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Points of Order

3.30 pm

Mr. Alex Salmond (Banff and Buchan): On a point of order, Madam Speaker. We are about to have what the Prime Minister has styled a confidence debate. If you in your wisdom select an amendment for that debate, presumably we shall have a confidence vote later this evening. If we go on to vote on Second Reading, there will be another confidence vote. In the later stages of the Bill--since the Prime Minister has said that he requires it in all its essentials--we might have yet more confidence votes.

I am anxious not to miss any of those confidence votes, and this is uncharted territory. Would it be in order to introduce a procedure whereby a member of the Government can come before the House to say formally each and every time that the suicide pact is in operation?

Madam Speaker: Our procedures have stood us in good stead so far, and we shall continue today's debate as we have always done on such matters. I shall put the Question on the amendment at the appropriate time, and then the main Question. After that, as someone very famous once said, "Tomorrow is another day".

Mr. Michael Connarty (Falkirk, East): On a point of order, Madam Speaker. I seek your guidance on motion No. 4 on the Order Paper, which refers to the Scottish Grand Committee, which will be meeting in Edinburgh on Monday 5 December at 10.30 am. I understand that the Committee will be debating the Children (Scotland) Bill, and that that will in fact be the Second Reading of the Bill, although there is no indication on the Order Paper that that is the case. If that is the case, the Committee will get four and a half hours to debate the Second Reading of a Bill for which we in Scotland have waited for five years. That seems inappropriate, because we would have six and a half hours for debate if Second Reading was debated on the Floor of the House. Four and a half hours is a totally inadequate time, and I would ask for a ruling that we should have more time to debate the Second Reading of such an important Bill.

Madam Speaker: The solution to the hon. Gentleman's question is that when the motion is put this evening, he and any of his colleagues will be allowed an opportunity to vote against it. They will therefore be able to seek the changes which the hon. Gentleman wishes to see.

Mr. Andrew Rowe (Mid-Kent): I seek your reassurance, Madam Speaker. I see that a coach belonging to you is in Westminster Hall. I should like you to reassure us that the rumour we have heard that those of us who should in any way contravene one of your rulings would be expected to drag you through the streets in that coach is totally unfounded.

Madam Speaker: The rumour is not totally unfounded, but that must be done by reindeer.

Mr. David Winnick (Walsall, North): On a point of order, Madam Speaker. I understood that, once elected to the House, hon. Members can vote according to their judgment, but obviously with guidance from their Whips. If, at the end of a debate, they decide to vote

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independently, however, they are free to do so. What worries me, hence my point of order to you, Madam Speaker, are the stories in the newspapers of intense pressure and even intimidation being placed on Conservative Members to vote in a certain way tonight. Their constituency associations have also been telephoned. Such practice seems to undermine hon. Members' independence to apply their conscience to how they vote. Do you agree, Madam Speaker, that should those Conservative Members vote under pressure and intimidation, that undermines the whole concept of parliamentary democracy?

Madam Speaker: The hon. Gentleman is probably verging on the question of privilege. If he is serious about that matter, as he appears to be, he should put his concern in writing to me and I shall certainly consider it.

Mr. D. N. Campbell-Savours (Workington): On a point of order, Madam Speaker. You will know that I have written a long letter to you on this very issue.

Madam Speaker: That is why the hon. Gentleman should not raise the matter with me at this stage.

Mr. Campbell-Savours: That letter refers to a conversation that took place between a Central Office official and the chairman of the Billericay Conservative association. When can we expect to have a ruling on privilege?

Madam Speaker: I have not yet had the opportunity to see the hon. Gentleman's letter, but I know that it has been received by my office. I shall deal with it at the earliest possible moment.

Mr. Andrew Miller (Ellesmere Port and Neston): On a point of order, Madam Speaker. I spent part of this morning at the Royal Courts of Justice listening to what the Press Association has described as "a landmark legal victory", which severely criticises the Home Office. One of the cases affected concerns Mr. Paul Malone, about whom I have spoken on many occasions and asked numerous questions. Have you, Madam Speaker, received any requests from Ministers to make a statement on that judgment? Can you further assist me by telling me how I can deal with that matter properly, given that the Home Secretary, with the support of the Prime Minister, refuses to meet me to discuss the case?

