§ Mr. Eggarasked the Chancellor of the Exchequer whether he will make a statement about the Budget Council on 18 to 20 July.
§ Mr. Ian StewartI represented the United Kingdom at this Council in Brussels. On 18 July the Council met a delegation of Members of the European Parliament to exchange views on the Council's and the Parliament's approaches to the two budgets and on the spending priorities within them.
On 19 July the Council discussed the Commission's supplementary and rectifying budget for 1984 and a preliminary draft budget for 1985. Despite a debate lasting some 24 hours, the Council failed to reach a final agreement on either of these budgets. On the 1984 SRB, the United Kingdom proposed substantial economies in EAGGF guarantee expenditure in 1984 and deferring 552W EAGGF expenditure into 1985. Although the Netherlands delegation supported some elements of the United Kingdom's suggestions most other delegations approved the Commission's estimates or were only prepared to consider minor reductions to the Commission's plans, and were opposed to deferring expenditure. Some delegations, particularly Germany and the Netherlands, proposed that a substantial element of the agricultural overrun be financed by cuts in non-obligatory expenditure.
Towards the end of the Council, the Presidency proposed that savings of some 650 million ecu be made in 1984 (these were not specified) and that the Council adopt a resolution inviting member states to make advances of 1,350 million ecu to the 1984 SRB. I made it clear that I could not agree to this and that the Community budget must be financed by own resources within the existing ceiling.
As far as the 1985 PDB is concerned, the Council did reach agreement (on a provisional basis) to establish a draft budget within the 1 per cent. VAT ceiling allowing room for the European Parliament to add its margin of manoeuvre on non-obligatory expenditure. The agreement was provisional because several member states were prepared to accept reductions only if a commitment could be agreed in advance to finance any unavoidable agricultural overrun in 1985. I made it clear, as I had in discussion of the 1984 SRB, that we were not prepared to provide supplementary finance outside the own resources system, but indicated that it might be acceptable to bring forward the implementation of the own resources decision to late 1985 within a specified and limited amount. The German delegation insisted that new own resources could be made available only from 1 January 1986. The Council was therefore unable to agree any of the various Presidency compromise texts which would have embodied such a commitment.
The General Affairs Council discussed the outcome of the Budget Council at its meeting on 23 July and the Foreign Secretary will inform the House shortly of the outcome of this discussion.