§ Q1 Mr. Ridley
asked the Prime Minister (1) what estimate he has made of the cost to Great Britain's balance of payments of full membership of the European Economic Community as a result of their agricultural policy;
§ (2) what estimate he has made of the increase in the price of food likely as a result of the United Kingdom joining the Common Market.
§ The Prime Minister (Mr. Harold Wilson)
Any estimate must be uncertain because of the difficulty of foreseeing future world market conditions for foodstuffs and of forecasting the Community arrangements which might be in force after United Kingdom entry into the Community. The best estimates we can make at present, however, on the basis of present Community arrangements and prices and present world prices, suggest that, after any transitional period, the adverse effect on the United Kingdom balance of payments might be of the order of £175 to £250 million and on retail food prices of 10 to 14 per cent. which represents about 2½to 3½r cent, on the cost of living.
§ Mr. Ridley
Is the Prime Minister aware that if he carries out a successful negotiation, it might well be very much less than the figure he has mentioned? Is he aware that his repeated statements about hundreds of millions of £s are just exaggerating the situation? Is he aware that the increase of about £400 million in the price of food is nothing compared with the increase in the price of food under his Government, which amounted to £423 million in the first 18 months after he came to power? Will he stop misleading the House on this question?
§ The Prime Minister
I gave the hon. Gentleman our best estimate of this, as he asked. I told him that any estimate must be uncertain, because many people 1531 expect not only downward changes in Common Market prices, but upward changes in world prices, which would narrow the gap and therefore narrow the effect on our balance of payments and also the cost-of-living figure. But these are the best figures available on the basis of present information without speculating too much about the future.
As for food prices resulting from Government policy, I remember the very strong pressure from right hon. Gentlemen opposite in the debate on the censure Motion on the Agricultural Price Review in 1965 to increase food prices. In fact, since then, in the past three or four months, food prices in this country have been falling—[HON. MEMBERS: "No."]—food prices in this country have been falling according to the official retail price index.
§ Mr. Sydney Silverman
Can my right hon. Friend say what consideration he has been able to give to the question of what effect a rise in food prices in this country resulting from our becoming a member of the European Economic Community might have upon the Government's wages policy generally?
§ The Prime Minister
That is obviously one of the problems, and we all recognise that there are problems, but on the wider issue I ask my hon. Friend to wait until I answer a later Question.
§ Q4. Mr. Fisher
asked the Prime Minister whether he will make a further statement about Her Majesty's Government's proposals for Great Britain to join the European Economic Community.