HC Deb 24 June 1985 vol 81 cc323-5W
Mr. Teddy Taylor

asked the Chancellor of the Exchequer what has been the total sum contributed by the United Kingdom to the EEC since 1 January 1973, what has been the total amount received in grants, rebates and other payments over the same period; and how much of the total sums received were in respect of payments to facilitate the subsidised export of food to third countries.

Mr. Ian Stewart

[pursuant to his reply, 20 June 1985, c. 222–23]: The most recent information of the United Kingdom's total contribution to the EC including receipts and refunds since 1 January 1973 is set out in the table:

£ million
Gross contribution Receipts other than refunds Refunds Net total
From 1 January 1973 to 31 December 1984 17,895 9,325 3,145 5,425

£1,773 million of total United Kingdom receipts were in respect of subsidy payments to farmers and traders to facilitate the export of food to third countries at world prices.

Mr. Teddy Taylor

asked the Chancellor of the Exchequer what estimate he has made of the percentage increase in the overall spending of the Common Market which will take place if the VAT element in its income is increased from 1 to 1.4 per cent.

Mr. Ian Stewart

[pursuant to his reply, 20 June 1985, c. 222–23]: Increases in the overall spending of the Community from year to year will depend on the decisions taken by the Community's budgetary authority. In the case of the Council of Ministers, these decisions will be taken in accordance with the agreed arrangements on budget discipline. The potential increase in the Community's income, measured against own resources available at present and disregarding the supplementary finance provided in 1984 and 1985 through the inter-governmental agreements will amount to some 15 to 20 per cent., depending on the size of the United Kingdom's abatements.

Mr. Teddy Taylor

asked the Chancellor of the Exchequer what estimate he has made of the increase in the United Kingdom gross contribution to the EEC consequent on the proposal to increase the VAT contribution from 1 to 1.4 per cent.

Mr. Ian Stewart

[pursuant to his reply, 20 June 1985, c. 222–23]: Because of the Fontainebleau abatement system, the United Kingdom's VAT rate, post-abatement, is likely to be less than 1 per cent. whatever the VAT rate within the 1.4 per cent. ceiling in other member states. Thus, the Fontainebleau measures, involving both the increase in the VAT ceiling to 1.4 per cent. and the introduction of arrangements for abating the United Kingdom's VAT contribution, will not of themselves lead to any increase in the United Kingdom's gross contribution.

Mr. Marlow

asked the Chancellor of the Exchequer if he will set out the projected net value added tax percentage contribution to the European Economic Community for 1985 and for each of the last four calender years accordingly to (a) the value added tax share contribution and (b) the previous formula.

Mr. Ian Stewart

[pursuant to his reply, 20 June 1985, c. 222]: The figures requested cannot form the basis of a valid comparison, since the Fontainebleau formula applies only to 1985 and subsequent years, and before that there has been no established formula for refunding or abating the United Kingdom's excess contributions.

Mr. Marlow

asked the Chancellor of the Exchequer if he will set out the effective value added tax percentage rate paid into the European Economic Community budget net of rebates corresponding to that year for each of the last four calendar years.

Mr. Ian Stewart

[pursuant to his reply, 20 June 1985, c. 222]: The table sets out the information requested for the years 1981 to 1984. For each year the table shows the United Kingdom's actual VAT rebate as it would have been reduced by the amount of the net refund paid in respect of that year in the following year.

Effective VAT percentage rate
1981 *0.13
1982 0.55
1983 0.74
1984 †0.66
* This figure reflects the Commission's overestimate of the United Kingdom's net contribution for 1981 and a correspondingly high rebate.
† The VAT rate shown for 1984 does not reflect the supplementary contribution made by the United Kingdom under the 1984 inter-governmental agreement; allowance for that contribution would imply a higher effective VAT rate for 1984.

The figures shown do not provide a valid basis for comparison between the application of the Fontainebleau abatement system and the ad hoc refunds paid in the earlier years shown. The latter were not calculated according to a percentage formula and were falling in amount between 1981 and 1983.