European Community Budget (Hansard, 26 January 1981)

§ Mr. Lawson

The Commission has today announced further decisions on payments of budget refunds to the United Kingdom. The United Kingdom is to receive in the next few days:

i. a first payment of some £211 million under the financial mechanism, and
ii. a further instalment of some £60 million under the "supplementary measures" scheme.

The financial mechanism, negotiated originally in 1975, but amended following the Council agreement of 30 May 1980, provides for refunds of our gross contribution to the Community budget when the ratio of our contribution to total contributions exceeds by more than 10 per cent. the ratio of our GDNP to Community GDNP. In accordance with the 30 May agreement, provision for refunds in respect of one year's budget is made in the next year's budget, and the 1981 budget includes provision for refunds under the financial mechanism to the United Kingdom in respect of the 1980 budget of £281 million. The payment now agreed represents 75 per cent. of that figure. We expect to receive in the autumn of this year the remainder of our estimated financial mechanism entitlement in respect of the 1980 budget.

The "supplementary measures" scheme provides for contributions by the Community in respect of public sector investment programmes in the United Kingdom, principally in the regions. As announced on 18 December, the Commission has decided to make contributions totalling £177.3 million in respect of certain investment programmes of the central Government and public corporations in Wales and North West England, as a first instalment of £97.6 million was paid to us at the end of December. The supplementary measures regulation provides that a down payment of 90 per cent. of agreed contributions may be made before certification that the expenditure in question has been carried out, and the further instalment now to be paid represents the balance of the 90 per cent. down payment on the Wales and North West England programmes. The remaining 10 per cent. of the Community contributions in respect of these two programmes will be payable when the public authorities concerned have certified that the expenditure in question has been carried out.

The Commission is expected to decide in March on the amounts of Community contributions in respect of central Government and public corporations' investment programmes in other areas of the United Kingdom, in particular Scotland, Northern Ireland, the North Yorkshire 272W and Humberside and the South West. We expect to receive a first instalment of Community contributions in respect of these programmes before the end of March. The sum involved is likely to be around £270 million. This will bring our cumulative receipts under the supplementary measures scheme to some 80 per cent. of our total estimated entitlement in respect of the 1980 budget. We expect to receive the balance of our entitlement in the summer and autumn of this year.

The Community budget refunds are enabling public expenditure programmes generally in the United Kingdom to be sustained at levels higher than the country could otherwise have afforded. Expenditure programmes throughout the country are benefiting accordingly. The refunds do not, however, open the way to increases in domestic expenditure programmes beyond the levels already planned. These planned levels were set out on the assumption that substantial refunds would be received from the Community budget.

Details of the public investment programmes in Wales and North West England now attracting Community support under the supplementary measures scheme were given in the answer which I gave to my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) on 18 December—[Vol. 996, c. 390–92].