European Community (Council of Finance Ministers)

HC Deb 29 November 1979 vol 974 cc783-6W

Mr. Hordern

asked the Chancellor of the Exchequer whether he will make a statement on the meeting of the EEC Budget Council on 23 November.

Mr. Lawson

The EEC Budget Council met on 23 November to consider amendments and modifications, proposed by the European Parliament, to the draft budget for 1980 of the European Communities. The draft budget, after previous amendments by the Council, provided for commitment appropriations of 16,398 MEUA—about £11,070 million and payment appropriations of 15,324 MEUA—about £10,345 million. The Parliament proposed the addition of 1,589 MEUA—about £1,073 million—for commitments and 312 MEUA—about £211 million—for payments, including an extra 350 MEUA commitment and 83.125 MEUA payments for the regional fund.

The Council first held a general discussion on the 1980 budget. I emphasised the extreme importance attached by Her Majesty's Government to rectifying the situation as regards the size of the United Kingdom's net contribution to the Community budget. I stressed that a solution must be found that acted on the whole of the problem, not just in our high contribution, but also on our low receipts; that a solution must operate in respect of 1980 and subsequent years; and that an agreed solution must last as long as the problem lasts.

The Council held a preliminary discussion with a delegation from the European Parliament led by its President. The views of the delegation on the 1980 budget were carefuly considered by the Council before it took its decision on the Parliament's detailed proposals.

The Budget Council also drew to the Parliament's attention the difficulties faced by member States in relation to claims for FEOGA guarantee funds as a result of the non-adoption of the 1979 supplementary budget by the Parliament at its previous session.

In the initial discussion the Council was disposed not to reject a number of the Parliament's amendments including—with the support of the United Kingdom—a proposed increase of 350 MEUA for the regional fund; but the total of those amendments greatly exceeded the maximum rate of increase for non-obligatory expenditure in the 1980 budget, and there was no qualified majority in the Council to increase the maximum rate. The Council was therefore able to accept amendments proposed by the Parliament only to a total of a little over 255 MEUA—about £172 million—in commitments. The major part—some 84 per cent. of the increase agreed by the Council above the level of the draft budget was allocated to the regional and social funds; the distribution included 165 MEUA—about £111 million—for the regional fund, 50 MEUA—about £34 million—for the social fund—of which 37 MEUA—about £25 million—was for article 5100 relating to aids for vocational training and geographical mobility—5 MEUA—about £3 million—in the energy sector, 3.545 MEUA—about £2 million—for research, 21.25 MEUA—about £14 million—for development expenditure, of which 20 MEUA was for aid to non-associated territories, and 9.535 MEUA—about £6 million—for other institutions including the Parliament's own budget. The total increase in payment applications of 87 MEUA—about £59 million—included 55 MEUA for the regional fund, 15 MEUA for the social fund, 2.2 MEUA for energy, 1.545 MEUA for research and 3 MEUA for development aid.

The Council rejected by qualified majority the Parliament's proposed modifications on FEOGA guarantee expenditure. The rejection was accompanied by a formal declaration, to which seven member States, including the United Kingdom, subscribed in the following terms: The Council has noted with sympathy and understanding the reasons which have led the European Parliament, within the framework of budgetary procedure, to propose changes in the Guarantee section. The council interprets the adoption by the Parliament of these proposed modifications as the will of the Parliament to indicate its preoccupation faced with the financial consequences of persistent agricultural surpluses. The Council shares this preoccupation and accepts that, provided that the fundamental principles of the common agricultural policy are not called into question, changes will be necessary. The Council agrees with the Parliament that early action by the council is an essential step to secure a better balance within the agricultural section of the budget and within the budget as a whole. The Council draws the attention of the Parliament to the fact that the Commission has recently made a number of suggestions to this end. The Council will examine these suggestions with all the consideration that their importance involves. The Council believes that, until the decisions have been taken, it would be premature to accept the Parliament's proposals to change the appropriations in the draft budget, which represent a reasonable estimate of the costs of the measures curently in force. For this reason it had to reject the proposed modifications, without in any way rejecting the motivation which lay behind them. Two member States—Italy and the Netherlands—dissociated themselves from this statement.

The proposals of the Parliament in relation to its own budget were accepted by the Council, but the Presidency was asked to discuss further with the Parliament two amendments, relating to the payment of members and the rental of accommodation.

The decision of the Council on the Parliament's proposals will be considered by the Parliament at its next plenary session in December, after which there may be a need for further exchanges between the Parliament and the Council before the 1980 budget is adopted.