Common Agricultural Policy

HC Deb 10 June 1982 vol 25 cc386-7

20. Mr. Jay

asked the Minister of Agriculture, Fisheries and Food what is expected to be the total cost of the common agricultural policy in 1982.

Mr. Peter Walker

Taking into account the latest revisions proposed by the Commission, the 1982 budget provisions for the common agricultural policy, as estimated by the Commission, are likely to be as to guarantee expenditure £6,898 million and as to guidance expenditure £409 million, making a total of £7,307 million.

Mr. Jay

Is that not a great deal of money and are there not many better ways in which it might be spent?

Mr. Walker

It is, but it covers the whole of agriculture in the EEC. To go over to the deficiency payments system in Britain alone would cost about £2 billion. I know that, with his considerable interest and anxiety on this subject, the right hon. Gentleman will be relieved to hear that in the past three years the budget has increased by only 26 per cent., whereas under the Labour Government it increased by 260 per cent.

Mr. Peter Mills

Will the Minister explain to the Labour Party that the CAP has many advantages? One is that the consumer has not gone short of any food over the past five or six years. Will the Minister also bear in mind that, while it may be slightly expensive, it has tremendous advantages for the whole of the rural scene?

Mr. Walker

Yes, Sir. It is also true that in the three years that the Conservative Government have been in power the price of food has increased less than the retail price index in general and has been very much to the forefront in the battle against inflation.

Mr. Ioan Evans

Is it not true that between 60 and 70 per cent. of the EEC budget goes on the CAP? Will the issue of the restoration of the veto be decided by a majority vote? Will we be allowed to use the veto or will the Government be treated with the same contempt that they were on the last occasion?

Mr. Walker

I gather from the last part of the hon. Gentleman's question that he has been absent for most of Question Time. I am sure that he will read with fascinated interest in Hansard tomorrow the replies already given to that question.

Mr. Farr

Does my right hon. Friend agree that, despite what he has said, the whole policy is in danger of becoming structurally unbalanced because of the rapid fall in the beef breeding herds in the past six years? As my right hon. Friend knows, they have declined by about 25 per cent., from 1.9 million cows per annum to 1.4 million. Will my right hon. Friend look at that matter?

Mr. Walker

My hon. Friend's point is of immense importance and that is why in this price-fixing we are pleased to have obtained substantial improvements in the beef premium scheme. As my hon. Friend also knows, the Government, as part of their policy, have substantially improved the hill subsidies for beef cattle. I hope that a combination of those factors will bring about the restoration of the fortunes of the beef industry that my hon. Friend rightly proposes.

Mr. Buchan

When the Minister gives us the appalling figure £7 billion as the CAP cost, does he realise that most of that is completely wasted money, in so far as it is used to create surpluses which then have to be exported onto the world market and depress it further? Is he not aware that 47 per cent. of that expenditure goes on export subsidies? Would it not be better if we had our own agricultural policy so that we could take advantage of cheaper world prices and use our money to develop British agriculture?

Mr. Walker

No, Sir. That is a myth, because the hon. Gentleman looks at world prices in isolation so that they do not reflect the impact that there would be on those world prices if European production were suddenly eliminated and one started to purchase the existing small surplus. That would produce an enormous rise in world prices. Plenty of illustrations in recent years show that that would be the case.

Mr. Marlow

Can my right hon. Friend tell the House the value of the net import of foodstuffs to Britain from the European Community? On average, how much is that above world prices at the moment?

Mr. Walker

No, Sir. However, my hon. Friend will be pleased to know that in the past three years of Common Market membership the balance of trade has improved by £1 billion as a result of Britain's food and agriculture performance.