§ Mr. Thurnhamasked the Chancellor of the Exchequer if he will report on the outcome of the latest meeting of the European Community's Budget Council.
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§ Mr. BrookeThe Budget Council met in Brussels on 26–27 November to consider the European Parliament's amendments and modifications to the draft budget for 1986 which the Council established in September.
The Council established by qualified majority a revised draft budget amounting in total to some 34.6 billion ecu (some £21.6 billion at the budget exchange rate of 1.61 ecu to the £) in commitment appropriations and some 32.7 billion ecu (some £20.3 billion) in payment appropriations.
The revised draft budget, like the September version, provides for limiting the growth of agricultural market support expenditure in the existing 10 member states within the budget discipline guideline and for 567 million ecu (some £350 million) of agricultural guarantee expenditure in Spain and Portugal. It includes 1,400 million ecu (some £870 million) for the United Kingdom's VAT abatement.
The European Parliament's proposals called for additions of some 1.8 billion ecu to the payment appropriations for non-obligatory expenditure in the Council's September draft budget. The Council decided to respond by proposing to limit these additions to 821 million ecu, comprising 321 million ecu on account of enlargement, 400 million ecu for the so-called "cost of the past" overhang of past commitments in the regional development and social funds, and 100 million ecu in other budget lines.
The growth of non-obligatory expenditure compared with 1985 implied by these proposals is 1,210 million ecu (some £750 million) for commitment appropriations and 1,200 million ecu (some £745 million) for payment appropriations. The implied new "maximum rate" increases are some 14.6 per cent. for commitment appropriations and some 20.5 per cent. for payment appropriations.
Two member states, the United Kingdom and Ireland, for different reasons, opposed the revised draft budget, but were outvoted. I argued that, while it was axiomatic that the understandings on budgetary matters reached with Spain and Portugal during the accession negotiations must be fully respected, the Council should not propose special extra provision for the cost of the past" problem, which should be solved by reducing new commitments rather than increasing payments. The increase in non-obligatory expenditure proposed for this purpose represented a threat to budget discipline.
On food aid, the Council accepted the Parliament's proposal for establishing a new budget line for emergency food aid relief within the food aid chapter of the budget and reaffirmed its commitment to review the Community's food aid arrangements in the light of need.
The European Parliament will consider the Council's revised draft budget in the week beginning 9 December.