§ Mr. Austin Mitchellasked the Prime Minister whether she will publish in the Official Report the overall limit which has been set on the Budget for 1985 and the base percentage used for putting a ceiling on agricultural spending.
§ The Prime MinisterThe Community has no budget for 1985. The draft budget was rejected by the European Parliament on 13 December and the Commission has not yet put forward new proposals. The financial guideline for agriculture, which is part of the budgetary discipline system, applies for the first time to expenditure in the 1986 financial year. The Commission's 1985 price fixing proposals have therefore been drawn up in accordance with the financial guideline.
§ Mr. Austin Mitchellasked the Prime Minister whether the European Economic Community has now agreed to a corrective mechanism for budgetary imbalances concerning an increase in the value added tax contribution under own resources; and whether the Government will require the money lent to the European Economic Community by way of an advance to be repaid out of savings within the present financial ceiling in the current year.
§ The Prime MinisterThe European Community agreed the mechanism for correcting budgetary imbalances at the Fontainebleau European Council. Detailed discussion of the text of the new own resources decision which will implement the mechanism is continuing.
Advances of own resources collected by member states on behalf of the Community are recovered from the sums paid on the normal dates in the current year.
§ Mr. Austin Mitchellasked the Prime Minister what were the conditions referred to in the last part of her reply 552W dated 29 March 1984, Official Report, column 242, concerning the proposal to increase the value added tax contribution to 1.4 per cent.; how many of these conditions have now been met; and whether she will update the expected yield from an increase in the value added tax contribution to 1.4 per cent.
§ The Prime MinisterThe conditions to which I referred, as I said when I reported to the House on the outcome of the March 1984 European Council, were that there should be effective control of agricultural and other spending and that there should be a fair sharing of the United Kingdom budgetary burden.
The Council of Ministers adopted on 4 December its conclusions on implementing the system of budgetary discipline to control agricultural and other spending. The Fontainebleau European Council agreed a new system for abating our contributions. Detailed implementation of this and other aspects of the increase in the Community's VAT own resources is still under discussion. We shall not ask the House to approve them until we are satisfied on all aspects.
Leaving aside the United Kingdom abatement, on the basis of the 1984 figures, an increase in the VAT ceiling from 1 to 1.4 per cent. would add some £3.5 billion to the maximum amount of revenue available to the Community, an increase of around 23 per cent. After taking account of the United Kingdom abatement, the increase would be lower, probably in the range 15 to 20 per cent.