HC Deb 03 July 1987 vol 118 cc177-9W
Mr. Knox

asked the Chancellor of the Exchequer if he will report on the outcome of the European Community Budget Council held in Brussels on 2 July.

Mr. Brooke

The Budget Council considered the Community's budgetary problems in the current year in the light of the Commission's proposals for a supplementary and amending budget and the conclusions agreed by the European Council on 29–30 June. I represented the United Kingdom.

The Council noted that the European Council's conclusions implied that the full amount of the prospective overspend in agricultural guarantee expenditure this year should be offset by adjusting the system for advance pyments from the Community budget to member states for this expenditure. The Commission is expected to make specific proposals shortly for discussion in the Agriculture Council on 13–14 July.

The Council then proceeded after long deliberation to establish, subject to a waiting reserve by the Dutch delegation, a draft supplementary and amending Budget to cover the rest of the deficit in the current year as projected by the Commission amounting to some 2,100 mecu (Some £1.5 billion). The Council's proposals have five principal components.

First, the unused margin of VAT withn this year's 1.4 per cent. ceiling, some 627 mecu net of Spanish and Portuguese refunds, would be called up. Second, savings of 198 mecu would be made in obligatory expenditure programmes, in particular agricultural guidance, fisheries, food aid arid Mediterranean financial protocols.

Third, the refunds of 10 per cent. of levies and duties made to member states to cover collection costs would be delayed from the latter part of this year until early next year to the extent necessary to save 400 mecu this year. The member states agreed that these payments should be delayed on a voluntary basis, if necessary, pending amendment of the relevant Council Regulation, 2891/77.

Fourth, the 1987 instalments of the repayment to member states of the 1984 inter-governmental agreement would be deferred, saving 257 mecu in the current year.

Fifth, the Commission's revenue projections would be increased by 651 mecu to reflect more recent estimates of revenue and expected underspends on credits in the 1987 budget and carried forward from 1986. The Council agreed that, if the adjustments to the Commission's earlier revenue projections should prove excessive, the 1984 IGA repayment instalments due in 1988 could likewise he deferred as necessary.

Provided that the Dutch delegation lifts its waiting reserve, the Council's proposals will be submitted to the European Parliament today. The Parliament is expected to consider them during its plenary session next week.

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