HL Deb 14 March 1988 vol 494 cc900-1

2.40 p.m.

Lord Jay asked Her Majesty's Government:

What will be the United Kingdom payment to the EC budget, less rebate, for the first year in which the agreement reached at Brussels on 13th February takes effect compared with what would otherwise have been payable.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

My Lords, the Commission's latest budget proposals before amendment by the Council and the European Parliament envisaged that our gross contribution in 1988 would be some 5,120 million ecu or £3,550 million after abatement, compared with an estimated maximum of some 4,640 million ecu or £3,220 million if no agreement had been reached at Brussels. Because of higher United Kingdom receipts, our net contribution will increase by less than our gross contribution.

Lord Jay

My Lords, I thank the Minister for those figures. Do they not mean that, far from a firm limit having been set and financial discipline imposed on the common agricultural policy, expenditure will now increase further, as well as the liability on the British taxpayer?

Lord Brabazon of Tara

My Lords, growth in agricultural spending will be limited to 74 per cent. of the growth rate of Community GNP. That limit, unlike previous limits, will be incorporated in a legal instrument. It should therefore be sustainable.

Lord Hooson

My Lords, is the Minister able to tell us what the German contribution to the same budget is?

Lord Brabazon of Tara

My Lords, I do not believe that I can answer that question precisely. However, I know that one German newspaper stressed that the cost to the Federal Republic would be 4 billion deutschmarks, rising to 10 billion deutschmarks by 1992.

Lord Bruce of Donington

My Lords, is it not the case that in Government expenditure plans covering the year in question the net payment to the EC for the year 1988–89 was put at £800 million; for 1987–88 it was put at £1,400,000; and that, even taking the calendar year (which I presume the noble Lord is doing), the figures that he has given to the House represent a colossal increase over and above what the Government had originally planned? Will the noble Lord tell the House whether those figures include £900 million which has been requested by the Commission from the United Kingdom on loan or non-reimburseable advance towards the cost of disposing of surplus stocks?

Lord Brabazon of Tara

My Lords, from the information that I have, the increase in the United Kingdom's net contribution arising from the future financing agreement is some £200 to £300 million a year compared with the continuation of the current 1.4 per cent. VAT ceiling, and £100 to £200 million a year compared with the effective level of spending in 1987. From the figures available to me I cannot identify the £900 million to which the noble Lord refers.