HC Deb 24 January 1980 vol 977 cc630-2
7. Mr. Spearing

asked the Chancellor of the Exchequer what is the United Kingdom contribution to the calculated one-twelfth expenditure by the European Economic Community for January 1980.

Mr. Lawson

Pending clarification of the interpretation of the relevant legislation, member States have agreed that VAT contributions this month and next should be made on a provisional basis related to contributions to the 1979 Community budget, as amended by the third supplementary budget. Thus, we have paid—I hope that the hon. Gentleman will be pleased that I am able to give the figure to the nearest pound—£70,362,438 in respect of VAT contributions for January. In addition, we have contributed £105,268,401 this month in respect of full payment of levies and duties.

Mr. Spearing

Does not the Financial Secretary agree that, large though those sums are, they represent approximately half the quantifiable benefits received in return? Would not any attempt to retain a short-term net change in this imbalance, by accepting an EEC common oil policy—or Cop—spell long-term disastrous consequences for the finances of the United Kingdom?

Mr. Lawson

The Government are well aware of the problem of the grossly exorbitant size of the United Kingdom's net contribution to the Community budget. They are making strenuous efforts to achieve a substantial reduction, and have already achieved a great deal more than their predecessors ever did. There is no such thing as a common oil policy.

Mr. Denzil Davies

As the CAP is the major element in the European budget may I ask the Treasury to make it quite clear that there will be no price increase at this year's agricultural price-fixing meeting because any price increase will mean that we will have to pay more into the budget?

Mr. Lawson

The agricultural price negotiations are, of course, a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food. However, I should have thought that the right hon. Gentleman was well aware that we are foremost in pressing for price restraint in Community policies.

Mr. Stoddart

In the light of the figures the Financial Secretary has given, can the hon. Gentleman say exactly what the Government's policy is with regard to our net contribution? From the reported remarks which the Lord Privy Seal made in Paris, does it not seem that the Government are already giving way on the demand that we should pay nothing at all as anet contribution to the EEC?

Mr. Lawson

The hon. Gentleman will recall that what we have achieved so far is—[HON. MEMBERS: "Nothing."]—a wide measure of agreement. Our gross contributions to the European budget should be reduced by about £350 million as a result of taking all the wraps and conditions off the totally useless mechanism that was negotiated by the previous Administration. What we are now seeking is for as much as possible of the remainder of that gap to be made good on the receipt side of the budget, whether by a receipts mechanism or in some other way. There is some margin of manoeuvre. There must be in negotiations. But I can tell the hon. Gentleman that there is very little room for manoeuvre indeed.

Mr. Hill

Will my hon. Friend beware of the obvious pitfall of accepting promises with regard to the regional policy fund or, indeed, the social fund, which can be altered at a stroke, rather than actual cash benefits which all the British people can see?

Mr. Lawson

I can assure my hon. Friend that when we are offered a solution to this problem, as I am confident we shall be, we shall certainly examine the small print to make sure that the sort of things of which he is afraid do not occur.