§ Mr. Teddy TaylorTo ask the Chancellor of the Exchequer if he will provide details of the amounts attributed to each of the factors mentioned in the Autumn Statement which resulted in his increasing by £510 million his January 1987 estimate of the 1987–88 United Kingdom net contribution to the European Economic Community; and if he will make a statement.
§ Mr. BrookeThe Autumn Statement projection of net payments to Community institutions represents an entirely new forecast of all elements in our contributions to and receipts from Community institutions. The main reasons for the increase in the projected outturn for 1987–88, compared with the estimate in the last public expenditure White Paper, include a shortfall in agricultural receipts of a little over £200 million, higher than expected payments of agricultural levies and customs duties (£86 million), the payment on 1 August of a VAT adjustment in respect of earlier years (£84 million), and a £140 million payment of customs duties and agricultural levies advanced from next April to next March (and hence from 1988–89 into 1987–88).
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§ Mr. Teddy TaylorTo ask the Chancellor of the Exchequer in what manner the value added tax base of EEC contributions by the United Kingdom, referred to in the Autumn Statement, was reassessed; if a comparable reassessment of the value added tax base of other member states was also made by the Commission; and by what amount the United Kingdom value added tax contributions were increased in consequence of this reassessment.
§ Mr. BrookeThe Government make forecasts of the VAT base in both the United Kingdom and the Community as a whole in order to project the United Kingdom's likely VAT payments and VAT share in future years. The forecast for the United Kingdom's VAT base used when preparing the Autumn Statement projection of net payments to Community institutions was revised upwards quite substantially (compared with that underlying the projection in the last public expenditure White Paper) to take account of the buoyancy of VAT receipts in 1986 and 1987, and the likely growth of consumers' expenditure in the United Kingdom. Only relatively small changes were made to the forecast of the Community's VAT base. The increases in our projected VAT payments before abatement compared with those assumed in the last public expenditure White Paper are £3 million in 1987–88, £74 million in 1988–89 and £266 million in 1989–90.
§ Mr. Teddy TaylorTo ask the Chancellor of the Exchequer why he has revised upwards in the Autumn Statement his January 1987 estimates of the net contribution to be made by the United Kingdom to the EEC in the years 1988–89 and 1989–90; and if he will make a statement.
§ Mr. BrookeThe main reason why the Autumn Statement projection of net payments to Community institutions in 1988–89 and 1989–90 is higher than that in the last public expenditure White Paper is that we have revised downwards our assumed share of agricultural receipts from 8½per cent. to 6½ per cent., reducing receipts by over £300 million in each of the two years. In addition, we have revised upwards the estimate of our VAT payments before abatement (by £74 million in 1988–89 and £266 million in 1989–90), as well as our likely payments of agricultural levies and customs duties in both years. The underlying deterioration in our net payments in 1989–90 is partly offset by an assumed increase in our Fontainebleau abatement of around £250 million.