Budget Council (Hansard, 1 December 1981)

§ Mr. Ridley

The Budget Council on 24 November considered the amendments adopted by the European Parliament to the draft amending and supplementary budget No. 2 for 1981, established by the Finance Council on 19 October; the Council also considered the amendments and modifications by the Parliament to the draft 1982 budget, established on 23 July and amended on 19 October. I chaired the Budget Council, and my hon. Friend at present the Minister of State, Treasury represented the United Kingdom.

The Council was preceded on 23 November by a constructive meeting with a delegation of the European Parliament, the members of which explained the Parliament's reasons for many of their amendments and modifications; Ministers responded with explanations of their Government's general attitudes to the Parliament's proposals. There was also a useful discussion on the difference of view between the Council and the Parliament on the classification of items within the Community budget as between the two categories of obligatory and non-obligatory expenditure, to which differing treaty provisions affecting the relative budgetary powers of the two institutions apply. There will be further discussion on this matter in due course.

The Council rejected an amendment proposed by the Parliament to the 1981 amending and supplementry budget designed to add 62 million ecus—about £32 million at the rate of £1 equals 1.9118 ecu which I shall use for conversions in this statement—for a contribution to the ECSC for social measures in connection with restructuring of the steel industry, replacing this by a token entry accompanied by a declaration reaffirming member States' commitment to the agreement reached at the 24 June Steel Council and their determination to reach agreement of financing the measures needed to alleviate the social consequences of restructuring the European steel industry. 68W This declaration would also apply to provision for this purpose in the 1982 Budget. The Council modified an amendment by the Parliament that would have increased by 10 million ecus—about £5 million—the special provision for food aid to Poland. The council decided that this sum should, like earlier sums, be provided from existing provision for the EAGGF guarantee section.

For the obligatory expenditure in the 1982 draft budget, the Council considered the Parliament's proposal to delete from the 1982 draft budget, as amended, provision of 372 million ecus (about £195 million) for the consequences of monetary adjustments in October. The Council agreed to reduce the provision in the draft budget to 150 million ecus—about £78 million. The Council accepted a modification to reduce by 33 million ecus—about £17 million—the provision for aid for skimmed-milk powder for use as feed for calves, and rejected a proposal to add a similar sum to provision for the premium for suckler cows. The Council rejected eight proposals by the European Parliament which would together have added 79.11 million ecus—about £41 million—to the provision for food aid, but agreed to increase it by 15 million ecus—about £8 million—in the reserve chapter of the Budget.

The Council had a prolonged discussion on the provision for non-obligatory expenditure. As indicated by my right hon. Friend the Member for Blaby (Mr. Lawson), in his statement to the House on 31 July on the outcome of the Budget Council on 23 July 1981, the draft budget contains increases totalling 4.3 per cent. for commitment appropriations, and 14.5 per cent. for payment appropriations, above the level of corresponding provision in the 1981 budget. The European Parliament thereby had a margin, on the Council's classification, of 10.25 per cent.—425.8 million ecus, about £223 million—on commitments and 7.25 per cent—210.5 million ecus, about £110 million— on payments. The amendments that the Parliament had adopted totalled 1,070.3 million ecus—about £560 million—in commitments and 571.6 million ecus—about £299 million—in payments, representing increases on the draft budget of 24.7 and 17.2 per cent. respectively.

The Budget Council decided not to increase the Parliament's margin on commitment appropriations; but the Council did agree to an increase of 30 million ecus—about £16 million—in the Parliament's margin for payments, which would result in a total margin for payments of 240.5 million ecus—about £126 million.

Within this framework the Council adopted positions on the European Parliament's individual amendments to the 1982 draft budget. Among these were increases of 157 million ecus—about £82 million—in commitments, and 95 million ecus—about £50 million—in payments, for the regional fund, 174 million ecus—about £91 million—in commitments and 121 million ecus—about £63 million—in payments, for the social fund.

The Council also agreed to increases of 30 million ecus—about £16 million—in commitments and 9 million ecus—about £5 million—in payments for microelectronics, and an increase of 25 million ecus—about £13 million—in commitments for co-operation with non-associated developing countries. The Council agreed to other small, amendments totalling 14.3 million ecus—about £7 million—in commitments and 5.6 million ecus—about £3 million—in payments.

69W

The Council, also by qualified majority, agreed to a token entry for Community measures in the framework of integrate operations, and agreed that it would examine without delay the Commission proposal dated 19 November relating to Community measures within this framework in Northern Ireland, and that it would draw the necessary budgetary consequences as soon as possible.

The decisions of the Budget Council increase the total of the draft budget for 1982 to 23,006.5 million ecus—about £12,034 million—in commitments and 21,758.6 million ecus—about £11,381 million—in payments. These decisions will now be further considered by the Parliament in accordance with the provision of article 203 of the treaty.

I presented the Councils' decisions to the European Parliament's Budget Committee on 25 November. There was a useful discussion of the decisions during which the Committee's chairman expressed his appreciation of the efforts of the United Kingdom Presidency to improve relations between the Council and the Parliament.