HC Deb 09 July 1987 vol 119 cc502-4
Mr. McKelvey

asked the Chancellor of the Exchequer what is the current level of Britain's contribution to the European Economic Community.

Mr. Brooke

The latest projection of our net payments to Community institutions in 1987–88 is £870 million.

Mr. McKelvey

We are still a large net contributor. Is it not the case that in Fontainebleau in 1984 there was an agreement that, if there were an increased resources payment, there would be proper budgetary control? Has the Prime Minister herself not agreed that there has been a budgetary control failure? If so, why are we agreeing to a further 3.5 billion deficit in this respect? Will we have proper guarantees that there will be proper budgetary control in future?

Mr. Brooke

I am not entirely sure about the 3½ billion to which the hon. Gentleman referred, but the great achievement of the Fontainebleau agreement was to secure a permanent abatement for the United Kingdom. Unfortunately, that was beyond the power of the Labour party to achieve during its time in government.

Mr. Marlow

Does my hon. Friend agree that if the British taxpayer has any more largesse to dispense charity begins at home, and that that money would be far better spent on our own inner cities than on Ireland, Greece and the Mediterranean coast?

Mr. Brooke

I share with my hon. Friend a desire to restrain expenditure in the European Community.

Mr. Spearing

Whatever our net or gross contributions, is it not a fact that a good slice of those contributions is taken up by VAT? Whatever the Chancellor said, and whatever plans Lord Cockfield may or may not have, is it not a fact that the European Commission is now taking the British Government to court so that VAT rates on all building, fuels, some new services and water should be put up? Should not that fact be in the Government's calculations?

Mr. Brooke

It is certainly a fact that the Commission has taken the British Government to the European Court under infraction proceedings on zero rates on a number of different items. That is a legal case, which will be heard on 15 September. We will not know the judgment until the end of this year or the beginning of next, and the Government will then react to whatever the judgment is.

Mr. Higgins

Does my hon. Friend agree that it is a mistake to pay twice for the same thing? As the House was persuaded to go along with an increase in own resources for the Community on the ground that there was to be budgetry discipline, we should not give a further increase just to get that guaranteed.

Mr. Brooke

I repeat and endorse what I said earlier to my hon. Friend the Member for Northampton, North (Mr. Marlow), that it is very much the concern of the Government to restrain expenditure in the Community.

Mr. Hoyle

As we are net contributors, what is our trade deficit in manufactured goods with the EEC? Can the Minister confirm that our deficit with West Germany is the largest trade deficit that we have? What will be done about this albatross around our neck?

Mr. Brooke

These are supplementary questions to question 6 to the Treasury, not "Mastermind". The hon. Gentleman's supplementary does not fall within the terms of the original question.