EC Budget (Hansard, 23 November 1994)

§ Mr. Kenneth Clarke

The information in the accompanying table reflects the latest forecast and is consistent with the information which I will publish in next week's Financial Statement and Budget Report.

The pattern of our net contributions to the EC budget is obscured by considerable fluctuations from one year to the next. These are caused by adjustments to our payments in previous years as later information become available, differences in the level and timing of receipts, and movements in the size of our abatement. These effects, are increased because we use a different financial year from the Community. Our estimate of the underlying level of the net contribution—that is, what we think the net contribution is when the various irregularities are stripped out—is as follows:

Estimate of underlying public sector net contribution to the EC Budget
	£million
1988	1,500
1989	1,700
1990	1,900
1991	2,100
1992	2,200
1993	2,400
1994	2,500
1995	2,700
1996	3,100
1997	3,300
1998	3,500
1999	3,550

Of the increase of £850 million between 1995 and 1999, some £600 million results from the effects of Community gross national product and inflation within the present own resources ceiling which is set at 1.20 per cent. of Community GNP. The remaining £250 million is a consequence of the agreement at the Edinburgh European Council to increase the own resources ceiling from 1.20 per cent. to 1.27 per cent. by 1999.

These figures look large because they are presented in cash terms, for consistency with the rest of our public expenditure arithmetic. But the real scale of the Edinburgh settlement can be seen in the fact that it increased the own resources ceiling over seven years by 7/10,000ths of Community gross national product.

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United Kingdom Contributions to and Receipts from the European Community Budget
Cash Plans	£ millions
	1989–90 outturn	1990–91 outturn	1991–92 outturn	1992–93 outturn	1993–94 estimated outturn	1994–95 plans	1995–96 plans	1996–97 plans	1997–98 plans
Net public sector contributions to the European Community budget	2,452	2,18	943	2,167	2,192	2,446	3,394	3,361	3,282

For domestic public expenditure planning purposes, part of the United Kingdom's contribution to the Community budget is attributed to the overseas aid programme. The net contribution to the EC budget when adjusted for this element, our payments to the European Investment, bank and our receipts from the European Coal and Steel Community form the United Kingdom's net payments to EC institutions, the latest estimates for which are: 1994–95 £2,043 million, 1995–96 £2,821 million, 1996–97 £2,765 million and 1997–98 £2,639 million.

United Kingdom Contributions to and Receipts from the European Community Budget
Cash Plans	£ millions
	1989–90 outturn	1990–91 outturn	1991–92 outturn	1992–93 outturn	1993–94 estimated outturn	1994–95 plans	1995–96 plans	1996–97 plans	1997–98 plans
Gross payments	5,804	6,411	6,129	6,970	8,407	8,308	9,943	9,910	10,552
Public sector receipts	-2,035	-2,388	-2,757	-2,810	-3,864	-3,963	-4,293	-4,441	-4,526
United Kingdom abatement	-1,317	-1,838	-2,428	-1,993	-2,350	-1,899	-2,256	-2,108	-2,744