§ Mr. Teddy Taylorasked the Prime Minister if she will raise at the next meeting of the European Council the question of the procedure which will require to be adopted to implement section 1.4 of the Fontainebleu European Council conclusions following the agreement on the revised European Economic Community budget; and if she will make a statement.
§ The Prime MinisterI see no need for this question to be raised at the next meeting of the European Council.
§ Mr. Teddy Taylorasked the Prime Minister why Her Majesty's Government agreed to a revised European Economic Community budget for 1986 which did not conform to the provisions of the 4 December 1984 agreement negotiated in the European Council; and if she will make a statement.
§ The Prime MinisterThe Government took the view that the abnormally large depreciation of the dollar was an exceptional circumstance which justified some excess over the budget discipline guideline figure for agricultural guarantee expenditure. The Government made clear their profound concern about the increases in non-obligatory expenditure, which in our view could only partly be justified by the enlargement of the Community. The new budget will, however, reduce the United Kingdom's net contribution by some £250 million compared with the Council's Second Reading draft budget, and the United Kingdom's VAT rate will be reduced to 0.68 per cent.
§ Mr. Teddy Taylorasked the Prime Minister if she will raise at the next meeting of the European Council the policy of the Council on the making of intergovernmental agreements to balance European Economic Community budgets under article 199 of the treaty in light of the determination by the Court of Auditors in its annual report for 1984; and if she will make a statement.
§ The Prime MinisterThe Government, in common with the Governments of the other member states, do not accept the Court of Auditors comments about the 1984 intergovernmental agreement. Article 4 of the 1970 own resources decision provided that the Community might finance expenditure from "other revenue" as well as from "own resources" revenue. The same provision has been repeated in article 1 of the own resources decision of 7 May 1985. It would seem therefore the reimbursable advances paid under the 1984 IGA could properly be regarded as "other revenue".