Unfortunately I did not hear all of the Minister's contribution. He had the advantage of hearing all of mine——
European Communities (Supplementary Funding) Bill, 1984: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
This is the second time that happened.
I appreciate that bit. I was at a parliamentary party meeting. Obviously none of the Deputies opposite was interested in contributing to the debate.
They leave it to me.
Of course. Everything is left to the Minister. Will he tell us how much of the funds of the budget of the EC in 1984 is taken up in providing for the British rebate to which I paid some attention? I do not know if the Minister in his reply referred to the difficulties that the EC have experienced in the past few years and also at the moment because of the British position. Perhaps he does not want to talk about it. Perhaps he feels in the light of this special relationship we are trying to develop with Britain that it is not appropriate that we should say anything that might offend. Nevertheless, will he tell us how much of the funds in 1984 and the projected funds for 1985 will go towards meeting the British rebate?
The net figure payable as a rebate to the UK in 1984 is 750 million ECUs which would be roughly £500 million.
That figure is the vast bulk of the amount we are being asked to pass to supplement the Community resources for 1984, namely, £700 million. It must be recorded that that remains the major problem and issue of the EC in relation to the budget. While we will not be the country that will squeeze any section of the Community for the resources that are required, the fact is this issue would not arise now were it not for the disposition of the British budget. The Minister does not need to comment. I do not know how much he has said on the British question in his reply, but that is the view of this side of the House.
During Deputy O'Kennedy's absence I said that I did not intend to go in detail into fighting past battles on this issue. As far as the principles of the matter are concerned, in terms of the argument that Deputy O'Kennedy is making on the matter of a refund, if anything I would be ahead of the posse. There is an issue of principle there which seems inconsistent with the spirit of the Treaty. However much we may dislike it, whatever our position may be on the substance of the principle, an agreement has been made which has been endorsed by the Community as a whole, and that provides part of the framework within which we now have to operate and which leads to a situation where we have to provide for a supplementary budget in the Community this year. Apart from the niceties of debating the principle of that issue, the Deputy knows that he and I would be in rather more agreement than would appear from our exchanges this morning.
In view of what the Minister has said in relation to that, it is important to note in this issue as to whether what Britain claims to be a rebate is Community resources of Britain's contribution, it is time the matter was resolved at Community level. I hope that the Minister in his capacity as President of the Council will bring this issue constantly before the Council, because as long as it is left in the manner in which it is we are all committed to refunding Britain contributions which she did not make.
With respect to Deputy O'Kennedy, the issue is settled. The procedure which applies as from next year is that the refund to the UK by decision of the Council will be equal to 66 per cent of the difference between its contribution based on its VAT share and its GDP share.
Is it agreed that section 2 stand part of the Bill?
On section 2, in relation to next year, 1985, this is the most serious reservation we have on this side of the House. However the situation in 1984 came about, we recognise that we must accept the situation in which we find ourselves. In regard to 1985, is it a fact that the Commission in respect of which I understood him to say in misrepresenting me had no authority on the budget——
I did not say that.
That is all I was saying about the Commission. The Commission proposed for 1985 a budget which would be something of the order of £21 billion. This proposal is in line with what Parliament recommend for 1985. The Budget Committee of the Parliament have indicated already that they are recommending an increase of £2,348 million over a figure agreed by the Council so far. The position now in relation to 1985 is that the Commission in their proposals, which are emerging already, are talking of a figure of that order of about £21 billion, and Parliament are recommending an increase over the figure mentioned by the Council of Ministers over which the Minister presides of the order of £2,348 million. Would the Minister not acknowledge that in these circumstances this kind of agreement, in respect of which we are now being asked to endorse a further ad hoc arrangement in the event of failure to lift the resources he hopes will be achieved in 1985, will weaken his hand? If the Minister hopes that the 1 per cent limit will be lifted for 1985 — as is not yet agreed; the only agreement is in respect of 1986 — can he not see that by virtue of having the endorsement of this House and the other Parliament already to provide for an ad hoc arrangement in 1985 which would come into effect only if the 1 per cent limit is not increased, he is already conceding — I am not saying capitulating — the argument? The member states who are opposed to an increase in the resources in 1985 can now say, “Yes, but we already have agreement not just at Council level but in the various parliaments that in the event that we do not increase resources in 1985 we can go ahead on this ad hoc arrangement. After all, it is endorsed by your own Parliament and by the Danish Parliament”— if that will be the case. I will be very interested to hear the debate of the Danish Parliament on this matter.
