§ 2.48 p.m.
§ Lord Campbell of Croy asked Her Majesty's Government:
§ How much they estimate the United Kingdom will pay towards the cost of absorbing East German agriculture into the common agricultural policy.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)My Lords, the Community budget for agricultural market support in 1991 was increased in December by?916 million in order to meet the costs of extending the common agricultural policy to East Germany. It is not possible to give a precise estimate of the additional costs involved for the United Kingdom, but in 1991 the United Kingdom is expected to contribute some 11.7 per cent. of the Community budget.
Lord Campbell of CroyMy Lords, I am grateful to my noble friend for her reply and I welcome the dramatic changes that have taken place in Eastern Europe during the last two years. Recognising that this is a difficult subject, should not the German Government meet a large part of that bill because they promoted unification and have benefited politically from it?
§ Baroness TrumpingtonMy Lords, in answer to my noble friend, from the date of unification the CAP applied in East Germany as in other parts of the Community. The costs of agricultural support are therefore met from the Community budget in the normal way. However, the costs of disposing of stocks accumulated under the previous regime—for example, the costs; of export refunds on exports of agricultural products under contracts agreed by the old GDR—are paid for by Germany.
§ Lord Stoddart of SwindonMy Lords, is it not a fact that East Germany was able to come in through the back-door without any delay and without any veto by any other country? Is it not also a fact that the 1354 Community's agricultural budget is already overdrawn and that, because of the extra£900 million which the noble Baroness mentioned, the Community will run out of money earlier than it would otherwise do? Can we have the Government's assurance that they will not agree to a further increase in the Community's own resources through additional VAT contributions?
§ Baroness TrumpingtonMy Lords, there is no case for increasing the budget. The 1991 budget was increased to take account of the estimated costs resulting from German unification and that increase is within the guideline. Those estimated costs have not changed. It is other factors such as continuing over-production, falling consumption and weak world markets which are leading to budget problems. Those are precisely the types of over-expenditure that the budget discipline arrangements, including the guideline, were designed to curb.
§ Lord CockfieldMy Lords, does my noble friend not agree that, so long as the budget guideline on agricultural expenditure is respected, the overall amount paid by the United Kingdom cannot be affected although the division between East and West may be? Does she not therefore agree that it is vital that the budget guideline should be respected?
§ Baroness TrumpingtonMy Lords, I entirely agree with both my noble friend's remarks.
§ Lord GallacherMy Lords, does the noble Baroness agree that under the present arrangements the common agricultural policy contributions are of such a nature that Germany and the United Kingdom are net contributors to the budget; that France, on the other hand, receives as much out of the CAP as it puts in; and that the remaining nine member states receive more out of the CAP than they put in? Despite the words used elsewhere in the Chamber this afternoon, is it not a fact that, if that balance is disturbed by reason of Germany taking out rather more than it currently puts in, whatever one says about the British contribution in percentage terms, in money terms it is likely to be a much larger sum?
§ Baroness TrumpingtonMy Lords, I have two answers. I do not know which to give the noble Lord, but I shall try the second one. It is not possible to give a figure for the UK share of the cost of the CAP. The UK contributes to the EC budget as a whole, not to parts of the budget. Moreover, the UK's contribution to the budget is reduced by the abatement—£2,367 million in 1991—paid by the 11 other member states to reduce our overall share. That cannot realistically be allocated to the different parts of the budget.
§ Baroness TrumpingtonMy Lords, in for a penny, in for a pound. The United Kingdom contributes to the cost of the CAP, which applies in East Germany now that it is part of the Community, but the same applies to other member states. Germany's contribution to the EC budget automatically increased when East Germany was absorbed into the Community. 1355 Germany remains the largest contributor to the total budget, paying about three times the UK's contribution. I hope that your Lordships are satisfied.