HC Deb 14 July 1986 vol 101 cc430-1W
Mr. Marlow

asked the Chancellor of the Exchequer if he will make a statement on the effectiveness of the European Economic Community financial mechanism.

Mr. Brooke

The European Economic Community financial mechanism is working as agreed at Fontainebleau. Over the period January to July the United Kingdom benefited from VAT abatements at the rate of 117 mecu (£75 million) a month (based on a total abatement provision for 1986 of 1,400 mecus (£900 million)). The European Court ruled, in its judgment annulling the Parliament's adoption of the 1986 budget, that all budgetary acts before the date of the judgment should remain valid. The Budget Council of 7–8 July established a new draft 1986 budget containing a total abatement provision of 1,900 mecu (£1,220 million) (that is incorporating the 500 mecu additional provision originally included in the Commission's proposed supplementary budget).