In so far as the figures now mentioned by the Council for 1985 are of the order of £2,348 million below what Parliament are suggesting — and they are part of the budgetary authority — this will weaken his hand. The Minister will be aware of what I said this morning, that even Commissioner Tugendhat said that the amount suggested by the Minister under our Presidency — we cannot do just as we would wish but it is under our Presidency — is unrealistic. It does not represent the real needs of the budget for next year. The Minister is asking us to ignore what two institutions have to say: the Commission, who I insist introduced the budget — and I presume the Minister will agree with that now — and Parliament who have a role in this budgetary authority. In the event that the Council, who have been the stumbling block in the increase of resources, do not agree, the Minister wants the sanction of this House to strengthen his hand in the negotiations. I cannot see how it does that. What about the extent of the rebate for Britain for 1985? I think it will turn out to be a considerable amount of money, perhaps of the order of £1 billion. Are we just going to concede that argument also? I would like the Minister to indicate how, in the face of Parliament and the Commission and their publicly expressed views on this, the giving of this ad hoc extension for next year against the possibility that there will be an increase in resources will strengthen his hand in bringing about an increase in resources, which is in line with the Treaty's Community obligations. By contrast these proposals are not at all based on the Treaty as the Minister has said but just an ad hoc arrangement.
The UK refund payable in 1985 would be approximately 1,000 million ECUs which is in the region of £730 million.
Is that £s sterling?
It is punts. Here references to £s may be construed as references to punts, when we are speaking as Béarla at least. On the more general question raised by Deputy O'Kennedy, if a budget were to be produced for 1985 that remained within the limit of total own resources on the basis of the 1 per cent VAT ceiling and the other elements of own resources that come in, it is clear that it would be inadequate to cover the levels of expenditure foreseen from present policies. The budgetary authority of the Community cannot adopt a budget that provides for expenditure which exceeds the total amount of own resources available to the Community and I am sure Deputy O'Kennedy is aware of that. Whatever the wishes or desires of the Council might be, particularly whatever the Parliament's wishes or desires might be, neither one of them is in a position legally to be able to conclude the whole budget process with a budget that calls for expenditure greater than the total amount of revenue available. That fact, and the inadequacy of the total amount of funding available, are recognised by the Council. It is for that reason that the Council have agreed that we will have a further mechanism in 1985, the nature of which is so far unspecified, in order to cover the difference between what is obviously required and what is there under the 1 per cent VAT ceiling. We will be approaching that discussion over the coming months.
I have no difficulty at all, for very obvious reasons, in disclosing my hand or my basic position in going into those discussions. My belief is that the sensible thing to do is to bring the increase in the own resources VAT ceiling into operation earlier than the beginning of 1986. The Government have already made it clear to our partners in the Community that that is the case. In the course of that discussion, if the Oireachtas passes this Bill, I will be able to say to my colleagues that we are going to need another arrangement. I have already provided the main provision to be able to cover the kind of arrangement that is being made in 1984. I do not think that arrangement is adequate and I believe that what we should do is to increase the VAT ceiling with effect from 1985. Nobody can reproach me in the negotiations with not having made it very clear that the Irish Government are prepared to make available the extra funding requirement. There is no ambiguity in our position there. Were we to be asked about the seriousness of our intent in that regard we could say that we have passed the Bill in our Oireachtas that provides specifically for this. There could be no doubt about our seriousness, our intent or willingness to make whatever is the appropriate contribution for Ireland. We start off then from a strong position and from that point of view I contend that section 2 as it is strengthens my position in those discussions rather than anything else.
The Minister will be the person involved in the negotiations and there is a precedent, one that I am anxious to adhere to, that those charged with the negotiations for the time being will have the full support of the House in terms of the common purpose we want to achieve. I do not wish to say anything that will in any way undermine the Minister's position in the negotiations and anything I said was not an effort to do that. We have to repose trust and confidence in the Minister who is negotiating, in this instance particularly, in so far as he is President of the Council. However, I cannot see the validity of the case he makes.
