Notes
The deal which Britain is in the process of concluding with the other members of the EEC should lay to rest for ever the accusation that Mrs Thatcher is not Prepared to compromise. For the failure on Monday of EEC foreign ministers to agree the exact level of British budget contribu- tions ought not to obscure the fact that the .Principles of an agreement have already been settled. The other members have con- ceded that there must be a 'budget system', as the French like to call it, which will link each country's budget payments to its relative prosperity. A difference remains over whether Britain's first rebate under this system, which will determine future Payments, should be £600 million or £750 Million, but as Sir Geoffrey Howe said, that gap is bridgeable. In return the British Government has conceded that the 'own resources' of the EEC should increase by a quarter between now and 1988. The rate of VAT which the Community will be em- powered to levy on its members will rise from one per cent to 1.4 per cent, and after 1988, subject to national ratification, to 1.6 Per cent. This is a fairly astonishing conces- sion for a Government to make which believes in cutting, or at least holding steady, public expenditure. It is, however, the natural upshot of last week's infla- tionary farm settlement. Because the Com- mon Agricultural Policy has not been be under control, the budget cannot ue controlled. The big spenders have won, and we have lost the best chance we are ever likely to have of putting the Corn Inanity's finances on a firm footing.
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