European Standing Committee B
Wednesday 19 November 1997
[Mrs. Gwyneth Dunwoody in the Chair]
Draft Budget for 1998
[Relevant document: SEC (97) 1954 final, the Letter of Amendment No. 1 to the preliminary draft budget of the European Communities for 1998.]
10.30 am
The Chairman: I remind the Committee that today's procedure is different from normal. Although the Minister will make an opening statement, I am sure that she will make it brief, and we shall then have an hour of questions.
Mr. David Heathcoat-Amory (Wells): On a point of order, Mrs. Dunwoody. The documents available for this debate are voluminous but some are missing. That is serious. We cannot proceed without all the relevant information. Seven volumes of the European Union budget are referred to in volume 1. Volume 2 concerns the expenditure of the European Parliament, but it is not available for this morning's debate. The Parliament's expenditure comes out of tax revenues that come from, among others, the British taxpayer.
The report of the Select Committee on European Legislation refers to the document, but states in brackets that it is not available. I suggest that we cannot proceed if an important document is not available. To do so is a breach of treaty law. A protocol under the treaty of Amsterdam guarantees that national Parliaments shall have an enhanced scrutiny role and that necessary documents
``shall be promptly forwarded to national parliaments of the Member States.''
In view of the fact that that has not been done in the present case and that a document that is referred to is not provided, I suggest that we should adjourn until the information is available.
Mr. Jonathan Sayeed (Mid-Bedfordshire): Further to that point of order, Mrs. Dunwoody. The Committee is asked to take note of the European Community documents and to support the Government in maintaining budget discipline in the Community. I suggest that we cannot take note of a document that we do not have. We all know that there has been considerable corruption in the European Parliament. Unless we can examine its budget, which means we must look at that document, how can we take note?
The Economic Secretary to the Treasury (Mrs. Helen Liddell): Further to that point of order, Mrs. Dunwoody. The present discussion is an echo of a similar one that took place during our previous scrutiny debate in this Committee in July. The right hon. Member for Wells (Mr. Heathcoat-Amory) complains that volume 2 of the draft budget is missing from the documentation provided for the debate. Volume 2, which concerns the European Parliament's administrative expenses, is not published--so it cannot possibly be made available for this debate--because of agreement between the institutions that the Council of Ministers should not consider the budget of the European Parliament, which does not consider that of the Council of Ministers. It is bizarre, to say the least, that the right hon. Member for Wells, who, when he was in my position during his party's time in government, made the point that I am making, should have raised this point of order. It is not a valid point of order. He is just waffling to avoid dealing with the substantive issues.
Mr. Bill Rammell (Harlow): Further to the point of order, Mrs. Dunwoody. I am similarly astonished by the right hon. Gentleman's point of order. The Committee is having this unprecedented second debate because Opposition members on the Select Committee on European Legislation insisted that the matter be brought back for further consideration. In the light of that fact, is it credible or justifiable that the Opposition have not even tabled an amendment to make debate realistic and effective?
Mr. John Wilkinson (Ruislip and Northwood): The Committee will have noticed that the European Court of Auditors report was published yesterday and that extracts appeared in the press. Would it not be appropriate to adjourn until we can study that report? Press reports suggest that 5 per cent. of the previous year's budget was misappropriated, mis-spent and fraudulently applied. While these scandals are allowed to persist, should we not be able to reflect on the full recommendations rather than have to rely on bowdlerised extracts from the press?
The Chairman: Mr. Letwin?
Mr. Oliver Letwin (West Dorset): I was going to make exactly the same point as my hon. Friend.
Mr. Vernon Coaker (Gedling): The opportunity to question the Minister about the budget fraud reported in the newspapers is here right now. If Conservative Members stopped wasting time on points of order, which is what they did at the previous sitting and the one before that, we would all have more time to question the Minister.
The Chairman: I am always grateful to Members of Parliament for guidance. It is helpful to hear their views about how I should be running the Committee. The Committee is sitting on the basis of the documents that have been circulated. Luckily for me, it is not for the Chair to decide what should or should not be made available. I am sure that the Minister will have noted the views that have been expressed so far. We still have nearly an hour of questions so I suggest that we proceed.
