EEC SURPLUSES: COST TO UK (Hansard, 21 February 1980)

§ Baroness ELLIOT of HARWOOD
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers)
My Lords, the United Kingdom contributes towards the cost of the European Community budget as a whole and not to individual elements separately. In percentage terms, the contribution to the budget is about 20 per cent.

§ Baroness ELLIOT of HARWOOD
My Lords, while thanking the noble Earl for that reply, may I ask whether it would be possible for Her Majesty's Government to suggest to the EEC that they might think of ways of disposing of the surpluses in a more lucrative and better manner? Apparently, they have no idea of selling agencies of any kind, and it seems that all they can do is give away the surpluses. If there could be some proposals made for selling the surpluses would he agree that that would benefit everyone?

Earl FERRERS
My Lords, I quite understand my noble friend's point of view; the elimination of the surpluses is one of the great problems presenting itself to the Common Agricultural Policy. At the moment the view is that if there is a surplus, the best thing to do is to eliminate it in order to get back to regularity of supply. It is our intention at the moment to press for conditions where surplus food is not produced.

§ Lord SHINWELL
My Lords, can the noble Earl tell me and Members of your Lordships' House what we get by way of benefit for the 7 per cent. that it costs us?

Earl FERRERS
My Lords, I think that the noble Lord, Lord Shinwell, misheard. Probably it was my fault, due to bad articulation, but it is 20 per cent., not 7 per cent., which is our contribution to the Community budget as a whole, of which about 75 per cent. goes to the Common Agricultural Policy. I think the noble Lord's question was, what do we get for that? I can tell him that what we get is a united Europe which is trying to find a way to deal with the problems which we recognise as confronting it.

Lord BRUCE of DONINGTON
My Lords, is the noble Earl aware that the disposal costs for the purposes of the Community budget are included in the storage costs under Title No. 6, and that for the year 1980 the total storage costs, including costs of disposal of surplus food products, are £1,000 million, of which, on the noble Earl's calculation, the United Kingdom is due to bear some £200 million? In view of the observations that have been made from time to time on the necessity to reduce public expenditure, will Her Majesty's Government take the most energetic steps to see that the United Kingdom is rid of this waste of money?

Earl FERRERS
My Lords, I think that there is nothing very much between us because precisely the concern which the noble Lord, Lord Bruce of Donington, has expressed is one which is shared by Her Majesty's Government—that our contribution to the Community is at the moment too great. I should like to give the noble Lord the following information, in which he might be interested. According to the figures provided by the Commission for the Dublin Summit last year, in 1980 the net contributions or receipts of Member States will be such as will result in the Netherlands having the benefit of £379 million, France of having £205 million, Germany having a net deficit of £278 million, and we ourselves having a net deficit of £1,170 million; and it is that that we consider is far too great.

§ Lord MACKIE of BENSHIE
My Lords, is the noble Earl aware that we accepted the terms on joining the Community? We accepted the fact that instead of paying probably £500 million in deficiency payments, we would pay it into the Common Market directly in levies, and that for this we receive the benefits of the Community in both political and economic terms, and that our exports to Europe have doubled in this time? If you take the amount that we would have paid in deficiency payments and the amount that the public will collect in benefit, it is not a bad buy.

Earl FERRERS
My Lords, I accept the point of view of the noble Lord, Lord Mackie of Benshie, which is one that we share. It is that when we joined the Community, we joined it for considerably greater purposes than just the purely fiscal ones. But I am bound to tell the noble Lord that, when we joined, the price of oil in the world took off, and we are now in a position of contributing sums of money which at that time were never envisaged. If my figures are correct, I think I can tell the noble Lord, Lord Mackie, that we are now contributing four times that which was contributed in 1973—and that is a figure that was never expected then.

§ Lord GORONWY-ROBERTS
My Lords, may I join the noble Lord in asserting that for very many people on both sides of the House the political priority activated our desire to join the Market? I say once more than unless and until the economics of the Market are drastically overhauled, and the obvious enormous unfairness to this country is put right, that very priority of political co-operation and unity will be imperilled.

