§ Mr. Teddy Taylorasked the Chancellor of the Exchequer (1) pursuant to the statement on 11 July, Official Report, columns 613–21, what is his estimate of the United Kingdom net contribution to the European Economic Community in respect of 1986 before and after the agreement on the revised 1986 budget on 10 July; and if he will explain the precise reasons why the estimated net contribution in respect of 1986 will be lower in consequence of the revised budget;
(2) what estimate he has made of the amount of the additional expenditure on the structural funds which will accrue to the United Kingdom following the agreement on the revised European Economic Community budget for 1986; and if he will make a statement.
§ Mr. BrookeNo forecast of our net contribution to this year's Community budget has so far been made, though one will be included in the White Paper on the 1986 67W Community budget to be published in August or September. The reduction in our net contribution to the Community budget in 1986 compared with that in respect of the Council's Second Reading budget is estimated at around £250 million. The main reason for this reduction is the increase in the United Kingdom's abatement of 500 mecu (£310 million). This will mean that our gross contribution to the 1986 budget will be less than our gross contribution to the Council's Second Reading budget, and our VAT rate will fall from 0.69 per cent. to 0.68 per cent. We shall also benefit from additional receipts resulting from the extra expenditure contained in the new budget. The increase in our receipts from the structural funds could be of the order of £150 million.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer what is his policy towards the financing of the 1987 European Economic Community budget solely by the 1.4 per cent. value added tax levy plus the other funds levied by the European Economic Community in accordance with the Treaty of Rome, without the provision of additional funds from intergovernmental agreements; and if he will make a statement.
§ Mr. BrookeThe Government consider that the 1987 European Communities' budget should be financed solely from the revenue described in the Commission's revenue forecasts for 1987 in accordance with the treaty. We see no case for the provision of any additional funds.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer what is the policy of the Council of Finance Ministers towards making provision for 1986 European Economic Community spending to be carried forward to 1987.
§ Mr. BrookeThe Council's recent decisions on the 1986 budget were influenced by a concern to avoid where possible the carrying forward of expenditure from 1986 into 1987.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer if he will make a statement on the basic difference between commitment appropriations and payment appropriations as set out in the statement of 11 July, Official Report, column 621.
§ Mr. BrookeCommitment appropriations lay down the level of commitments which may be entered into during the year. In the case of agricultural guarantee expenditure, and some other parts of the budget, these commitment appropriations must be matched in the budget by equivalent payment appropriations, as the entry into the contract and its payment take place simultaneously. These are known as non-differentiated appropriations. Where such commitments may not be liquidated immediately, as inmost of the structural funds and non-obligatory expenditure, separate commitment and payment appropriations (differentiated appropriations) are provided. Payment appropriations therefore comprise the maximum amounts which are payable during the budgetary year towards the relevant commitments entered into by the Commission.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer what were the principal factors which led to the estimate by the Council of Finance Ministers that payment appropriations in the revised 1986 budget, should exceed the 1985 total by 39.18 per cent., as set out in the statement of 11 July, Official Report, column 621.
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§ Mr. BrookeThe increase agreed for non-obligatory expenditure payments appropriations took account of the extra costs arising from enlargement of the Community through the accession of Spain and Portugal. The increase also allowed for a reduction of the so-called cost of the past, whereby the size of commitments which the Commission is authorised to enter into has exceeded the payments appropriations available for carrying them out.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer what were the principal factors which led to the estimate by the Council of Finance Ministers that commitment appropriations in the revised 1986 budget should exceed the 1985 total by 14.54 per cent., as set out in the statement of 11 July, Official Report, column 621.
§ Mr. BrookeThe increase agreed for non-obligatory expenditure commitment appropriations was primarily to allow the structural funds to extend their activity to the new member states, Spain and Portugal.
§ Mr. Teddy Taylorasked the Chancellor of the Exchequer why he is not seeking to invoke the 4 December 1984 agreement of the European Council to claw back in future years exceptional spending in 1986 within the European Economic Community; and if he will make a statement.
§ Mr. BrookeArticle 5 of the budget discipline conclusions refers to agricultural expenditure. We shall, of course, be seeking to ensure that agricultural guarantee expenditure in future years is limited in accordance with the financial guideline and that the provisions of article 5 are respected.