I remind members of the Committee that questions must be brief and asked one at a time. I hope that speeches will be reserved for the second part of the Committee--otherwise the Chairman may have an odd word or two to say.
Mr. Heathcoat-Amory: I raised a point of order about a missing document and you have dealt with that, Mrs. Dunwoody. However, my question about the European Court of Auditors is more serious than either the hon. Member for Gedling (Mr. Coaker) or even my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) recognises. It has been trailed in the press and the Treasury may have a copy of the relevant document, but neither the Vote Office nor the Library--I have just checked--has a copy. I contacted the Treasury which said that the Court of Auditors report had been placed in the Library, yet five minutes ago I ascertained that the only documentation available was a press notice downloaded from the Internet.
The document exists and is relevant to our debate. The House has not been provided, still less the Committee, with a copy. Since this situation is a breach of the Treaty of Amsterdam, I ask you, Mrs. Dunwoody, to adjourn our proceedings until we have the necessary documents.
The Chairman: We have been called together to examine the documents before the Committee. The provision of individual documents is not a matter for the Chair. I suggest that we proceed.
10.37 am
The Economic Secretary to the Treasury (Mrs. Helen Liddell): As the Committee knows, I represented the United Kingdom at the Budget Council on 24 July. It was most successful from the United Kingdom's point of view. I agreed a reduction in provision for payments of 1.8 becu below the Commission's preliminary draft budget. That represents 1.13 per cent. of the Community's gross domestic product, compared with a limit of 1.26 per cent. set by the own resources decision. At only 0.7 per cent., the increase in payments over 1997 is well below the rate of inflation. I was also able to agree a reduction in the level of commitments by some 450 mecu from the Commission's proposals. That leaves a margin of 3.9 becu below the ceiling set by the financial perspectives.
I am pleased to say that in a context of considerable budgetary rigour I successfully argued for continued funding of 100 mecu a year for the European Union's peace programme for Ireland. I am sure that the House will welcome the recognition by our European partners of the importance of the peace programme in Ireland.
Members of the Committee will know that decisions of the Budget Council are strongly constrained by decisions taken in other Councils. For example, the key ingredients of the agriculture budget are set by the Agriculture Council when it decides how much aid to direct to farmers. The budget for structural funds flows, almost inevitably, from decisions that were made during the negotiation of the Community's current financial perspectives in Edinburgh in 1992. I do not belittle the role of the Budget Council, but I emphasise the achievement of reaching agreement.
The European Parliament's amendments are also the subject of debate. The European Parliament plays an important role in setting the budget. As in previous years, the amendments for which the Parliament voted on 23 October increased the overall budget. I believe that the European Parliament was wrong to do that. To do it justice, it did not go as far as on previous occasions. However, that is not the end of the process. I intend to maintain pressure on my Council colleagues at next week's Budget Council meeting to ensure that we achieve the best possible outcome for the 1998 budget.
I shall consider the revenue part of the budget, which means the gross contributions that member states make. That was the subject of lengthy debate at the scrutiny meeting in July. The negotiation of the annual EC budget deals with the spending side of the budget; we do not negotiate its revenue aspects.
Member states' contributions flow automatically from the formulae in existing Community law and mainly from the own resources decision, which dates from the Edinburgh agreement in 1992. United Kingdom contributions vary from year to year for technical reasons, which we discussed at the last scrutiny meeting. I have corresponded with hon. Members at length about that.
The European Parliament's draft budget, which I shall consider at the Budget Council next week, does not revise the revenue provisions in the earlier drafts of the budget because it deals with expenditure. However, on the basis of the draft budget, the United Kingdom's gross contribution would be broadly that which we discussed in July. There is an increase of approximately 3 per cent. in our sterling payments for the calendar year 1998.
The important issue for the United Kingdom's national budget is the net contribution in future financial years. The Government made it clear that we are sticking to our predecessors' public expenditure plans, which include trended estimates for the UK's net contributions to the EC.
We have no reason to suppose that the previous Government's estimates will be insufficient. That is not surprising given that the 1998 EC budget will probably be well below the limits to which the previous Government agreed at Edinburgh.
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