HC Deb 21 October 1987 vol 120 cc716-7
13. Mr. Baldry

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress made in efforts to contain the European Community budget.

13. Sir Geoffrey Howe

We have got agreement that CAP reform and budget discipline are the key issues in the current negotiations. Stabilisers, backed by an effective guideline for expenditure, have to be the main instrument of reform. Our task now is to translate that principle into hard practice—into the detailed agreement that is an absolute condition of success in the overall negotiation

Mr. Baldry

I thank my right hon. and learned Friend for that reply. Is it not a simple fact that the Community budget will not be controlled until the Community firmly controls farm costs, commodity by commodity, so as to limit spending? We all know what needs to be done. Is it not a question of whether the Community can now find the resolve to do it?

Sir Geoffrey Howe

My hon. Friend is absolutely right. Control of farm policy costs is absolutely essential for the achievement of effective budgetary discipline in the Community. We have achieved recognition of that principle. We have also achieved recognition by the Commission — and more widely — that stabilisers in respect of each commodity—commodity by commodity — are an essential means of bringing agricultural spending under effective control. What is now needed is the mobilisation of a common, collective will to put those principles firmly into practice.

Mr. Cryer

Since Britain's membership fee for the Common Market this year is £1.3 billion, will the Foreign Secretary assure the House that the Government will not increase their contribution to bail out the Common Market? Will the right hon. and learned Gentleman repudiate completely Commissioner Cockfield's proposal to increase and widen VAT to cover food and children's clothing? Will he make it clear that it is not acceptable to the House and that we shall use the veto?

Sir Geoffrey Howe

We have made it plain that any changes in Community own resources can be considered only in the context of a settlement that deals effectively and completely with the matters that we have already discussed this afternoon.

My right hon. Friend the Minister of State has already told the House that any change in taxation or tax measures within the Community requires unanimity. That is clearly established in the Single European Act. We shall continue to zero rate food and children's clothes and shoes—the items about which the hon. Gentleman asked.

Mr. Higgins

Did the House not agree to the last increases in Community resources on the clear assurances from the Government Front Bench that there would be effective budgetary discipline within the Community? Therefore, is not my right hon. and learned Friend's earlier statement this afternoon that we might have another increase to achieve that same objective very worrying?

Sir Geoffrey Howe

My right hon. Friend's interest in this subject is well justified and he is an effective reminder of the importance of the matter. He should take notice of the fact that, as a result of the agreement arrived at in 1984, the agricultural savings now arrived at total some £10 billion. We have now got measures in place controlling milk and beef—milk production is down by 4 per cent. and butter production down by 13 per cent.—and there has been a substantial cut in beef support prices. What is necessary — my right hon. Friend is entirely right to remind us of it—is to build on the foundations laid at Fontainebleau to ensure that comparable discipline applies to the rest of the agricultural programme.

Mr. Skinner

Is not the truth of the matter that if this Government, along with the others in the Common Market, decided to privatise the EEC there would be no buyers and they would not get a price?

Sir Geoffrey Howe

I believe that as the European Community is an enterprise on such a large scale, the question does not arise.

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