§ 2.54 p.m.
§ Viscount TRENCHARDMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government where, after deducting the monetary compensatory amount food import subsidies, the United Kingdom ranked in order of net contribution per capita to the cost of the Common Agricultural Policy in 1978.
Lord WALLACE of COSLANYMy Lords, information for 1978 is not yet 1415 available, but for 1977 we would rank as a small net recipient under the Common Agricultural Policy if the monetary compensatory amounts paid on our imports from other member States were regarded as our receipts. However, the Government consider that these amounts should properly be regarded as the receipts of the exporting countries in which they were paid out, and on that basis we were the second largest net contributor per head to the cost of the CAP.
§ Viscount TRENCHARDMy Lords, I thank the noble Lord for that Answer. In view of that Answer, can he say whether statements about the cost of the EEC to this country which are being made in the Press and occasionally in Government circles are not greatly exaggerated? Even allowing that estimates suggest that in 1978 there might be a net deficit after MCAs—which I believe are receipts to the importer and therefore of direct benefit in paying for cheaper imports of food into this country—of around £200 million, does the noble Lord not agree that that is a vastly lower cost than the cost of deficiency payments if they were revalued at 1977 prices, based on the last year of that scheme, which—and I hope he can confirm this—would have been over £1,000 million?
Lord WALLACE of COSLANYMy Lords, I shall be as brief as I can. I cannot agree with the noble Viscount. The main reason the Government are concerned—and naturally they are concerned on behalf of the Britsh people, particularly the housewives and others—is not merely because of the outflow of funds through the EEC budget on account of the Common Agricultural Policy, but because of its total economic cost. That cost comprises a net budgetary contribution plus the balance of payments cost of importing food from other member States at CAP determined prices—that is, compared with the world prices at which we could import if the CAP did not exist.
Even after allowing for the MCAs—which are the monetary compensation amounts—these import prices are well above world prices. Therefore, the extra cost of imports in 1977 was something over £200 million. Our contribution through the budget, therefore, understates the full cost of the CAP by that 1416 amount. That being so, it is most misleading to make the budgetary cost even lower by attributing another £490 million to our receipts.
Lord PAGET of NORTHAMPTONMy Lords, am I correct in thinking that the point made by the noble Viscount, Lord Trenchard, is that we are paying £200 million for nothing and ought to consider ourselves jolly lucky that we are not paying £1,000 million?
Lord WALLACE of COSLANYMy Lords, as regards our membership of the EEC, there are swings and roundabouts. On the one hand, we gain benefits from regional grants; on the other hand, there is this vitally important question of food costs. Above all, there is the serious and ridiculous spectacle of butter mountains and mountains of other food which have to be disposed of at great costs to the EEC. We believe that that policy is downright ridiculous and needs alteration.
§ Lord SANDYSMy Lords, that may well be so, but what is not included in the Government's costing is the Regional Fund. I should like to know why the Regional Fund has not been mentioned in the Goverment's White Paper Farming and the Nation—a subject about which the noble Lord the Leader of the House waxed eloquent 10 days ago when discussing EEC negotiations.
Lord WALLACE of COSLANYMy Lords, I shall not wax eloquent because, with all due respect to the noble Lord—with whom I have extremely friendly relations—his supplementary question is nothing to do with the Question under discussion.
§ Lord SANDYSMy Lords, it has everything to do with the Question because it is part of the total price mix.
Lord WALLACE of COSLANYMy Lords, I can only repeat that we are now dealing with the CAP question, about which the Government are seriously concerned—I understand that the Opposition is also, but in a more gentlemanly fashion.
§ Lord LEATHERLANDMy Lords, as my noble friend mentioned the butter 1417 mountain, can he tell us whether some of that surplus butter can be used to reduce the price of butter in Britain which, during the last few weeks, has increased by about 10p per half pound?
Lord WALLACE of COSLANYMy Lords, it is a question of the law of supply and demand. If more butter was put into circulation the price would come down. But of course some producers might not get such benefit.
§ Baroness ELLESMy Lords, I wonder whether the Minister could answer two questions. First of all, he referred to world prices. Could the Minister assure the House that if the United Kingdom were to try to buy on the world market the products that they now get from the Community, they would be able to buy at the same price as now obtains on world markets? In fact, is the total amount available that we need to import into this country? Secondly, would the Minister confirm that, if the Minister of Agriculture so wished, the surplus butter in this country could be given to old age pensioners, as it used to be before this Government came into office?
Lord WALLACE of COSLANYMy Lords, so far as the disposal of butter is concerned, this is a matter for the EEC. The Government feel that there should be a change in the Common Agricultural Policy to bring general benefit all over the area, and not in one hand to give it away as a sort of donation from charity, which I do not think meets the point. So far as world prices are concerned, my information is—and I accept that this is dependent upon supplies being available outside the Market—they are in fact lower than the present price we are paying through CAP.
§ Lord ORR-EWINGMy Lords, would the noble Lord come back to the question of regional grants? Why are Her Majesty's Government opposing regional grants when we, in the United Kingdom, put in 18 per cent. and get out 27 per cent.? Is it not therefore worth while having these regional grants, which incidentally help the regions and help agriculture in the regions?
Lord WALLACE of COSLANYMy Lords, I would not disagree with the noble Lord. But in point of fact, of course, with 1418 all due respect to him, this is nothing whatever to do with this Question.
§ Viscount TRENCHARDMy Lords—
§ Lord PEARTMy Lords, we have had some time on this Question. I hope that the noble Viscount will appreciate that there is a general desire to go on. We have had 25 minutes on Questions.