H.M. TREASURY NEWS RELEASE

HM Treasury News Release

121/99

16 July 1999

'EU BUDGET SAVINGS MEAN GOOD NEWS FOR THE TAXPAYER' - HEWITT

Taxpayers stand to benefit from savings agreed in the European Union's draft budget for 2000, Economic Secretary to the Treasury, Patricia Hewitt, said today.

EU Finance Ministers meeting to establish the draft EU budget for 2000 agreed to reduce commitments by 4.7 per cent on the 1999 budget and increase payments by 2.8 per cent.

Welcoming the decision, Patricia Hewitt, said:

"Today's decision is good news for the UK taxpayer and good news for the EU as a whole - it sends a clear signal that the EU takes budget discipline seriously.

"We have long argued that European expenditure must not be exempt from the same rigorous approach we apply to national expenditure. That's why we are pleased that the EU is demonstrating that when it sets spending plans it keeps to them. This is critical if we are to build on the discipline we have inserted in the budget in recent years and in the new financial perspective agreed at Berlin."

NOTES FOR EDITORS

1. Overall commitments in the draft budget are 92.4 billion euros, 4.7 per cent below the 1999 level and well below the financial perspectives agreed at Berlin. Payments are fixed at 87.9 billion euros, higher than in 1999 (reflecting the weight of past commitments) but still significantly lower than both the level proposed by the Commission and the own resources ceiling.

2. The draft budget will now be forwarded to the European Parliament for its first reading in October, before returning to the Council in November for the second reading. The budget is finally adopted at the Parliament's second reading in December.