HC Deb 26 July 1978 vol 954 cc1548-50
44. Mr. Peter Mills

asked the Secretary of State for Foreign and Commonwealth Affairs what changes will take place in the common agricultural policy as a result of the Bremen meeting.

Mr. Judd

The common agricultural policy was strongly criticised at Bremen because of its wasteful use of resources. The Commission was asked to report to the next European Council in December with proposals for remedial action. We are looking for decisions which will reduce costs in 1980 and subsequent years.

Mr. Mills

Would not the Minister agree that while a common agricultural policy—a policy for Common Market agriculture—sbould continue, it is the internal arrangements that are wrong and that, if we are to have any monetary adjustments or harmonisation in future, the condition of making that move must be that there are these internal changes in the CAP? Will the Government move towards that policy in their last few months of office?

Mr. Judd

When the Government resume office after the General Election, whenever that may be, we shall continue to have at the top of our priority list the fundamental reform of the CAP. As far as we are concerned, the best structural policy for the CAP is a firm price policy. What we want to do is to eliminate unnecessary structural surpluses, thereby getting a better equilibrium between supply and demand and looking to the interests of consumers throughout the Community.

Mr. Spearing

Does not my hon. Friend agree that, irrespective of their other effects, any results of the Bremen proposals to realign currencies or to prevent their disturbance could only strengthen the CAP? Therefore, would not such a result be against the policy of both sides of this House of reforming the CAP?

Mr. Judd

My right hon. Friends the Prime Minister, the Foreign Secretary and the Chancellor of the Exchequer have made it plain that in our approach to any monetary policies which may now be discussed we are determined to see two other priorities fulfilled. One is a real commitment in the Community—there is genuine movement in this direction now—to fundamental reform of the CAP on the lines that I have indicated. The second is generally greater economic convergence within the Community, because, if the disparities and injustices which at present exist within the Community continue or become aggravated, any mone- tary reform or reorganisation would knock us into disadvantage.

Mr. Scott-Hopkins

Does not the Minister agree that a firm price policy alone is not sufficient to reform the CAP but that there must be greater emphasis on the guidance and structural section? Unless that is done, it will be hopeless to try to stay firm on the firm prices policy alone. Will the hon. Gentleman point out to his German colleague that it is in Germany that the vast amount of the surpluses which are worrying the Community—the milk sector in particular—are being accumulated?

Mr. Judd

The hon. Gentleman, with his experience, has touched on several vital points. One of the things that cannot be emphasised too often is that, whatever our own level of economic activity in comparison with those of other members of the Community, we are the second largest net contributors to the Community. Therefore, we have a right to speak out on the abuse of funds, as we see it, going towards building up unnecessary and wasteful surpluses. But I repeat that in our view the best structural policy is a firm price policy within the CAP.

Mr. Weetch

Will my hon. Friend put on record whether it is the Government's view that, as far as the overall budget of the Community is concerned, we intend to press that the proportion of money used for agricultural support be reduced?

Mr. Judd

The position is clear. With over 70 per cent. of the Community budget now going into a CAP that is manifestly not an acceptable policy, the credibility of the Community and its budget is under severe test. We believe that if the credibility of the Community, and of its budget as a central part of its life, is to be restored, that trend has to be significantly reversed.