§ Sir Michael ShawTo ask the Chancellor of the Exchequer if he will outline the arrangements which will apply in respect of the European Community revenue and expenditure under the provisional twelfths budgetary regime.
§ Mr. BrookeIn the absence of an agreed budget for 1988, the Community has, since 1 January, been operating under a provisional twelfths budgetary regime in accordance with article 204 of the treaty.
This means that expenditure in each month is limited to one-twelfth of the total appropriations available, chapter by chapter, in the previous year's budget, or the Council's draft budget, or, in the absence of a draft budget—as is currently the case—the preliminary draft budget, whichever is lower. The Council may, acting by qualified majority, authorise expenditure of additional funds, provided that the 12-month totals are not exceeded.
As regards revenue, traditional own resources — agricultural levies and customs duties—are paid to the Community in the normal way. But member states' VAT contributions are limited to the amounts paid under the previous year's budget. In accordance with this, the United Kingdom's monthly VAT payment, after abatement, is 259 million ecu. The corresponding sterling figure for this month's payment, made on 4 January was £179.05 million.