HC Deb 30 March 1984 vol 57 cc308-9W
Mr. Gould

asked the Prime Minister whether the proposal made to the European Economic Community Council for an increase in the value-added tax contribution to 1.4 per cent. was linked to a restoration of the veto on farm price increases.

The Prime Minister

No. There is no link between the question of a possible increase in the VAT ceiling to 1.4 per cent. and the procedures by which agricultural prices are determined in the Council. But we have always said that we are only prepared to consider an increase in the VAT ceiling if agricultural and other expenditure is brought under effective control.

Mr. Austin Mitchell

asked the Prime Minister whether she took into account at the recent summit meeting of the European Economic Community Council of Ministers the effect of an increase in the value added tax own resources contribution on the medium term financial strategy; and if she will publish in the Official Report a table showing what the effect of the French proposals would be on the public sector borrowing requirement in each of the next five years.

The Prime Minister

I made clear at the European Council that we would not agree to any increase in the Community's own resources unless there were agreement also on budgetary discipline and a corrective mechanism for budgetary imbalances. A satisfactory agreement on these two points should adequately protect the PSBR and public expenditure from the effect of any increase in own resources.