HC Deb 04 June 1981 vol 5 cc1057-8
6. Mr. Marlow

asked the Chancellor of the Exchequer what is his estimate of the total cost of European Economic Community membership for 1981, including imports duties, agricultural levies, value added tax and the cost of net food imports from other Community countries over and above world market prices.

Mr. Lawson

The United Kingdom's net contribution to the 1981 Community budget, including import duties, agricultural levies and value added tax, is estimated to be about £500 million. As for the non-budgetary cost, I regret that the information is not yet available.

Mr. Marlow

When we are in negotiation with our partners in the Community over budget contributions, will my right hon. Friend give equal prominence in future to the massive cost, estimated at some £1,500 million, that our housewife has to bear to pay for continental foodstuffs at up to twice world market prices?

Mr. Lawson

I do not accept my hon. Friend's figure, but he is right that there is a non-budgetary cost which must be taken into account. However, the primary need is to build on the considerable success on the budget contribution achieved by my right hon. Friend the Prime Minister in the 30 May agreement last year. We must build on that, make it permanent and improve it in other ways, as was outlined in the important speech made by my right hon. and learned Friend the Chancellor at The Hague last night.

Mr. Arthur Lewis

Out of that £500 million, can the Minister estimate the amount which will be used to supply subsidised food for the Russians, paid for by British taxpayers, including the sick, the disabled and the unemployed, who all pay tax?

Mr. Lawson

I hope as little as possible, and, if possible, nothing.

Sir Anthony Meyer

Whatever may be the significance of the contribution to the Community budget of some 1 per cent. of public expenditure, is it nevertheless true that membership of the Community is of inestimable importance because of the market it offers to our exporters and still more exclusion from the market would be intensely damaging to British industry?

Mr. Lawson

I am sure that my hon. Friend is right that membership of the Community is of great importance to this country, politically and economically.

Mr. Straw

Does the Financial Secretary recognise that the Government have contributed to the rocketing costs of the Common Market by their surrender to a highly inflationary farm price settlement in April? Does he also recognise that the British people, since the Government took office, have increasingly voiced their opposition to entry to the Common Market and that the number of people expressing support for the Common Market in opinion polls has dropped by 80 per cent. since May 1979? In the negotiations for future financial contributions to the Common Market, will the Financial Secretary make it clear, as the Chancellor failed to do yesterday, that the British Government will veto any increase in the 1 per cent. Ceiling on VAT?

Mr. Lawson

The hon. Gentleman should know that our position is that there will be no increase in the 1 per cent. VAT ceiling and all our negotiations and discussions on the restructuring of the budget and other matters are within that firm context. It ill behoves the Opposition to talk about high Community farm price increases since we took office. The facts are that since the Government took office, farm price increases in the Common Market have averaged 5 per cent. per year, while under the Labour Government such increases averaged 7½ per cent. a year.