EC Budget Council

HC Deb 25 November 1988 vol 142 cc48-9W

Mr. Bright

To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the recent meeting of the European Community's Budget Council.

Mr. Brooke

The council considered the European Parliament's amendments and modifications to the 1989 draft budget established on 26 July at columns500–01; and the Commission's proposed amending letter. The revised draft budget to which the council agreed totalled 46,190 mecu (about £32,100 million) in commitments and 44,668 mecu (about £31,050 million) in payments.

As regards non-compulsory expenditure, the council accepted amendments totalling 109 mecu (about £75 million) in commitments and 96 mecu (about £65 million) in payments (around one third of the total increases proposed by the Parliament at its first reading of the budget on 27 October). Only a small part of the amendments to which the council agreed were for "privileged" expenditure (the structural funds, the R and D framework programme and the integrated Mediterranean programmes). The bulk were for other, "non-privileged" non-compulsory expenditure. The overall growth of this form of expenditure in the revised draft budget by comparison with 1988 is 5.6 per cent. in commitment and 5.4 per cent. in payments, somewhat below the calculated maximum rate of 5.8 per cent. communicated by the Commission at the beginning of the budget procedure.

As regards compulsory expenditure, the council established an amending letter which, amongst other things, reduces the total provision for agricultural guarantee expenditure in the 1989 draft budget by 1,366 mecu (about £950 million) and increases the United Kingdom's abatement in 1989 under the Fontainebleau mechanism by 50 mecu (about £35 million).

Taking all of these factors together, the revised draft budget is around 2,200 mecu (about £1,500 million) below the overall ceiling in the financial perspective attached to the inter-institutional agreement (IIA) between the council, the Parliament and the Commission.

The council also agreed the basis on which it would enter into a process of co-decision with the European Parliament under article 203(9) of the Treaty to agree the overall growth of non-compulsory expenditure at the time of the Parliament's second reading of the budget in the week beginning 12 December.