The Minister pointed out that it is not possible to adopt a budget in excess of the budget that applies. That is understandable, but the institutions who have the authority to extend the budget by a reference to the increase of own resources to 1.4 per cent in 1985 are the people who can extend the budget. They have the authority on the basis of a proposal from the Commission, after consultation with Parliament, to introduce the increase in own resources this coming year. Obviously, an increased budget is required. There is common case here. There is no doubt that they will require much more than is already written into the budget for 1985. The people who have the authority to extend the scope of the contributions to the budget under the Treaties, the Council and Parliament are, after considering the Commission's proposals, entitled to say: "Sorry, if we increase the budget now we are acting outside the Treaties because the budget as defined at the moment does not make provision for a sum of that kind". They are the people who can ensure that it does. Therefore, it is not reasonable to suggest that they would be acting ultra vires when, in fact, the authority lies with them to implement the increase in own resources for next year. Then the new proposals for the necessary funds of the order of the figures mentioned by Parliament, an increase of something like £2 billion over this year's budget, would be entirely in line with the budget.
It is not on to say that somebody may say that if they did this they would be acting illegally when it is entirely within their own competence to ensure that it would be entirely legal. I cannot see how the Minister concluded that his hand is strengthened in his hope, expectation, assertion or whatever, that the own resources ceiling will be lifted for next year. I cannot see how when he goes back to his colleagues as President of the Council to press for this, not just because Ireland says so but because it is in line with the European needs and policies, that his hand is strengthened by virtue of the fact that he can say that his Parliament agree with him and, just in case they do not increase resources, this Parliament had reposed so much trust in all of them that they had agreed to a continuation of this ad hoc mechanism next year. I cannot see honestly how, by any standard of logic or persuasion, that strengthens the Minister's hand. I would have thought it would do the opposite.
Were I a British minister on that occasion when the heat comes on I would say "This is a difficult question that we have been dealing with over the last five years and we must not create problems or give rise to tensions but for the time being have you not authority, not just as President of the Council but as a representative of Ireland, from your Parliament to continue with the ad hoc arrangements for next year? Therefore, for this year only it does not pose a problem for you and why should you press this to a limit that will give rise to tensions and problems?”
I do not know if the other parliaments will be adopting the proposal in the same terms as the Minister has put before us in respect of 1985; 1984 I understand, but 1985 I am not sure of. I do not know if the British, the Danes, the French and the Germans are asking their parliaments to sanction similar legislation. If they are it is a heaven sent response to any government that wants to oppose the increase in resources. Any government can say in that event "The mechanism is there. Let us carry on on an ad hoc basis for another year.” Unfortunately, that is the way Europe has been going on for the last four or five years. If the Minister says that strengthens his hand then we would have a different approach to tactics and strategy in Council negotiations.
Deputy O'Kennedy may think that we might have a different approach in tactics and strategy but we will not know that because it is a hypothetical question. I am bound to say that the Deputy has picked the wrong example in putting words into the mouth in this hypothetical discussion of a hypothetical British minister. As I stated earlier, the UK are rather anxious to have the contribution limit raised. That being said, I must say that in making the argument to the Council certainly I would not do it in the manner Deputy O'Kennedy has suggested we might. There is an element here of, "It ain't what you say, it is the way that you say it." That is important. I would not approach it on the kind of basis that Deputy O'Kennedy is advocating.
It is all right for the Minister to say that but I did not indicate how I would say it. What I am saying is that what we are now sanctioning here — no matter what the Minister says or how he says it — will weaken his hand. It does not matter whether it is a British or a German minister; that does not matter. By virtue of the fact that we are now giving the Oireachtas authority to expend extra moneys on an ad hoc arrangement for 1985 in my view — and it might be contended that I have some experience of the European scene as a Council Minister and otherwise — will undermine the Minister's position in trying to achieve an increase in the “own resources” ceiling for 1985. We shall await the outcome.
Question put and agreed to.
Section 3 agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.
This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.