HC Deb 23 January 1985 vol 71 cc978-80
37. Mr. Deakins

asked the Secretary of State for Foreign and Commonwealth Affairs if the Council of Foreign Ministers has approved the European Economic Community budget for 1985; and what proportion of the budget is to be spent on agriculture.

Mr. Rifkind

The draft European Community budget for 1985 was rejected by the European Parliament on 13 December. The exact proportion of the budget to be spent on agriculture is not, therefore, established.

Mr. Deakins

Will the hon. Gentleman accept that in the draft budget, although rejected by the European Assembly, the proportion to be spent on agriculture rose last year from 67 to 74 per cent., and that there has been a decline in real terms on the other programmes of major interest to Britain? What is there in the new mechanism of budget discipline that will prevent agriculture getting a larger and larger share of the Community budget in future?

Mr. Rifkind

The figure in the draft budget is 73 per cent., which is unacceptably high, although it is considerably lower than the average figure during the previous Labour Government, which I think was 76 per cent. With regard to the implications, I refer the lion. Gentleman to the agreement that has been reached, which binds the members of the Council of Ministers to ensure that any increase in agricultural expenditure is less than the growth in own resources. That is not a growth of 40 per cent., as the hon. Gentleman incorrectly suggested in the debate in the House yesterday.

Mr. Marlow

Is there likely to be a supplementary budget for 1985? If so, as the United Kingdom is the country that is most concerned and which works hardest for financial discipline, will he undertake to the House that we shall not be required to make a net contribution, as we did yesterday?

Mr. Rifkind

As my hon. Friend is well aware, the draft budget that was sent to the European Parliament did not reflect the likely commitments of the Community during the year in question, but did reflect the legal limit of the 1 per cent. ceiling. The precise way in which that particular problem is to be resolved has still to be agreed, but, as my hon. Friend the Economic Secretary said yesterday, we cannot rule out the possibility, or indeed the likelihood, of some form of supplementary finance being necessary.

Dr. M. S. Miller

What steps is the hon. Gentleman taking to protect British interests in relation to the accession of Spain and Portugal in connection with that matter? The British situation will worsen, as Spain and Portugal are likely to be net beneficiaries from the Common Market.

Mr. Rifkind

Certainly the whole reason why the negotiations with Spain and Portugal have lasted so long is that the Community as a whole, including the United Kingdom, has been determined to be cautious to ensure that the financial implications of enlargement are kept to a minimum. One of the United Kingdom's main objectives is to ensure that mistakes that were made in the past with regard to northern agriculture, which produced unacceptable surpluses, should not be made with regard to Mediterranean agriculture. That is a particular priority.

Mr. Dykes

Now that the system of financial control and husbandry in the Community is largely resolved, is it not rather sad and pathetic that some hon. Members should continue to grumble about the possibility of the United Kingdom paying an extra amount this year into the budget which would represent 0.7 per cent. of our GNP compared with the United Kingdom's existing budget deficit, which represents 2.25 per cent. of GNP?

Mr. Rifkind

My hon. Friend is right to put the matter in its proper perspective, but we must also insist that any increase in the resources of the Community is used for desirable areas of extra expenditure and does not contribute to the continuation of undesirable and unnecessary surpluses.

Mr. George Robertson

Is there not something bizarre and indefensible about a draft budget that will increase the proportion to be spent on agriculture from 67 to 73.7 per cent., which is closer to 74 than 73 per cent., at a time when over 14 million European Community citizens are out of work, and more than 25 per cent. of all young people in the Community are out of work, especially when that will be at the cost of programmes in industry, energy, transport, science and technology, which could make the best contribution to increasing the industrial viability of the European Community countries?

Mr. Rifkind

I entirely agree with the hon. Gentleman that the proportion of the budget represented by agriculture is unacceptably high. It is precisely for that reason that the United Kingdom has successfully insisted on a new formula that will ensure that agriculture will progressively represent a smaller and smaller share of the total Community budget.