§ Mr. WoodTo ask the Chancellor of the Exchequer if he will make a statement about the European commission's latest cash position and the implications for the United Kingdom.
§ Mr. BrookeThe European Commission estimates that its spending obligations this month will exceed the own resources available in July under the adopted budget for 1988. The Commission has therefore informed us that it expects to have to overdraw its accounts with member states this month in accordance with article 12(2) of Council regulation 2891/77. The outstanding amount of the overdraft for the United Kingdom by the end of July is expected to be around £136 million. As I explained to the House on 19 May, at column 1151, the Government are obliged to meet an article 12(2) request provided that it is genuinely needed to cover a prospective cash deficit and that it would not involve exceeding the own resources known to be available for the year. The Government will therefore meet this request directly from the Consolidated Fund in accordance with section 2(3) of the European 473W Communities Act 1972. Repayment of any drawing under this facility will be made by deduction from future own resources payments.
The article 12(2) facility does not affect the total amount which the Community is authorised to spend during the year. The Commission's request does not, therefore, involve any net addition to public expenditure.