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European Community Budget

Volume 13: debated on Thursday 19 November 1981

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asked the Chancellor of the Exchequer what is the expected British net contribution to the budget of the European Economic Community for the six months ended 30 June 1981.

During the first six months of this year net payments to the Community budget by the United Kingdom amounted to £96 million. This net figure allows for gross refunds of £547 million paid under the agreement of 30 May 1980.

In view of this dramatic reduction in the size of the British contribution to the European budget, would not a period of seemly reticence be appropriate by those who have been bellyaching so loudly about the cost of belonging to the Community? As we are now in a position in a disinterested way to press more strongly our claim for a reform of the system of budgetary contributions, is it not possible to press simultaneously for a system based on ability to pay while recognising that there must be some element of Community financing and a common external tariff?

In all things economic, things go up and things go down. What we really need is a long-term, stable and fair solution to the problem of our contribution which will stand the test of time. In seeking that objective, it would not be right to base our plans on the unusual circumstances of the last few months when world prices have risen considerably towards Community prices in food markets.

The present arrangements run for 1980 and 1981. If the mandate discussions do not yield a solution to the long-term problem, the arrangements that apply to 1981 will be invoked for 1982.

Does my hon. Friend agree that it is time that we had a better six months bearing in mind that, since we joined the Common Market, our net payments have amounted to more than £3,000 million—more than £1 million a day? Does he also agree that the lower figure for the first six months includes rebates for last year when our net payment was £700 million—more than £2 million a day?

I cannot be held responsible for the years under a Labour Administration when the bulk of the £3 billion was incurred. They negotiated a financial mechanism with their Common Markets partners under which not one penny has so far been paid.

I welcome the hon. Gentleman to the Front Bench for the first time to answer questions. We hope that he will have an agreeable stay until he is dismissed by the people at the next general election. Does he not think that this curious question put down by his hon. Friend the Member for Flint, West (Sir A. Meyer) is not exactly well timed or helpful considering the negotiations at the Euro summit in London in a week's time?

Will the hon. Gentleman also enlarge on a matter of some seriousness? His right hon. and learned Friend, replying to me on 30 July, stated that his estimate of the United Kingdom's net contribution for this year was £571 million. Admittedly, the first half of the year is substantially below that level. Will the hon. Gentleman elaborate on what was hinted to be the reasons for the short-term change in expectations for the 1981 outturn?

I thank the right hon. Gentleman for his good wishes and reciprocate equally to him that he may have a long and fruitful stay where he now sits.

I consider the timing of my hon. Friend the Member for Flint, West (Sir A. Meyer) impeccable. These matters should be aired and discussed, and we welcome the opportunity.

It is impossible to forecast the results of the second half of 1981, because we have not yet reached the end of that year. It is impossible to make a comparison with earlier estimates, because there has been an unexpected change in the difference between world and Community prices. But it is likely that this year we shall have a much lower net contribution than was expected some time ago.