Madam Speaker: I have not heard that any Minister is seeking to make a statement today on that matter. I am sure that the hon. Gentleman knows how to use our procedures well by this stage, but he can table questions, seek Adjournment debates and use other procedural means to raise that issue.

Mr. Andrew Mackinlay (Thurrock): On a point of order, Madam Speaker. I hope that I shall not appear discourteous to you, because that is not intended, but I want to know what will happen to the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), the Under-Secretary of State for Scotland. According to press reports at the weekend, he has succeeded to a peerage. I understand that he issued a press statement this afternoon that he has disclaimed the peerage, if he has inherited it. Apparently it is not clear whether he has inherited that title because it is a matter for the Lord Lion court of Scotland. In a modern Parliament, we should have absolute clarity about who are and who are not Members

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of Parliament. I am told that there is no documentation available in this Palace to check whether the hon. Gentleman has renounced the title or succeeded to it. We need clarification on that. Can you confirm, Madam Speaker, that that matter will be reported in the Journal tomorrow?

Madam Speaker: The House should be aware that on the death of the Earl of Selkirk, which took place on Thursday, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) accepted advice to the effect that if he thought that he was the heir to the earldom, he should cease to sit and vote in the House until he had reached a decision on whether to disclaim the title. The hon. Member for Thurrock (Mr. Mackinlay) should not always follow newspaper reports. The House has been officially notified today that the hon. Member for Edinburgh, West has disclaimed the title under the provisions of the Peerage Act 1963. The hon. Gentleman is now therefore once more able to sit and vote in the House.

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Orders of the Day

European Communities (Finance) Bill

Order for Second Reading read .

Madam Speaker: I have selected the amendment standing in the name of the Leader of the Opposition. Because of the interest in this debate, I have had to limit speeches to 10 minutes between the hours of 6 pm and 8 pm. I ask other hon. Members who speak outside that time to be courteous to their colleagues by restricting the length of their speeches.

3.39 pm

The Chancellor of the Exchequer (Mr. Kenneth Clarke): I beg to move, That the Bill be now read a Second time.

The Bill will ratify the highly successful deal negotiated by my right hon. Friend the Prime Minister and my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), the then Chancellor of the Exchequer, at Edinburgh in 1992. The new financial decision that emerged from Edinburgh will add about £75 million a year to our net contributions to the European Union in the next financial year, and that sum will increase to about £250 million a year by 1999. That increase in the contribution is an increase in the price that we pay for the undoubted benefits of membership of the European Union. Our economic well-being is dependent in huge part on our membership of the single market. We pay for a seat at the table to enable us to influence the political and commercial character of that market. We use our membership of the European Union to increase our influence in the world and to give added clout to our worldwide foreign policy.

The Edinburgh deal paid a fair price for those benefits and it also achieved other things in the financial area. It took the United Kingdom down the league table of contributors to the European budget. As a result of the Edinburgh deal, not only Germany, which has always paid more than us, but the Netherlands, France, Sweden, Austria and--if it joins--Norway, will all in the future make a bigger net contribution per head to the Community than do we in the United Kingdom. The deal will also continue to reduce the proportion of the total budget devoted to the common agricultural policy as a result of the mechanism of so-called agricultural guidelines.

Mr. Tony Marlow (Northampton, North): Will my right hon. and learned Friend give way?

Mr. Clarke: I shall in a second.

The Edinburgh deal also preserved the British rebate. So far, that has been worth £16 billion to us, and that rebate has been preserved until the end of the century.

Mr. Marlow: When the right hon. Lady, the then Prime Minister, came back with the rebate on 27 June 1984, she said:

"this system can be changed only by a unanimous decision by all member Governments and ratified by their Parliaments. The benefits

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for the United Kingdom will continue unless and until we ourselves agree to change it."--[ Official Report , 27 June 1984; Vol. 62, c. 993.]

Was she right or was she talking nonsense?

Mr. Clarke: She was perfectly right. If my hon. Friend will restrain himself at this stage, the rebate was negotiated at Fontainebleau in 1984 and unanimity is required to change it but, as I shall explain in a moment, usually a large number of issues are on the table at Councils to revisit those financial deals; countries pursue a variety of objectives; and each country puts into issues the subjects that it wishes to reopen.

