European Community Budget (Hansard, 15 October 1975)

Mr. Joel Burnett

The Budget Council considered the preliminary draft budget containing estimates by the EEC Commission of expenditure in 1976. The total expenditure proposed amounted to 8,058 million units of account. Agreement was reached in the two meetings of the Council on cuts totalling 584 million units of account and the Council adopted a declaration that during later stages of the budgetary procedure it would take account of any further economies in expenditure which could be made.

The budget provisionally approved, and subsequently forwarded to the European Assembly, amounts to 7,474 million units of account, about £3,100 million; this represents an increase of about 19 per cent. over the 1975 budget total. The increase is partly due to inflation and partly to the expansion of existing Community policies.

The Assembly will return the budget for further consideration by the Council at the end of November.

Her Majesty's Government's approach to the preliminary draft budget was conditioned by the compelling need to contain the growth in public expenditure; our contribution to the Community budget is part of this, and I therefore looked with particular care at the proposals in the budget for increases in Community expenditure. I consider the outcome of the Council discussions has been on the whole satisfactory for the United Kingdom, both generally and in the areas of most importance to us. The growth in the budget has been contained at an acceptable level.

The decisions taken by the Budget Council on the regional development fund will not hinder the objective, to which Her Majesty's Government attach importance, of its becoming operational as soon as possible. The Council fixed the commitment appropriations at the level of 500 million units of account proposed by the Commission, and the level of actual payments appropriations at 300 million units of account should, allowing for a considerable carry-forward of unspent appropriations from 1975 to 1976, be sufficient to meet all payments likely to be made in 1976. If they in fact turn out to be higher the Council accepted that a supplementary budget might be required.

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The provision of 400 million units of account decided by the Council for the European social fund was lower than the 500 million units of account proposed by the Commission, but part of the reduction reflected the fact that no policy decision had yet been taken by the Council on anti-crisis measures to assist areas particularly affected by current economic difficulties. I regret the further cuts made by the Council on the Commission's proposals since this is the only area of Community expenditure directly concerned with assistance to the unemployed. However, it is relevant that, since expenditure from the social fund is classified as non-obligatory, the European Assembly has the last word on the amount of provision in the budget.

The Budget Council decided to delete appropriations proposed by the Commission for aid to Non-Associates because, although the Council had agreed in July 1974 to the principle of granting such aid, there had not yet been a Council decision on the methods of putting this principle into practice. But I made it clear that I accepted the deletion on the strict understanding that it was without prejudice to subsequent policy decisions of the Council. A statement recording the Council's agreement on the point has been included in the general introduction to the draft budget as "established" by the Council.

The provision agreed in the Budget Council on 29th September for agricultural guarantee expenditure was 5,160.5 million units of account, nearly 460 million units of account above the expected out-turn for 1975, after taking account of a supplementary budget for 1975 also agreed by the Council. This, in accordance with normal budgetary procedure of the Community, represented an estimate of continuing the common agricultural policy in its present form and with support prices at their current levels. The Government are greatly concerned at this very large increase in the cost of the CAP and consider that it underlines the urgent need to make changes in the agricultural support arrangements which will lead to reduced expenditure. However, the proper forum in which to pursue these changes is the Council of Agricultural Ministers which is to resume its "stocktaking" discussions of the CAP at the end of the month.