Select Committee on European Union Fortieth Report


UK ABATEMENT

Letter from Rt Hon Geoff Hoon MP, Minister for Europe, Foreign and Commonwealth Office to the Chairman

  Following my Evidence Session before the Committee on 13 July, I promised to respond in writing on the following question.

  Recent press reports have indicated that the Chancellor is raising questions over whether the UK should be required to contribute to the reductions in GNI and VAT resources to the Budget agreed by the December council meeting under the UK Presidency.

    (i)  What is the definitive Government position on whether the UK should be required to help finance these reductions in the contributions granted to other Member States?

    (ii)  Can you give us figures which will enable us to compare the expected contributions from the UK, France and Italy to the EU over the period of the next Financial Perspective?

  (i)  Discussions on the Own Resources Directive are on track. We are looking at the draft text carefully to make sure it properly reflects the December deal. We are confident that an agreement will be reached in good time to come into force in January 2009.

  The December deal specifically states that "the UK abatement shall remain". The only areas where the abatement is "disapplied" is in expenditure on economic development in the new Member States. The UK has always been a strong supporter of enlargement and accepts the additional financial burden that this places on the more wealthy Member States.

  (ii)  UK contributions will be published in the budget in the usual way. The Government does not generally publish forecasts of other Member States' contributions, which are a matter for the Member States in question. But we (and the Commission) expect that, expressed as a proportion of Gross National Income, the total net contributions over the period 2007-13 of the UK, France and Italy will be closely similar. In contrast, on the same basis over the period 1984-2004, the UK has paid on average nearly two and a half times as much as France and three and a half times as much as Italy.

20 July 2006



 
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