This is the fifth consecutive year that the Committee has scrutinised the EC Budget on the basis of oral evidence from the Government before the First Reading of the Preliminary Budget in the Council. Spending in the annual EC Budget is currently divided into eight categories: competitiveness for growth and employment; cohesion for growth and employment; preservation and management of natural resources; freedom, security and justice; citizenship; the EU as a global partner; administration; and, compensation. The report summarises the significant proposed changes to funding under each of these headings. Also included are an explanatory memorandum received from the Treasury, a transcript of oral evidence from the Economic Secretary, a brief guide to the annual European budget procedure, and a glossary.