§ Mr. Teddy Taylor
asked the Chancellor of the Exchequer on how many occasions prior to February 1987 the European Economic Community Commission has demanded to overdraw on the account of member states under article 12(2) of Regulation 2891/77; if he will make a statement on the operation of the sub-article; and whether there is any restriction on the amount of such overdraft facilities which can be demanded from the accounts of member states.
§ Mr. Brooke
[pursuant to his reply, 5 March 1987, c. 645]: Article 12(2) of Council Regulation 2891/77 of 19 December 1977 empowers the Commission, in certain circumstances, to draw in excess of the total assets in its accounts in member states. The payments are an obligation to be met by a direct charge on the Consolidated Fund under section 2(3) of the European Communities Act 1972. The facility can be used only to meet legitimate expenditure commitments up to the limit of available own resources in the budget, or within the limits of the provisional twelfths regime. In practice the Commission only draws at any one time sufficient to meet its immediate cash needs. Repayment is achieved by deduction of the outstanding amount of the overdraft from the next available own resources payment into the Commission's accounts. The overdraft payment made in February this year was recovered from the VAT contribution paid on 2 March.
The United Kingdom first made payments to the EEC Commission under the provisions of article 12 during February 1985. My right hon. Friend the Economic Secretary notified the House of the Commission's request at the time in his reply to the hon. Member for Corby (Mr. Powell) on 25 February 1985, columns 58). Between 25 February and 29 April 1985 the Commission drew in excess of the total assets in its United Kingdom account on eleven separate occasions. The Commission did not make any further use of this facility between April 1985 and February 1987.