§ Mr. Marlow
asked the Chancellor of the Exchequer what devices are open to European institutions to extend the financial resources available to them within the existing value added tax limit.
§ Mr. Ian Stewart
The 1 per cent. VAT limit is a firm ceiling on Community expenditure. It can be extended only by the agreement of all member Kate Governments and their national Parliaments.
Within the 1 per cent. ceiling, measures are available to the Commission which can alter the timing of traditional own resource payments and also allow it to overdraw in periods of cash flow difficulty. It is also possible for the Commission, under article 27 of the financial regulation, to carry forward a deficit from one year to the next. But these are all subject to the 1 per cent. VAT limit.