HC Deb 01 May 1986 vol 96 cc476-7W
Mrs. Virginia Bottomley

asked the Chancellor of the Exchequer if he will make a statement on the latest meeting of the European Community's Economic and Finance Council.

Mr. Lawson

The ECOFIN Council met in Luxembourg on Monday 28 April. I represented the United Kingdom.

The Council discussed the general budgetary situation of the Community and the pressures on agricultural spending, in the light of the Agriculture Council's decisions of last week on the price fixing and other developments. The Commission drew attention to the dangers of overrunning the 1.4 per cent. VAT ceiling in 1986 and 1987. It was generally recognised by the Council, however, that these spending pressures would have to be contained within the 1.4 per cent. ceiling and that savings would therefore be needed, especially in 1987. I made clear the United Kingdom's view that all Community expenditure should be subject to budget discipline and that finance should govern expenditure in the Community as in national budgets.

The Council met a delegation from the European Parliament led by the President of the Parliament, M. Pflimlin. Several members of the delegation made clear that they recognised the need for budgetary discipline, though they did not endorse certain important aspects of the Council's approach to it. It was agreed that, in accordance with the Council's conclusions of December 1984, the Presidents of the Council, the Parliamet and the Commission should meet to discuss possible procedures for a budget discipline common to all three institutions and that the Parliament would submit its ideas in writing in advance. The delegation from the Parliament declined the Council's invitation to discuss the reference framework for the 1987 Community budget.

The Council concluded its meeting by agreeing unanimously on a reference framework for the 1987 Community budget in accordance with the budgetary discipline conclusions of December 1984. The framework provides for expenditure on agricultural market support and non-obligatory expenditure to be kept within the budget discipline guideline limit and the maximum rate of increase laid down in the Treaty, respectively, while noting that it will be necessary to take account during the budgetary procedure of the European Court's forthcoming judgment on the disputed 1986 budget, the supplementary budget for 1986, the "cost of the past" problem in the structural funds, and enlargement.

Copies of the Council's conclusions on the 1987 reference framework will be placed in the Library as soon as they are received from Brussels.