§ 49. Mr. Russell Johnstonasked the Secretary of State for Foreign and Commonwealth Affairs what approximate proportion of the regional and social funds of the European Community he expects will be allocated to Portugal after her entry into the Community.
§ Mr. HurdIt has been agreed in the accession negotiations that Portugal should join in the European regional development fund from accession, but the Community has yet to consider the question of its quota. It is not yet possible to provide even an approximate indication of what that will be. It is also difficult to make any estimate about the Portuguese share in the social fund.
§ Mr. JohnstonBearing in mind the great poverty in Portugal, is it not correct that, unless the budget is extended, nothing meaningful will be achieved through the regional and social fund to help the Portuguese? If the Government succeed in getting the financing aspect correct, why would they oppose the budget being subsequently increased?
§ Mr. HurdNone of the proposals that have been put forward provide an effective method of stemming the flow of resources into the agricultural sector, which the Government consider to be too great. Until that basic problem is courageously tackled the Government consider that the approach is bound to be defective.
§ Mr. MarlowDoes my right hon. Friend agree that, whatever the effects of the entry of Portugal on the regional and social fund, a simple and important question must be answered, namely, that however much that would cost, we in this country will never agree to an increase in the 1 per cent. VAT?
§ Mr. HurdThe Government do not believe that a case has been made out for an increase in the 1 per cent. VAT. The Government are still studying the Commission's proposals, which contain some new and interesting ideas. My right hon. Friend will propose a modulated VAT that rests to some extent on agriculture, and which the Government would see as a measure that took the place of part of the present VAT position.