead there is no cut in grant in aid to the British Council. It is being increased by £5·8 million in 1985–86 to meet overseas risen costs, leaving the council to absorb £1·1 million of overseas risen costs. The council is still considering how to absorb that amount. I share the hon. Gentleman's hope that that can be done in ways that do not damage the excellent work done by the British Council.

Does my right hon. and learned Friend accept that some hon. Members believe that cuts of this type in his Department are shortsighted folly in terms of Britain's interests? Will he assure the House that the cuts that are being made have not affected our efficiency and ability to represent Britain's case abroad?

I certainly understand and welcome the support given by my hon. Friend for the work done by my Department. It is inevitable that the reductions, which involved the closure of 10 diplomatic and consular posts, represent a reduction in the coverage of the services offered by the Department. A reason for proceeding in that way is to maintain the standard of the work being done by the Department elsewhere.

In the light of evidence given to the Committee on Public Accounts, could not savings be made if, instead of paying the school fees of the children of Foreign Office officials in Britain's public schools, the Foreign Office sent those children to comprehensive schools in the state sector, whether voluntary-aided or not, which have boarding facilities? If the Secretary of State is determined to save money, should he not consider this matter objectively? Real savings could be made and boarding facilities could be retained for the use of the children of Foreign Office officials.

I am sorry that the hon. Gentleman's vision of such matters is so limited by his narrow class perceptions. He must acknowledge that the people employed in the Diplomatic Service have for many years, as a result of consecutive recommendations by external and internal Committees to successive Governments, had their salaries supplemented in precisely that way, just as occurs with many private sector employees. If one must serve in a remote station for a long time, and is likely to do so regularly, there is no substitute for a boarding school education for one's children. It would be wrong to make the narrow changes envisaged by the hon. Gentleman for the narrow, bitter, class reasons that he advances.

asked the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the likelihood of negotiations taking place in 1985 on the subject of the Arab-Israeli dispute.

We remain deeply concerned about the Arab-Israel dispute as an important and dangerous threat to peace in an area of great importance to Europe. We have noted statements in favour of negotiations from Israel and the Arab side. Progress depends on the parties themselves. With our partners in the European Community, and, on the basis of our balanced approach, we shall continue to urge the parties to move forward towards negotiations. The United States' role continues to be of central importance.

I thank my hon. Friend for that reply. Does he agree that the recent proposals by King Hussein, supported by the Egyptian Government and the PLO, are the most fair and realistic proposals that have come forward for a long time? Do the Government support them? Will he confirm that it is not Government policy to lend support or credence to a policy of countries invading and occupying neighbouring countries because they do not agree with their politics?

We watch with great interest the development of some proposals and the efforts being made by King Hussein, in consultation principally with Egypt and other Arab countries, and with some Palestinian leaders, with a view to putting forward some proposals, which have not been fully evolved, to provide a basis for discussion. King Hussein is keeping us fully informed.

Will the Minister pay careful attention to the fact that there are signs of conciliatory approaches in the Arab world, and to the fact that a Labour Prime Minister in Israel was associated with the pull-out from Lebanon, which provide a unique opportunity for an initiative to be taken in that troubled part of the world? Will he ensure that the United States is not diverted by something else in the meantime from the urgent task of making that initiative a front part of its policy?

We have noted with interest the desire of the Israeli Government to negotiate; Israel's Prime Minister has already said that in public. President Reagan made it clear in his address to the United Nations Assembly that his proposals of 1982 remain firmly on the table as a basis for discussion. My right hon. Friend the Prime Minister has already had discussions with the President about the middle east and other important matters, and will do so again soon. We have a close interest in those matters.

asked the Secretary of State for Foreign and Commonwealth Affairs whether he has received an invitation to attend the inauguration of the next President of Brazil.

As far as I am aware, the Government of Brazil have not yet issued any such invitations.

In view of the recently established link between the aircraft builders Shorts of Belfast and Embraer of Brazil, will the Government let the new Brazilian Government know that the United Kingdom will encourage such economic co-operation between our countries?

