HC Deb 15 December 1978 vol 960 cc525-8W
Miss Boothroyd

asked the Chancellor of the Exchequer if he will make a statement on the outcome of the meetings of the EEC Budget Councils on 5th and 12th December.

Mr. Joel Barnett:

In my reply of 24th November I informed the House of the outcome of discussion in the Budget Council on 20th November. In particular I referred to the proposals of the European Parliament for increases in commitment appropriations for the Regional Development Fund totaling

general government—central and local government combined. This is available in total for the years from 1946, and in the detail requested for the years from 1958.

480 MEUA and to the fact that, in the absence of a qualified majority to reject the Parliament's amendments, they had been accepted although opposition to exceeding the maximum rate of increase applicable to non-obligatory expenditure had been maintained by some member States. I also referred to the probability that the level of commitment appropriations in 1979 for the RDF, with the appropriate implications for the maximum rate, would need to be discussed at the European Council.

At its meeting on 5th December, the European Council maintained the position it had adopted a year previously on provision for the Regional Development Fund, including commitments of 620 MEUA in 1979.

The Budget Councils on 5th and 12th December discussed the implications of the decision of the European Council with particular reference to the Treaty provision requiring agreement between the Parliament and the Council, which together constitute the budgetary authority, on any new maximum rate for non-obligatory expenditure in excess of a rate determined according to the procedure laid down in Article 203 of the Treaty. The maximum rate so determined by the Commission for 1979 is 11.4 per cent. which corresponds to a margin of manoeuvre of 133 MEUA for the European Parliament in relation to commitment appropriations. The total of 629 MEUA of increases proposed by the Parliament in respect of commitments, and accepted by the Council, to which I also referred in my previous reply, included 480 MEUA for the Regional Development Fund (380 MEUA for Chapter 55 of the Budget and 100 MEUA for Chapter 56 relating to the non-quota section of the Fund), and just under 133 MEUA for non-obligatory expenditure other than in relation to the RDF.

The Budget Council was informed on 12th December that the Budgets Committee of the European Parliament was likely to recommend to the Parliament maintenance of the total provision for the RDF in the 1979 Budget at the level accepted by the 20th November Council, but the Budget Council on 12th December was unable to agree to a new maximum rate of the size believed to be envisaged by the European Parliament.

Recognising the need for the Parliament and Council to reach agreement, if possible, on a new maximum rate, the Budget Council discussed the position that the German Presidency might, on behalf of the Council, take with the Eurocpan Parliament before the latter took its final decisions on the draft 1979 Budget on 14th December. The Budget Council expressed the hope that it would be possible for agreement to be reached with the European Parliament on a new maximum rate which did not greatly exceed 133 MEUA. The Council recognised, however, that if agreement could not be reached between the two Institu tions on a new maximum rate of non-obligatory expenditure, this could make it impossible to declare that the Community Budget for 1979 had been finally adopted and might, for the first time, result in the application of article 204 of the EEC Treaty; this article provides, subject to certain qualifications, for the introduction of a system limiting expenditure each month to one-twelfth of the Budget appropriations for the preceding financial year if, at the beginning of a financial year, the Budget has not yet been adopted.