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Ec Budget

Volume 82: debated on Monday 8 July 1985

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asked the Chancellor of the Exchequer further to his reply dated 14 May, Official Report, columns 84–5, concerning the maximum level of spending under the European Economic Community budget on agriculture, whether he will publish in the Official Report (i) the percentage of the total budget represented by the figure of 20·65 billion ecu, (ii) the comparable figures for 1984 and 1985, (iii) the increase in the own resources base used in the calculation and (iv) an explanation of what is meant by a comparable basis and how this affects the calculation.

The Commission has now revised its estimate of the financial guideline for 1986 down from 20·650 billion ecu to 20·619 billion ecu. This figure is a ceiling and the Commission has proposed in its key figures for the preliminary draft budget for 1986 expenditure on FEOGA guarantee of 20·442 billion ecu excluding the costs of enlargement. This represents 64 per cent. of its proposal for total expenditure in a Community of ten. This proportion may be different in the adopted budget for 1986 depending on decisions taken by the Council and European Parliament during the budgetary procedure. The equivalent proportions in the budgets for 1984 and 1985 were 67 per cent. and 70 per cent. respectively. However, the proportion for 1984 is not strictly comparable with those for 1985 and 1986 because of the different treatment of the United Kingdom's rebates which in 1984 were on the expenditure side.The guideline figure for 1986 is based on an estimate that the own resources base will grow by 10·85 per cent. between the average of 1984 and 1985 and 1986. Article 2 of the budget discipline conclusions requires calculations to be made on a comparable basis in order to avoid the operation of the guideline being distorted by such things as a change in the definition of agricultural expenditure or the proposed increase in the VAT ceiling from 1 per cent. to 1·4 per cent. This requirement ensures that the financial guideline grows at no more than the rate of growth of a consistently defined own resources base.