I can assure my hon. Friend that the subject of the British rebate is reopened by our partners at every possible opportunity and it was on the table at Edinburgh, but my right hon. Friend the Prime Minister stuck to his guns and insisted that the British rebate should remain part of the financial arrangements. As a result of the Edinburgh deal, it is now preserved at least until the end of the present century.

Before I discuss the Edinburgh deal in detail, we must first be sure about the present level of our contributions to the European Union. Last week, it was plain that there is still, in spite of the copious document that I produced, a certain lack of clarity. The contributions that we are paying this year are based on the framework that was agreed by the then Prime Minister, Margaret Thatcher, in 1988 at the Brussels summit, the last time that a financial framework was negotiated before 1992.

Margaret Thatcher had a tough time at Brussels in 1988, and it is worth remembering what the financial picture then was. The Commission and most of the other member states wanted the ceiling to go up to 1.4 per cent. of Community gross national product. Eventually, they revised their proposals downwards and she was asked to accept 1.3 per cent. of GNP as the ceiling. She still said, on behalf of the British Government, that that was too high. Jacques Delors then proposed 1.2 per cent. Chancellor Helmut Kohl was alarmed by the effect that that might have on German farmers. Chancellor Kohl wanted to go to 1.3 per cent., but Margaret Thatcher stuck to her guns and she settled at the Jacques Delors compromise of 1.2 per cent.

Five years later, at Edinburgh, when the matter had to be reopened, my right hon. Friend the Prime Minister was still, in the end, not taken anywhere near the figures that Chancellor Kohl and others had been demanding five years earlier. Not by the end of the century will we reach the figures that others were demanding of the British Government in 1988. The Edinburgh settlement will move our contribution to 1.21 per cent. in 1995-96, and to 1.27 per cent. by 1998-99.

What of today's figures, which result from the Margaret Thatcher settlement and the 1.2 per cent. of gross national product to which the Edinburgh deal will be added? What about the billions of pounds whose payment, and forecasts of which, now appear to cause some of my right hon. and hon. Friends such concern? Since 1988, there has been a history of very erratic figures. The highest net public sector contribution that we have made so far is the £2.4 billion paid in 1989-90; the lowest is the £943 million paid in 1991-92. There is a genuine reason for that: technical factors make the figures veer about unpredictably from year to year. The timing of our receipts and payments is unpredictable, and difficulties are involved in calculating the rebate.

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The legal basis of the payments is certain, settled by the financial framework, but the timing in any British financial year from April to April is notoriously difficult, given that the rest of Europe and the Union work on a calendar year. There has always been uncertainty: if right hon. and hon. Members look back, they will see that forecasting has been difficult under every Government of every complexion in every year of our membership of the Community and, subsequently, the Union. One thing we do know is that the figures tend to rise in cash terms over the years; that is the inevitable effect of inflation and the overall growth of our GNP, and that is why we have reached the £3 billion figure that has been debated in the past week.

As people continue to be alarmed by such figures, let me make it clear that there is nothing new about them. We have always known that our net contribution would eventually exceed £3 billion: we have always said that it would do so in the end as a result of the Margaret Thatcher Brussels summit deal, if it had never been altered.

Let us take the current year--the year over which there was so much fuss last week when I produced the figures a week earlier than I would normally produce the latest forecast so that we should be better informed today and, I hoped, engage in an intelligent discussion about the cost to the country of the European Union. The first forecast for 1994-95 was made in the Treasury's 1991 autumn statement, and amounted to £3.3 billion. I do not recall the slightest fuss being made at the time. In the 1992 autumn statement, the forecast amounted to £3.1 billion; again, no one raised a murmur. Last year, the autumn statement forecast had come down, because-- trying to predict our payments and receipts--we expected this to be a particularly low year: we made a forecast of £1.7 billion. Last week, I announced our latest forecast of £2.4 billion. Those forecasts show the difficulty of forecasting, which no one has ever claimed to be an exact science. They show either a rise of £700 million or a fall of £900 million over the past few years, according to taste. What matters about the figures--

Mr. William Cash (Stafford): Will my right hon. and learned Friend give way?