I appreciate the hon. Gentleman's interest in the matter. The position as regards the new trainer is as follows. My right hon. Friend the Secretary of State for Defence has invited Shorts and British Aerospace to submit best and final offers by 24 January. I understand that Hunting and Westland also intend to submit revised tenders by then. In addition, the option of refurbishing the Jet Provost has been kept open. Every relevant consideration, including foreign policy factors where appropriate, will be carefully assessed before a final decision is made.

asked the Secretary of State for Foreign and Commonwealth Affairs what is the latest position regarding possible United Kingdom logistical support for a strengthened United Nations force in Lebanon.

I was able to discuss the situation earlier today with the United Nations Secretary General. Her Majesty's Government have emphasised to all the parties the need for agreed and effective security arrangements in areas to be vacated by Israeli forces. A United Nations presence could play a valuable part in these arrangements. It is important that all the Governments concerned, not least the Lebanese, should now make practical proposals to that end.

Does my right hon. and learned Friend welcome the Israeli withdrawal, which is beginning, and will he ensure that some early steps are taken to fill the vacuum, otherwise there may be serious inter-communal massacres?

That was the point of my answer. We welcome the fact that the withdrawal is to commence and we look for early, complete and orderly Israeli withdrawal. If that withdrawal is to be orderly, it requires co-operation with the Lebanon and with other countries, and full consideration of the effects of that on the stability of the area and the safety of civilians. That is why I have emphasised the importance of all the Governments concerned making practical proposals for possible United Nations presence in this area.

I welcome the Foreign Secretary's statement that he has discussed this matter with Mr. Perez de Cuellar and agree with the sentiments that he has expressed. The Opposition would welcome a British contribution to a United Nations force if this were required, and if conditions laid down by the Foreign Secretary were met, we would be satisfied. Does the Foreign Secretary agree, in the light of our experience of the ill-fated international force in Beirut, that before agreeing to put British troops into such a force it is vital that there should be the most precise definition of its role, and clear and strict arrangements governing consultation among components in the force about the possible use of weapons by the force?

I am grateful to the right hon. Gentleman for his acceptance of our view that the United Nations presence could have an important part to play in this area. He will appreciate that there are already substantial United Nations forces there, in UNIFIL or the United Nations Truce Supervision Organisation, and in other sectors as well. It is important that the conditions in which there are invited to play a part should be clearly defined along the lines that the right hon. Gentleman described. This is why I stress the need for early proposals, particularly from the Lebanese Government, to that end. Any question of an increase in the size of the United Nations force might arise hereafter. A British troop contribution has not been requested. We take the view that we are well placed, and remain better placed, to help on the logistical side of such an organisation.

asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to discuss the increase in own resources at the Foreign Affairs Council.

This issue is on the agenda of the Foreign Affairs Council of 28 and 29 January.

Does the Foreign Secretary agree that the only people pushing the British Government to expand the VAT base are the Commission and the other member states? Is it not unacceptable to the British people to be contemplating putting VAT on books, newspapers, children's clothes and other things such as food? Will the right hon. and learned Gentleman make it clear that the House will not put up with such a proposal?

The hon. Gentleman has misunderstood the position. The scope and coverage of VAT in this country does not relate to the proposal, which has been accepted, for an increase in resources by raising the maximum VAT rate. They are quite separate and distinct from each other. Under the adjustments agreed at Fontainebleau, which include the acceptance of a possible increase in own resources, our adjusted net contribution will be about half what it would have been without that agreement, and our effective VAT rate in the Community will remain below the 1 per cent.

Does my right hon. and learned Friend share my hope that any increase in own resources will be subject to the same critical scrutiny as the Government quite properly apply to all sectors of public expenditure? Will he undertake not to recommend the House to accept any such increase in own resources unless it can be shown that it is in the interests of Britain?

The question of an increase in own resources has at all times been stated to be conditional upon other conditions being fulfilled. That remains the position. It is on that basis that it will eventually be brought before the House.

