European Economic Community (Budget) (Hansard, 5 November 1987)

§ Mr. Teddy Taylor
asked the Chancellor of the Exchequer what is the policy of Her Majesty's Government in relation to the proposals presented by the EEC Commission on budgetary discipline (Com (87) 430) and in particular toward whether the exceeding of spending because of exceptional circumstances should fall to be dealt with by unanimity or majority vote.

§ Mr. Brooke
As my right hon. Friend the Prime Minister told the House on 1 July, the Government consider effective and binding control over Community spending, in particular on agriculture, to be essential. We are not convinced of the necessity for any continuing provision to be made for "exceptional circumstances". The voting rules in relation to such a provision would depend on the legal base for the Council decision or regulation that gave effect to it.

§ Mr. Teddy Taylor
asked the Chancellor of the Exchequer if he will outline the manner in which decisions on the breaching of EEC budget limits because of exceptional circumstances under the agreement of the Council of 4 December 1984 have been made; and if he will make a statement.

§ Mr. Brooke
The 1984 budget discipline agreement first came into effect with the Community budget for 1986 when the financial guideline for agricultural expenditure was set at 21,012 million ecus. On 7 July 1986 the Council of Economic and Finance Ministers agreed that agricultural expenditure in 1986 could exceed the financial guideline by an amount which could be justified mainly by the exceptional circumstances of the abnormally large depreciation of the United States dollar. The supplementary and amending budget for 1986 subsequently increased provision for expenditure on agriculture from the guideline figure of 21,012 million ecus to 22,112 million ecus.
The financial guideline for 1987 remains at 22,961 million ecus, as was stated in my reply to the hon. Member for Dagenham (Mr. Gould) on 6 February at column 840. It was agreed at the European Council on 29–30 June that agricultural expenditure should be kept within the guideline this year by means of an adjustment in the system of payments to agricultural intervention agencies in the member states, so that payments will in future be made in arrears instead of in advance. The necessary amendment to the EAGGF financing regulation was adopted by the Agriculture Council of 19–20 October. The Government supported this change as a step towards more effective financial control of agricultural expenditure.