Mr. Clarke: I can think of no other hon. Member to whom I should make this point more clearly than my hon. Friend the Member for Stafford (Mr. Cash)--the man who has chosen not only to show the uncertainty of the figures, but to suggest that there is some untruthfulness or deceit behind them. He has rejected my allegations that he was talking alarmist nonsense, as indeed he was, a fortnight ago. Those figures have nothing whatever to do with the Edinburgh deal, or with the Bill.

Mr. Cash: Does my right hon. and learned Friend accept that, when he came to the House last week and produced the revised figures, he was obliged to do so? What I said was not rubbish, as he said on a radio programme the other day. I said that there had been a serious omission of enormous proportions from the letter that he sent round, and that that was unacceptable.

Mr. Clarke: I most definitely was not obliged to produce those figures last week. My hon. Friend was utterly amazed that I did so last week. He would have produced his figures and carried on making mischief with them if I had not produced my figures last week. Those

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figures would normally have been produced at the time of the Budget tomorrow. Had I produced them tomorrow, I predict that we should have had the same nonsense surrounding them as last week. As my hon. Friend knows, my letter set out accurately and clearly the financial consequences of the Edinburgh summit and the financial consequences of the Bill. That has been incontrovertible throughout. The forecast that I gave last week of this year's contribution, which has nothing to do with Edinburgh, is lower than some forecasts that we have given and higher than other forecasts that we have given. I think that the outturn will show this year to be a fairly normal year.

Mr. Gordon Brown (Dunfermline, East): Will the Chancellor of the Exchequer clear up this matter once and for all? Given what we know of the European Community--that it thought that the figure was higher than £1.7 billion since January--when did the Treasury first calculate that the figure would be higher than £1.7 billion? Was it last week or was it a few months ago?

Mr. Clarke: As far as I am aware, the European Union does not calculate in advance the net contribution from particular countries. It knows what the legal obligation is. For our public spending purposes, we produce forecasts of receipts and expenditure. We produce net contribution figures and we produce them annually. We are for ever altering the forecast. We produce the figures at the time of the Budget. As far as I am aware, no Chancellor of the Exchequer has produced the latest forecasts a week ahead of the Budget. I did so in order that the debate should be better informed. I thought that it was a useful exercise in open government, but not everyone is ready for open government in this country yet.

Mr. Nicholas Budgen (Wolverhampton, South-West): Does my right hon. and learned Friend agree that the issue is not really whether there are different assumptions and different ways of calculating, although there certainly are and all hon. Members can honourably and in a friendly way disagree about them? The difficulty is this. When the measure was first proposed, it was presented as being for £75 million. At a later stage, it appeared that the first year's contribution might be a lot larger. Some of my right hon. and hon. Friends say that, of course, it was first of all presented as being a little measure. Then, when it became necessary to bash it through with a quite unnecessary element of confidence added to it, and the country began to ask, "Why are you blackmailing your Back Benchers over £75 million?" it became necessary to say that the measure was for a larger sum.

Mr. Clarke: My hon. Friend and I have conducted this debate, or variants of it, with respect and in a friendly spirit for many years. He appreciates what the issue is, although I was not sure about that from his intervention. The reason why I produced the figures last week, ahead of when I had to, was to demonstrate the latest forecasts of the underlying pre-Edinburgh contribution. As he knows, there is a legitimate issue of what the consequences are of moving from a ceiling based on 1.20 per cent. of our GNP, in steady steps to 1.27 per cent. of our GNP by 1999. The figure that I first put forward--the figure in the letter that I sent to every Member of Parliament in an attempt to make the debate better informed than I feared

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it might otherwise be--remains accurate. The consequences of going from 1.20 per cent. to 1.21 per cent. are about £75 million next year--a sum on which Parliament must obviously vote and approve or not approve. Similarly, going to 1.27 per cent. by 1999 will have a £250 million consequence. That is the issue before us. To be fair to my hon. Friend, he has never traduced my efforts to make that clear. I should not seek to blackmail my hon. Friend, but I wish to persuade him of the merits of the deal--to which I shall return when I resume my speech--and that his conscience, lifelong commitment to the Conservative party, sense of proportion and of his country's duty of keeping its word when it enters into commitments with our partners in the European Union, should lead him to support the Bill tonight, with no question of having his arm twisted.

Mr. Gordon Brown: Will the Chancellor answer my question? Did he know of the Treasury forecast revising the contribution upwards from £1.7 billion when he wrote his letter to Members of Parliament?

