EC (Advance Payments and Overdraft Facilities) (Hansard, 20 October 1988)

§ Mr. Brooke

In each of the three months August, September and October the Commission had cash flow problems because its spending obligations exceeded the revenue available under the 1988 budget. The Commission therefore requested member states, by reference to article 10(2) of regulation 2891/77, to advance by one month the payment of own resources other than VAT. The United Kingdom accordingly made advance payments from the Consolidated Fund on 22 August, 20 September and 20 October, under section 2(3) of the European Communities Act 1972.

In August and September the Commission also overdrew its accounts with member states, by reference to article 12(2) of Council regulation 2891/77. The overdraft with the United Kingdom currently totals £159.8 million. The Government have met this obligation from the Consolidated Fund, again in accordance with section 2(3) of the European Communities Act 1972. Overdrafts are unwound by corresponding reductions in subsequent own resources payments.

The table shows the level of advance payments made under article 10(2) in August, September and October; and the extent of the outstanding overdraft under article 12(2) at the end of each month.

989W

£ million
	August	September	October
Early payment of non-VAT own resources under article 10(2) (reimbursed in the following month)	163.8	145.8	140.4
End-month overdraft under article 12(2)	96.9	3.9	n/a

The total amount which the Community is authorised to spend in 1988 remains as set out in the 1988 budget and supplementary budget. There is, therefore, no net addition to public expenditure arising from the Commission's use of these advance payment and overdraft facilities.

The Community's cash flow difficulties in 1988 should be resolved when member states are in a position to make available their contributions under the intergovernmental agreement on the financing of the 1988 budget.