Earl FERRERS
My Lords, the noble Lord, Lord Goronwy-Roberts, is entirely right. The political opportunities and advantages arising from our membership of the Community are enormous: and it is our desire also to see that the financial contribution is fair. We can do that only through co-operation, discussion and agreement with the other eight Members of the Community—and that is what we want to try to achieve.

Baroness VICKERS
My Lords, may I ask the noble Earl, in view of the fact 896 that we have this surplus, whether consideration has been given to contacting the International Red Cross to see whether they might take some of it to help people who are starving in various countries?

Earl FERRERS
My Lords, I shall certainly take note of my noble friend's observation and let her know what the position is. The difficulty in all these matters is that if you have a surplus and if you have to dispose of it, somebody has to pay for it. It is easy enough to get rid of it if you do not make any charge, but all that does is to increase the sum of money which the Community itself has to bear.

§ Lord ROSS of MARNOCK
My Lords, can the noble Earl tell us the extent to which our agricultural production contributes towards this surplus? Many of us feel that this has not been a very good decision for the country and that it is a very high price for suicide.

Earl FERRERS
My Lords, of course our position is that we are a net importer of food and that we are not a contributor to the surplus. One of the reasons why my right honourable friend is at the moment placing on record his objection to the proposals of the Community is that in milk, sugar and butter, in regard to which we are not contributors to the surplus, we are in fact becoming the hardest hit under the Commission's present proposals; and that is what we think is unfair.

Lord CAMPBELL of CROY
My Lords, could my noble friend tell us why the financial mechanism which was specially negotiated in 1975, before the referendum took place, has apparently not been effective?

Earl FERRERS
My Lords, I think that that negotiation was done by people other than ourselves, by the party opposite when they were in power, and it may he that they are the ones who ought to answer that question; but I think in fairness I would say that in all these negotiations one can negotiate only on the basis of what one believes at the time to be something right for the future. When conditions for the future change—and they have changed considerably since we have been members of the Community—then one very often finds that things which are 897 agreed in fairness at the time prove to be not quite as equitable as one had anticipated.

§ Lord KALDOR
My Lords, in view of the widespread resentment which is felt—and not only in this country—concerning the disposal of these surpluses and the countries which receive them at very favourable prices, would it not be possible for Her Majesty's Government to promote a scheme in Brussels by which the surpluses could be disposed of in ways that benefit the poor or the unemployed, or the people on supplementary benefits, who are in the Member countries of the EEC, and not those outside?

Earl FERRERS
My Lords, that is an idea which we certainly would consider. Again, the difficulty is that if you give subsidised food within the Community all you do is exacerbate the problem of dealing with the surplus. But, having said that, the noble Lord will recall that we have in fact a butter subsidy which is 100 per cent. subsidised by FEOGA. Under the Commission's present proposals that subsidy is to go, and again we think that that is unfair.

§ Lord ROBBINS
My Lords, would the noble Lord not agree with me that the attitude of Her Majesty's Government would be substantially reinforced if the precise figures for which the noble Baroness asked in her original Question could be made available to the House in some sort of synoptic form—year by year since joining the Community, for instance?

Earl FERRERS
My Lords, it is not in fact very easy to give the breakdown of the figures. What I will do is give these figures to the noble Lord, Lord Robbins, which he may find a little difficult to digest at the moment but which he may be able to digest a little later. The total provision for expenditure on farm price support in 1979 was about £7,000 million. Of this, some 45 per cent. was for export subsidies and a further 20 per cent. for various subsidised sales within the Community. At least 65 per cent., therefore, could be said to go on disposing of surplus production. A further 10 per cent. went on purchases into intervention and on storage costs.
898 I think the noble Lord may find that that is helpful, even if he cannot digest it all now.

The Marquis of HEADFORT
My Lords, would the noble Earl the Deputy Leader of the House not agree that, after Afghanistan—

Several noble Lords
Order! Order!

§ Lord DERWENT
My Lords, would my noble friend agree that sixteen minutes is quite enough for two Questions?

Earl FERRERS
My Lords, I do not know whether it is enough for two Questions, but I fancy that certainly it is enough for one. I hesitated to suggest that your Lordships might move on because I thought your Lordships might think that I was not wishing to answer any more questions; but, if you were to think that it might be suitable to move on to the next Question, perhaps your Lordships will be good enough to cease asking me any more.