Mr. Clarke: I honestly cannot remember. [ Laughter. ] My letter to Members of Parliament was based on the consequences of the Edinburgh summit. When one prepares a Budget, forecasts and tables flow through the Treasury, normally to be produced on the day of the Budget in the Red Book. I do not normally trail in advance tables that are to appear in the Red Book or any part of them. I prepared a letter about the Bill containing the figures that I gave a moment ago. Only when confusion arose about the figures and a date was set for this debate did I decide that one line of those figures--the forecast of our EU contributions--should be abstracted and given to the House. The hon. Member for Dunfermline, East (Mr. Brown) supports the Edinburgh deal, so he must find it difficult to know which issues to raise in this debate. He can only trawl about, joining some of my hon. Friends in trying to obscure the real issue behind the Bill. I fear that he is somewhat scraping the barrel.

Mr. John Wilkinson (Ruislip-Northwood): Is my right hon. and learned Friend telling the House that he cannot remember the advice of his Treasury officials when he took the most unusual step of writing a round-robin to 651 Members of Parliament in advance of this debate? That letter conveniently referred to the extra amount that would be paid over and above the sum predicted, rather than to the net contributions that our people will have to pay.

Mr. Clarke: I wrote about the Bill's financial consequences and the amount of money riding on this evening's vote. I did not write about the forecast contribution that would arise this year from the 1988 settlement long ago ratified by the House and now utterly beyond its control. I wrote about the issue before us tonight. The attempt to make a great issue about the forecast of this year's contribution, which is £900 million lower than that which we made two years ago but

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admittedly £700 million higher than the one that we made 12 months ago, is an attempt--with the greatest respect to my hon. Friend--to introduce a complete irrelevance.

Mrs. Teresa Gorman (Billericay) rose --

Sir Teddy Taylor (Southend, East) rose --

Mr. Clarke: I shall give way to both my hon. Friends, but as I am sure that they both want to speak, perhaps they will allow me to make a little progress first.

Around £75 million is therefore the correct figure for the effect of the Bill next year. The issue that we should address is why it was necessary, given that large underlying net contribution to which we were already committed, to agree to give anything more at the Edinburgh summit. That is a serious question.

Mr. Barry Porter (Wirral, South): Will my right hon. and learned Friend give way?

Mr. Clarke: No, because that would be unfair to my other hon. Friends.

Why was it necessary to add anything to the £2 billion to £3 billion, which I have just been talking about, and which flowed from the Brussels summit in 1988? The first thing to understand--it is rarely understood by anybody discussing European Councils of any kind--is that we were pursuing a package of aims at the extremely important Edinburgh Council. We had to help the Danes to obtain Maastricht opt-outs similar to our own to keep them in the Union as our decentralising and anti-federalist allies. We had to secure the completion of the single market as we wanted it to be. We had to turn subsidiarity into a more concrete form to get something to flow from it, and we had to secure agreement to enlargement so that Austria and the Scandinavians might join.

It was a very tough agenda, and it explains the context in which the decision was reached, which the House is being asked to endorse two years later. We had all those highly important political aims. The danger for my right hon. Friend the Prime Minister, as anyone who has been to any Council of Ministers will readily understand, was that he had to pursue those four political objectives. The danger was that the high spenders in the Union would demand in return too high a price in the new financial arrangements in exchange for our British objectives. The danger of not agreeing any of those things and not having a settlement at the Edinburgh Council would have been that it would all have passed on to the next presidency--it was out of our hands in the British presidency--which might have been less sympathetic.

At Edinburgh, my right hon. Friend succeeded in every one of the political objectives that I have set out: he secured the Danish opt-outs and the completion of the single market, subsidiarity was turned to concrete form, and there was the agreement to enlargement, which is now taking effect--and still at a modest cost, which kept the British abatement intact.

Why, after all that had been secured, was there an unavoidable need for any increase in the new financial arrangements? That is the only key question. Why, even when he pursued and got those four key British objectives, did my right hon. Friend the Prime Minister have to concede any more money? That, in my opinion, is about the only sensible question to have been raised in the debate in the past week.