Can the Foreign Secretary tell the House how much of the increase in own resources is attributable to enlargement, how much is attributable to paying the United Kingdom abatement and how much is attributable to new expenditure? Can the Foreign Secretary also tell the House what will happen to the United Kingdom abatement if there is a delay in enlargement and a delay in the agreement to increase own resources?

There is no recent estimate of the extent of the increase that is likely to be necessary as a result of enlargement. Earlier Commission estimates suggested that at the end of the transitional period enlargement would cost annually between 0·1 and 0·2 per cent. of the present VAT ceiling. The increase in own resources is connected with enlargement. That is why the Fontainebleau agreement provides for 1 January 1986 as the completion date for the enlargement negotiations. The agreement also provides for the abatement of the United Kingdom's contribution for 1985 to be met on the revenue side during that year.

Will my right hon. and learned Friend explain why the public expenditure White Paper published yesterday anticipates that a further supplementary payment of £200 million will be required to be paid to the EEC in 1985?

There are a number of reasons for variations between the figures set out in the public expenditure White Papers for this year and last year. I should not like to hazard an answer to the question posed by my hon. Friend on the premise that his question might be accurately founded.

I understand that the scope of VAT in the United Kingdom is partly, at least, the responsibility of the Chancellor of the Exchequer and partly that of the European Economic Community, does the Foreign Secretary agree that the actual rate of VAT "take" that we now send to the EEC is in the region of 10 or 11 per cent.? Will not that go up with the increase in own resources, and does it not increase if sterling declines relative to the ecu?

It is right that the increase in the own resource ceiling, while not affecting the VAT rate payable by way of tax in this country, is bound to have an effect on the sum being transferred, gross, from this country to the EEC. That was the importance of securing in the course of the Fontainebleau negotiations the machinery that we achieved for the very substantial abatement of our own contribution, thus achieving the significant reduction in our net contribution that I have described.

asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress on the accession of Spain and Portugal to the European Economic Community.

The Community and the applicant states are now in the final stages of the accession negotiations, after the agreement on Community negotiating positions on fisheries and wine. Agreement was also reached in December on arrangements for the dismantling of Spain's highly protective industrial tariff regime. We are working for completion of the negotiations as soon as possible so that Spain and Portugal may accede on 1 January 1986.

Is the Minister aware of the views of the new President of the Foreign Affairs Council, who indicated that he hoped for the early accession of Spain and Portugal in order to increase the own resources element as soon as possible and also to aid the Community's problems during the coming year? How realistic does the Minister think these views are, and what prospect is there of achieving that aim?

As I said, there has been considerable progress in the past few weeks and it is still perfectly possible to keep to the political commitment to allow the negotiations to be concluded at a time that will enable the ratification procedures by each of the member states to be concluded, thereby permitting Spain and Portugal to enter the Community on the date proposed.

My hon. Friend made no mention of the problems of the Spanish fishing fleet,. In view of the size of that fleet that seems to be a major obstacle that has still to be overcome. Will he say a word about that?

My hon. Friend is correct. That is one of the remaining outstanding issues. The Community has adopted a position that is in accordance with the enormous importance that we attach to the fisheries question. It will prove a complicated question, but the Spanish Government are realistic enough to realise that the Community, having acquired a common fisheries policy only after many years of difficult negotiation, would not be able to consider any significant change to it that weakened the protection that is afforded to existing fishermen within the Community.

asked the Secretary of State for Foreign and Commonwealth Affairs if the Council of Foreign Ministers has approved the European Economic Community budget for 1985; and what proportion of the budget is to be spent on agriculture.

The draft European Community budget for 1985 was rejected by the European Parliament on 13 December. The exact proportion of the budget to be spent on agriculture is not, therefore, established.

Will the hon. Gentleman accept that in the draft budget, although rejected by the European Assembly, the proportion to be spent on agriculture rose last year from 67 to 74 per cent., and that there has been a decline in real terms on the other programmes of major interest to Britain? What is there in the new mechanism of budget discipline that will prevent agriculture getting a larger and larger share of the Community budget in future?

