HC Deb 19 December 1979 vol 976 cc208-10W
Mr. Waller

asked the Chancellor of the Exchequer whether he will make a statement on the outcome of discussions in Strasbourg on the Community budget.

Mr. Lawson

The Budget Council met on 12–13 December both separately and on several occasions with a delegation of the European Parliament.

The Council considered, and took decisions on, modifications proposed by the Parliament to the third draft supplementary and amending budget for 1979. In the course of discussion I suggested that the Council and Parliament might jointly agree to invite the Court of Auditors to examine the circumstances leading to the presentation of the supplementary budget, and in particular to ensure that the financial monitoring and reporting system was as thorough as possible and that financial control was maintained at all times. Although this suggestion secured some support it did not obtain a qualified majority.

The Council carefully considered the views of the Parliament and the decisions taken by the Council on 23 November on the draft budget for 1980.

Bearing in mind the provisions of article 203.9 of the Treaty of Rome relating to the possible fixing by agreement between the Council and Parliament of a new maximum rate, the Council indicated to the Parliament its readiness to agree to an increase of 200 MEUA in the level of non-obligatory expenditure above that decided by the Council on 23 November.

After extensive discussion with the delegation of the Parliament, the Council agreed a draft joint declaration for adoption by the Council and the Parliament on measures to reduce milk surpluses. The text was as follows: The Council and Parliament agree that they will, by way of a draft Rectifying Budget to the 1980 Budget, on the basis of a Commission proposal for a Preliminary Draft, draw the budgetary consequences of the decisions, notably in the dairy sector, which the Council will take, as early as possible in 1980 and in any case before the campaign prices on the basis of Commission proposals including those of 29 November 1979, the Parliament's proposals for modification of 7 November 1979 and the Council guidelines of 21 June 1979 on the co-responsibility levy. The Council agrees with the Parliament that these budgetary consequences must ensure a curbing of budgetary expenditure on agricultural guarantees.

The Council also put forward texts of declarations on its own authority on budgetisation of borrowing and lending operations, and on budgetisation of the European development fund.

On 13 December the European Parliament adopted the third supplementary and amending budget for 1979 as modified; it will be published in the Official Journal of the European Communities. The European Parliament also adopted a resolution which, after dissenting from the Council's views on the 1980 draft budget, as modified by the Council rejected this draft budget and called upon the Commission to present a new preliminary draft budget for 1980 on the basis of which the Council would present a new draft budget to the Parliament.

In these circumstances the draft joint declaration and the other texts of the Budget Council lapsed.

Certain provisions of article 204 of the Treaty of Rome, the financial regulation of 21 December 1977 and of regulation 2891/77, will now come into operation from the beginning of 1980; they relate to a limitation on monthly Community expenditure to the lower of the provision in the 1979 budget or the provision in the 1980 draft budget and to limitation of the VAT element in monthly contributions by member States.