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More money had to go into the structural and cohesion funds to provide the less-developed regions of the Union with the infrastructure and other investment that they required to accept the single market, and certainly to accept enlargement. There are hon. Members who welcome the objective 1 status that the highlands and islands, Liverpool and Merseyside, as well as Northern Ireland, now have. Principally, the money was needed by Spain, Greece and Portugal to accept what we wanted: that they would compete with German, British and French industry in open trading conditions.

In 1992 we also needed money to give European aid to countries in central and eastern Europe, for example, Poland, Hungary, Czechoslovakia and Russia. I still debate, in the Council of Finance Ministers, the aid that we give to those countries--countries in which we need to see liberal, democratic government and free market economies and whose stability is vital to European security. More money was inevitable because those were new developments. The question was how much. When one looks at that alongside the political achievements, it is my opinion that the Prime Minister returned to the House with a considerable triumph.

Mrs. Gorman: I thank my right hon. and learned Friend for giving way. Does not he agree that most people in this country are concerned about the money that we are already giving, which, as he just pointed out, amounts to 3 p in the pound on the basic rate of income tax? The constituents whom I represent do not worry too much about putting money into roads in Portugal or into massive irrigation schemes in Spain. They are at a loss to understand why our Government should give priority to the needs of our European partners while neglecting the increase that the taxpayer in this country will have to contribute, which is not a small sum, but which almost amounts to the equivalent that we are trying to raise on VAT?

Mr. Clarke: The case that I have tried to make so far is that we have, under the existing arrangements, been paying between £2 billion and £3 billion a year to bring the undoubted benefits of the single market and of the European Union to this country. Whatever views people have on Europe, very few have demanded that we leave the Union. That level of net contribution has prevailed for years and years, and has not been debated in the House because it has not been a serious issue since the 1988 settlement arose.

Another £75 million will be added to that amount next year and I have given two of the reasons why it needs to be added. That £75 million, for the reasons that I have just given, was a virtually unavoidable increase because there were commitments that had not been there before. That was a very, very good settlement given that the main things that people were concerned about at that Council were the opt-out for Denmark, the enlargement to Sweden, Finland, Austria and Norway, turning subsidiarity into something other than a phrase in the Maastricht treaty and the other benefits that I have just described my right hon. Friend the Prime Minister coming back with from the British summit.

Mr. Barry Porter: I largely accept my right hon. and learned Friend's argument. I represent myself, totally unelected, as somebody from the centrist tendency. We are not much bothered about the odd percentage here and there of gross national product. What we are bothered

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about, I think--and I am sure that my right hon. and learned Friend will come to this point--is that he should satisfy us that the Government have some policy under which something will be done about the fraud and corruption that have been brought to our attention, not for the first time this year, but in years before. Thereafter, let us get the woods from the trees. We can go forward with this matter perfectly happily, as other hon. Members on both sides of the House can.

Mr. Clarke: My hon. Friend the Member for Wirral, South (Mr. Porter), not for the first time, speaks for the voice of common sense. I certainly intend in due course to deal with the extremely important question of how we stop fraud and how we stop the misuse of this money. If I have time, I should like to go on to the far more important question of how we get better value for the money that we spend, which is an important issue highlighted by the Bill. I shall deal with those questions and try to explain why I believe that the present situation is not the same as the past. Very much more is being done, although I believe that we must ensure that more is achieved to get a grip on the issue.

Dr. Robert Spink (Castle Point) rose --

Mr. Clarke: I will not give way yet, if my hon. Friend will forgive me.

As the Bill is concerned with these figures and as we are voting on our increased contribution, I shall conclude my arguments about why I think that the Bill, in terms of the figures, represents a good bargain that the House should approve. I shall then turn to how we can be sure in future that we get much better value out of what we are already paying, as well as the addition that we are talking about this evening.

Sir Teddy Taylor: Before the end of this debate, shall we have an idea of when the Chancellor of the Exchequer first became aware that the estimate of £1,714 million was an underestimate of about £730 million? More importantly, on the accuracy of the £75 million, as the Chancellor has said, that depends on all the guidelines being met. Does not it worry him that, as my photocopy shows, the 1995 budget of the EC states clearly and precisely that in agricultural spending, the budget will be exceeded by £1 billion? That will be done by accountancy devices in exactly the same way as happened when, unfortunately, Lady Thatcher got agricultural guidelines and they were broken through by having a metric year. How can we stop such a thing, when the figures are written clearly and precisely?