The figure in the draft budget is 73 per cent., which is unacceptably high, although it is considerably lower than the average figure during the previous Labour Government, which I think was 76 per cent. With regard to the implications, I refer the lion. Gentleman to the agreement that has been reached, which binds the members of the Council of Ministers to ensure that any increase in agricultural expenditure is less than the growth in own resources. That is not a growth of 40 per cent., as the hon. Gentleman incorrectly suggested in the debate in the House yesterday.

Is there likely to be a supplementary budget for 1985? If so, as the United Kingdom is the country that is most concerned and which works hardest for financial discipline, will he undertake to the House that we shall not be required to make a net contribution, as we did yesterday?

As my hon. Friend is well aware, the draft budget that was sent to the European Parliament did not reflect the likely commitments of the Community during the year in question, but did reflect the legal limit of the 1 per cent. ceiling. The precise way in which that particular problem is to be resolved has still to be agreed, but, as my hon. Friend the Economic Secretary said yesterday, we cannot rule out the possibility, or indeed the likelihood, of some form of supplementary finance being necessary.

What steps is the hon. Gentleman taking to protect British interests in relation to the accession of Spain and Portugal in connection with that matter? The British situation will worsen, as Spain and Portugal are likely to be net beneficiaries from the Common Market.

Certainly the whole reason why the negotiations with Spain and Portugal have lasted so long is that the Community as a whole, including the United Kingdom, has been determined to be cautious to ensure that the financial implications of enlargement are kept to a minimum. One of the United Kingdom's main objectives is to ensure that mistakes that were made in the past with regard to northern agriculture, which produced unacceptable surpluses, should not be made with regard to Mediterranean agriculture. That is a particular priority.

Now that the system of financial control and husbandry in the Community is largely resolved, is it not rather sad and pathetic that some hon. Members should continue to grumble about the possibility of the United Kingdom paying an extra amount this year into the budget which would represent 0·7 per cent. of our GNP compared with the United Kingdom's existing budget deficit, which represents 2·25 per cent. of GNP?

My hon. Friend is right to put the matter in its proper perspective, but we must also insist that any increase in the resources of the Community is used for desirable areas of extra expenditure and does not contribute to the continuation of undesirable and unnecessary surpluses.

Is there not something bizarre and indefensible about a draft budget that will increase the proportion to be spent on agriculture from 67 to 73·7 per cent., which is closer to 74 than 73 per cent., at a time when over 14 million European Community citizens are out of work, and more than 25 per cent. of all young people in the Community are out of work, especially when that will be at the cost of programmes in industry, energy, transport, science and technology, which could make the best contribution to increasing the industrial viability of the European Community countries?

I entirely agree with the hon. Gentleman that the proportion of the budget represented by agriculture is unacceptably high. It is precisely for that reason that the United Kingdom has successfully insisted on a new formula that will ensure that agriculture will progressively represent a smaller and smaller share of the total Community budget.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining his aims for the achievement of reforms in the European Economic Community in 1985.

Our aims were set out in our paper "Europe—The Future", copies of which are available in the Library of the House, and in the Queen's Speech of November last year.

Will my right hon. and learned Friend make it clear that in 1985 the Government will provide no official co-operation whatsoever to the bands of so-called European Members of Parliament who descend on this country to investigate matters of purely domestic interest, such as the conduct of the police during the miners' strike? Will he deny access to such groups?

The question of such groups having access to this country does not arise, as I understand it, because the bureau of the European Parliament, the Standing Committee, decided that the Committee could meet only in Strasbourg, Brussels or Luxembourg—its working places. Certainly I can give my hon. Friend the assurance that we will not co-operate with inquiries on subjects outside the European Parliament's responsibility. That includes policing matters. It is deplorable that the Labour party allowed this matter to be dragged on to the Floor at Strasbourg, with very scant respect for the authority of this House.

