§ Mr. Andrew MacKay
asked the Chancellor of the Exchequer if he will make a statement about the European Commission's latest cash position and the implications for the United Kingdom.
§ Mr. Brooke
The European Commission estimates that its spending obligations this month will exceed available revenues under the budget for 1987.
The Commission has therefore requested member states to advance from April into March the payment of own resources other than VAT in accordance with article 10(2) of Council regulation 2891/77: a similar advance was made last month. The Government are satisfied that this request is within the vires of article 10(2) and accordingly will today make an advance payment of some £148 million from the Consolidated Fund under section 2(3) of the European Communities Act, 1972. The payment of levies and duties on 20 April will be reduced by the amount of the advance.
The Commission has informed us that it expects in addition to have to overdraw its accounts with member states this month in accordance with article 12(2) of Council regulation 2891/77. The amount involved for the United Kingdom is expected to be of the order of £95 million. The Government propose to meet this obligation too from the Consolidated Fund in accordance with section 2(3) of the European Communities Act 1972. Repayment of any drawing under this facility will be made by deduction from our April own resources payments. The amount drawn by the Commission in February under this provision, some £24.2 million, was recovered from the VAT payment made on 2 March.
Neither of these facilities will involve increasing the total amounts which the Community is authorised to spend during 1987. There will therefore be no net additions to public expenditure.