Mr. Clarke: Throughout the public spending round, various estimates of expenditure are produced; quite a lot are negotiated. I assure my hon. Friend the Member for Southend, East (Sir T. Taylor) that European contributions remain a pretty uncertain feature throughout most of a public spending round until, eventually, the Treasury experts go nap on the best figure they can do for the coming year on the forecast then coming in. Those forecasts emerge in the Red Book at the time of the Budget, so at the time of writing the Budget, one becomes aware of them. I should not normally look at them in close detail until we were finalising the arithmetic in the last week or two.

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Those figures were not in my mind at the time of the letter; they had nothing to do with the letter. A complete red herring has been raised in seizing on the changed estimate--changed from when I produced it last year. Hon. Members know that the figures that I gave in my letter were precise, accurate and unchallengeable, yet some of them have chosen to go off on to another field.

Mr. Peter Shore (Bethnal Green and Stepney): Will the Chancellor of the Exchequer give way?

Mr. Clarke: I shall conclude my point and then I shall give way to the right hon. Gentleman.

I shall conclude the judgment of the deal at the Edinburgh summit. I have described the political background. This judgment is what, two years later, has given rise to this so-called "crisis debate". [Interruption.] Good heavens. Sudden noise reminds me that some members of the Labour party are here. I do not know why they have come to this debate as their participation in supporting the Edinburgh deal is somewhat difficult to understand. Let me-- [Interruption.] Let me just give some objective judgments of the deal at the Edinburgh summit. It was described in the following terms by my right hon. Friend the Member for Kingston upon Thames, the then Chancellor:

"I think it has been an outstandingly successful summit, I can't remember one that has been so successful for many years. I think this is very much due to the negotiating style, the quiet determined diplomacy of John Major, he absolutely excels in this sort of forum and he has delivered a very good deal for Britain on almost every issue."

[Hon. Members:-- "Hear, hear."] I do not say this to embarrass my right hon. Friend the Member for Kingston upon Thames. He has supported the deal throughout, but he keeps being prayed in aid by those who do not.

My right hon. Friend went on to say:

"The overall financing agreement is one that is affordable and is much more modest than the highly ambitious plans the Commission put forward which have been scaled back."

He even said:

"Everybody had to make some compromises, but at the end of the day, by making switches from one item of the Budget here to another item there we achieved a result which actually goes ahead for seven years on the future finances, it takes us right up to 1999. That's why it was very good news that we succeeded in preserving our rebate, because that is now guaranteed into the next century. Now that is excellent news."

That is what my right hon. Friend said and I agree with it-- [Interruption.] --and there were others.

My hon. Friend the Member for Stafford rose to ask a question during the statement after my right hon. Friend the Prime Minister had returned from the Edinburgh summit. At column 29 of Hansard on 14 December 1992, he asked about the Danish opt-out. At that time, my hon. Friend did not utter one word of complaint about the own resources deal. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) rose to his feet immediately after the Prime Minister had said that the Edinburgh summit had decided that it was not appropriate to increase expenditure by a substantial amount, even over the coming years. My right hon. Friend the Prime Minister had just reminded the House that

"At present, the United Kingdom's net contribution is about £2 billion a year. It would be £4 billion but for the rebate, which remains and-- lest there be any doubt--is extended to cover the fresh areas of expenditure that were agreed at Maastricht. In the case of the cohesion fund, for example, that means that we would pay only 5 per cent. of the total cost."

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My hon. Friend the Member for Wolverhampton South-West rose shortly after that. At column 32 of Hansard he did not demur from a word of that. He asked a question about the need for any future ratification of the treaty.

My hon. Friend the Member for Holland with Boston (Sir R. Body) intervened, as did my hon. Friend the Member for Reigate (Sir G. Gardiner). Neither raised the slightest murmur about the financial deal. My hon. Friend the Member for Tayside, North (Mr. Walker) intervened at column 39.

Mr. Bill Walker (Tayside, North) rose --

Hon. Members: Hooray!

Mr. Clarke: I shall give way to my hon. Friend, who had the courtesy to rise and to congratulate my right hon. Friend the Prime Minister on his negotiating skill.

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