Does the Foreign Secretary agree that it is now a major British interest to establish a genuine internal market, particularly in insurance and financial services? This becomes ever more important with the enlargement of the Community to 12. Does he further agree that that will be achieved only by more extensive use of majority voting and that Britain should not block but should encourage this?

I certainly agree with the right hon. Gentleman about the great importance for employment prospects throughout the Community of swift and comprehensive progress in establishing an effective internal common market in insurance and many other services. I do not believe that it is necessary to contemplate any change in the existing treaty provisions, provided that they are used effectively to achieve substantial advances towards a proper internal market.

asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress made in implementing the decisions of the Dublin summit.

The decisions reached at Dublin helped set in place for the first time a mechanism to control Community spending. As a result of the discussions on enlargement, the negotiations with Spain and Portugal are now entering their final stages.

In view of the overwhelming good will and compassion of the ordinary people of this country and throughout Europe to those who are starving in the Sahel region of north Africa, can the Foreign Secretary tell the House why progress has been so slow in implementing the decision taken in Dublin to provide 1·2 million tonnes of grain to that region, especially in the light of the 139 per cent. increase in grain stocks in Europe?

The substantial food aid commitments that were made by the Community in November are being delivered now. The commitments made in Dublin enabled the Community and the recipient countries to plan famine relief throughout the year ahead.

Will my right hon. and learned Friend confirm that he will not ask the House to approve any increase in EC resources until the conclusion of the enlargement negotiations? If enlargement is not to be recommended to the House because the negotiations have not succeeded, will he confirm that he will not ask for an increase in EC resources?

Plainly, there is a close link between the conclusion of the enlargement negotiations and the time at which an application for an increase in own resources will be brought before the House.

Since summits over the last few years have persistently committed themselves to reducing the amount of money granted for the support and subsidy of agriculture, and since in that period no reduction in such expenditure has occurred, when can the House expect to be informed that there has been such a reduction?

The hon. Gentleman is one among many who believe that it is possible easily to reconcile the case, supported in all parts of the House, for support for our agriculture industry with a proper management of the resources devoted to that purpose. As a result of the decisions reached at Fontainebleau, an effective budgetary discipline has been put in place and a series of policy decisions have been taken either for the freezing or the reduction of prices, and for the installation of quotas. To give just one example, as a result of those decisions a substantial reduction in the output and, therefore, ultimately the cost, of milk is taking place. That policy will have to be sustained for a number of years.

asked the Secretary of State for Foreign and Commonwealth Affairs if he plans to press for an early meeting of European Economic Community Ministers with the newly appointed commissioner in Brussels to discuss ways and means of securing new institutional progress within the Community structure.

Discussion is already taking place in the Ad Hoc Committee on Institutions. The European Community Commission is represented on this committee by Mr. Ripa di Meana.

Is my hon. Friend aware that I meant commissioners in the plural? As there is a need to press ahead with developments in the Community, and as the new Commission is beginning to make plenty of new suggestions, cannot the European Parliament and Commission, working together with the Council, achieve a new form of progress that will stand in contrast with the conflicts that have existed between those institutions in the past?

The Ad Hoc Committee on Institutions was appointed by the Heads of Government to look at this issue. A commissioner was appointed to it to ensure that the Commission's views would be fully taken into account in any recommendations made by the committee.

rose—

Order. We started these EEC questions one minute late, so I shall call one more question.

asked the Secretary of State for Foreign and Commonwealth Affairs what effect he expects the text on budgetary discipline adopted at the Dublin summit will have on the spending priorities of the European Economic Community.

Your precision is admirable, Mr. Speaker.

Is it not a fact that the budgetary discipline document will do nothing to prevent agricultural expenditure from increasing as a proportion of the budget? Given the vast surplus in all farm products, is there any justification for such an increase?

The budgetary discipline provisions provide a framework within which the decisions about agricultural prices will have to be taken. As a result, the increase in the 1985 draft budget for CAP spending stands at 5 per cent., which is the lowest figure for several years. Under the Labour Government the average annual increase was 28 per cent. Thus, the measures are already having an effect.