EC Budget (Hansard, 9 July 1986)

Lord Campbell of Croy
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows: To ask Her Majesty's Government what are the effects for the United Kingdom of the ruling by the European Court of Justice that the 1986 budget of the European Economic Community is illegal.

§ The Secretary of State for Employment (Lord Young of Graffham)
My Lords, the European Court of Justice ruling that the 1986 EC Budget is illegal means that the budget authority must adopt a new, legal budget. As Presidency, we are trying to achieve agreement on such a budget as soon as possible. This strategy was approved by the ECOFIN Council on 7th July. Failure to secure early agreement would mean that the Community will have to operate on provisional twelfths. The Budget Council agreed on proposals for a legal budget for 1986 on 7th–8th July, and these are now being considered by the European Parliament.

Lord Campbell of Croy
My Lords, I am grateful to my noble friend for his reply. I congratulate the Council of Ministers upon their marathon in reaching a revision of the budget. Does the revised budget have to be agreed by the European Parliament? If so, is tomorrow the last practical day when this can be done? Does the revision also have to go back to the European Court?

§ Lord Young of Graffham
My Lords, my understanding is that we have until the end of July to achieve this agreement, and that it is a matter only for the European Parliament.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the ultimate co-operation between the European Parliament and the Council of Ministers is likely to produce only marginal effects with regard to the British taxpayers? Is the noble Lord aware that the original budget as put forward by the council, and as agreed therefore by Her Majesty's Ministers, contained a proposed expenditure of no less than £2,000 million on the storage of surplus commodities, their destruction, or their selling off at a fraction of their price? Will the noble Lord agree that this part of the budget not only is insane but, in the light of poverty in the world and the reduced aid to the developing countries, is positively obscene?

§ Lord Young of Graffham
My Lords, the noble Lord is entitled to his opinion on this. However, I think that it is rather wide of this Question. We are talking about the mechanism for agreeing a budget. Within the Twelve that budget has been agreed by the Council. It will, I hope, shortly be agreed by Parliament and I hope that we shall proceed in an orderly way to look at all items of expenditure within the Community including the CAP.

§ Lord Broxbourne
My Lords, my noble friend the Minister confirmed that Article 164 of the Treaty of Rome places a duty on the European Court of Justice to ensure the observance of law in the interpretation and application of the treaty. Are not the complex and comprehensive provisions of Title II of the treaty governing the budgetary arrangements and the relations between Commission, Council and Parliament a very necessary aspect of this jurisdiction?

§ Lord Young of Graffham
My Lords, I confess that I wish I had sufficient knowledge about the Treaty of Rome or about any of the documents so that I knew what Article 164 stood for, or indeed Title II. The general principles which the noble Lord enunciated sound sensible. I am sure they are ones that are followed.

§ Lord Hatch of Lusby
My Lords, has it been drawn to the attention of the noble Lord that in the revised budget an enormous amount of money—several hundreds of millions of pounds—is being added to its CAP section while £40 million is being cut from the proposed allocation of money to the developing world? Is this not a sordid commentary on the outlook of the Community in respect of its budgetary principles and its place in the real world?

§ Lord Young of Graffham
My Lords, I am grateful to the noble Lord, Lord Hatch. "Sordid" is a word of his choice. I suspect that it is his commentary on the particular budget. Within a budget of 35,079 mecu many changes take place. They are changes agreed by the Twelve. I hope very much that Parliament will in due course endorse those changes.

Lord Bruce of Donington
My Lords, is the noble Lord aware that he did not answer my question? Will he not come clean and agree with my description that the enlarged compulsory expenditure of the Community under the guarantee section of the European budget is in the existing circumstances insane and obscene?

§ Lord Young of Graffham
My Lords, I am grateful to the noble Lord, Lord Bruce of Donington. I am perfectly aware that I did not answer his question because I think that this is another question, and that it is too far from the point on the Order Paper.

§ Lord Hatch of Lusby
My Lords, the noble Lord answered me by saying that he hoped Parliament would approve the revised budget. Does this mean that the Government therefore agree with the cut that is being made in the revised budget for overseas aid and the great increase in the allocation for the CAP?

§ Lord Young of Graffham
My Lords, I was commenting on the use of the word "sordid" which is the choice of the noble Lord, not mine. We are one of twelve. If a revised budget is agreed by the Council—and it was agreed over the night of 7th–8th—it covers a large number of items. This is one of them. I take it that the United Kingdom, as a member and partner in Europe, must agree with the proposals.