56/98
22 April 1998
STATEMENT ON THE 1998 COMMUNITY BUDGET EUROPEAN COMMUNITY FINANCES
The Government today published its Annual Statement on the Community Budget, entitled "European Community Finances". The Statement gives details of the 1998 Community Budget, including:
- total payment appropriations of 83,529 million ecu (55,693 million Pounds), 1.4% higher than 1997, and 1.14 % of Community GNP (well within the Own Resources ceiling of 1.26%);
- total commitments of 91,013 million ecu (60,683 million Pounds), 2.1% above 1997; and
- information about the UK's contributions to, and receipts from, the Community Budget.
Economic Secretary Helen Liddell announced publication in reply to a Parliamentary Question from Jackie Lawrence (Preseli Pembrokeshire). The full text of her reply is attached. Commenting on the announcement, Mrs Liddell said :
"The Statement provides a useful guide to the breakdown of expenditure and sources of revenue in the 1998 Community Budget, along with details of the UK's contributions to, and receipts from, the Budget.
"As the Statement shows, the very small overall increase in expenditure over 1997 demonstrates the Council's determination to apply the same budgetary rigour to the Community Budget as is being applied at Member State level. The UK is using its Presidency to seek to ensure a similarly rigorous approach during the 1999 Budget negotiations".
As in previous years, the Statement outlines the key developments in EC financial management and measures to counter fraud including:
- the European Court of Auditors' Annual Report for 1996 and Statement of Assurance, published on 18 November 1997;
- the Council's recommendation to the European Parliament on the discharge to be given to the Commission for its implementation of the 1996 budget. The recommendation, which the Council drew up under the UK Presidency, is based on the findings in the European Court of Auditors' Annual Report. The recommendation to grant discharge is accompanied by an in-depth commentary, which emphasises the need to learn lessons for the future from the Report and to focus not only on whether monies are properly accounted for, but on setting clear aims for expenditure and ensuring these are achieved as effectively as possible.
- details of progress on the major areas of work under the Commission's Sound and Efficient Management 2000 Programme.
NOTES FOR EDITORS
1. Copies of the annual report "European Community Finances" (Cm 3937) are available through HMSO or by telephone on 0207 873 9090, price 6.50 Pounds.
2. Glossary of terms:
Commitment and payment appropriations
The EC Budget distinguishes between appropriations for commitments and appropriations for payments. Commitment appropriations are the total cost of legal obligations which can be entered into during the current financial year for activities which will lead to payments in the current and future financial years. Payment appropriations are the amount of money which is available to be spent during the year arising from commitments in the Budgets for the current or preceding years. Unused payment appropriations may, in exceptional circumstances, be carried forward into the following year.
Own Resources
The Own Resources Decision lays down four sources of Community revenue, or "own resources" :
- Agricultural and sugar levies. Agricultural levies have been replaced by duties on agricultural products and commodities imported to the Community from non-member countries. Following the GATT Uruguay Round Agreement on agriculture, most agricultural levies are now fixed, although for some key commodities they continue to vary in line with world prices. Sugar levies are charged on the production of sugar to recover part of the cost of subsidising the export of surplus Community sugar onto the world market;
- Customs duties on imports from non-member countries;
- Contributions based on VAT. This is calculated by applying a notional rate of VAT to an identical range of goods and services in each Member State. Member States' contributions are, however, subject to a cap relating to the size of their Gross National Product.
- GNP-based contributions. The GNP resource is a budget-balancing resource and covers, basically, the difference between total expenditure in the budget and the revenue from the other three resources. The cost of financing this resource is distributed between the Member States in proportion to their GNP.
Sound and Efficient 2000 Programme (SEM2000)
The Commission's SEM 2000 Programme was launched in early 1995 and is aimed at instilling a better culture of resource management in the Commission's work. It covers a wide range of areas including own resources, budget forecasting and execution, and evaluation. The programme also deals with relations between the Commission and Member States, where improving management of Structural Funds expenditure has been a particular focus of attention.
3. Media copies of the annual report are available from the Treasury Press Office on 0207 270 5238.
4. Media enquiries about the report should be addressed to Charles Keseru, HMT Press Office, on 0207 270 5188.
Ms Jackie Lawrence (Preseli Pembrokeshire):
To ask Mr Chancellor of the Exchequer, when he will publish the Statement on the 1998 Community Budget, and if he will make a statement.
Helen Liddell
I have today laid before Parliament the Statement on the 1998 Community Budget, entitled "European Community Finances". This White Paper is the eighteenth in the series. As in the past, it 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 Community Budget for 1998 as adopted by the European Parliament, and the United Kingdom's gross and net contributions to the Community Budget between 1995 and 1998.
I have placed copies of the White Paper in both Libraries of the House.