Select Committee on European Union Fortieth Report

EC BUDGET 2006 (continued)

Letter from Ivan Lewis MP to the Chairman

  Preliminary Draft Amending Budget No 2 to the 2006 EC Budget (PDAB 02/2006) returns a surplus of €2.4 billion from the 2005 EC Budget to Member States. My Explanatory Memorandum (EM) of 19 April set out the detail and noted that it was regrettably not possible to take account of the Committees' views in advance of the Council vote. This was due to the Austrian Presidency's attempt to return the surplus as soon as possible.

  The Presidency intends to secure Council approval before the European Parliament (EP) mini-plenary on 26-27 April. If the EP approves PDAB 02/2006 at the plenary, the surplus can be returned to Member States up to one month sooner than expected. This would be good news. The interest payable on the UK share is £35,000 per day, so early repayment would save the UK taxpayer up to £1.1 million.

  Unfortunately, to give the Presidency the best chance of securing this windfall, the Government must agree to a written procedure (decided unanimously) and also vote in favour of PDAB 02/2006 before domestic Parliamentary scrutiny can be completed. I regret that this is necessary but, given that the return of the surplus is routine, hope that the Committees will understand my reasons for doing so.

  Of course I look forward to hearing the Committees' views on the surplus, and hope you will support the Government's continued efforts to reduce future budget surpluses by encouraging better forecasts.

25 April 2006

Letter from Ed Balls MP, Economic Secretary, HM Treasury to the Chairman

  I have pleasure in enclosing the Government's Annual White Paper on the EC Budget—European Community Finances: Statement on the 2006 EC Budget and measures to counter fraud and financial mismanagement (not printed).

  This is the 26th Annual White Paper in the series. This year's report covers annual budgetary matters and includes details of recent developments in European Community financial management and in countering fraud against the Community Budget. It also describes the EC Budget for 2006 as adopted by the European Parliament, and details the United Kingdom's gross and net contributions to the EC Budget for calendar years 2000 to 2006 and financial years 2000-01 to 2007-08.

  I hope that you will find this report interesting and useful.

18 May 2006

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