EC Budget: UK Contribution (Hansard, 11 March 1992)

§ The Minister of State, Department of Transport (Lord Brabazon of Tara)
My Lords, the UK's gross contribution after abatement to the European Community budget in 1992 is forecast to be 7.5 billion ecus, equivalent to £5.5 billion. This represents nearly 13 per cent. of member states' gross contributions. Germany is the Community's largest contributor. At 16.8 billion ecus in 1992, its gross contribution represents nearly 29 per cent. of the total. The gross contributions of France and Italy are also both larger than that of the UK, at 19 per cent. and 15 per cent. respectively. The Community budget for 1992 makes provision for expenditure support for tobacco of 1.3 billion ecus, or £900 million.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend for those rather disturbing figures. Is he aware of the proposals by the EC substantially to increase the contributions? Is he in a position to say whether Her Majesty's Government are prepared to resist the increases?

§ Lord Brabazon of Tara
Yes, my Lords. We certainly agree, and have already stated, that the proposals for the increased provisions are far too large. The Commission's budgetary proposals cannot be implemented without the unanimous agreement of the Council of Ministers, and there is no question of the Government agreeing to the proposals.

§ Lord Ennals
My Lords, why should the taxpayers' money be used at all to subsidise tobacco growing? The Minister will be aware that today is National Non-Smoking Day. It may be that other events will sweep it off the front pages. However, since Ministers are trying to reduce the amount of smoking in this country, particularly among children, will the Minister say why taxpayers' money should be used to subsidise tobacco growers?

§ Lord Brabazon of Tara
My Lords, the United Kingdom has long criticised the operation of the CAP in this sector. It is the most expensive per hectare; production and budgetary expenditure have risen markedly over the years. The stabiliser has been inadequate, and fraud has been conspicuous. There is the conflict with health policy. A particularly unpleasant feature is that much expenditure is for subsidies on exports to third world countries. The Government would like to see this support come to an end.

§ Lord Mason of Barnsley
My Lords, is the Minister aware that each increase in cigarette taxation encourages more cigarette imports, both legal and smuggled? Apart from the revenue loss which is inevitable—Her Majesty's Government already lose much revenue through imports—this also undermines the Government's health policy. It means that cheap, high tar content cigarettes are entering the country and becoming more readily available to both young people and the unemployed. Does the noble Lord agree?

§ Lord Brabazon of Tara
My Lords, I believe that that is a completely different question from the one on the Order Paper.

Lord Bruce of Donington
My Lords, reverting to the first part of the Question asked by the noble Lord, Lord Boyd-Carpenter, is the Minister aware that the figures that he gave were the gross contribution of the United Kingdom? Much more important is the net contribution after all deductions and abatements which shows a much more unfavourable position for the UK. Is the noble Lord aware that under the new proposals put forward by the Commission at Maastricht, in a publication entitled The Means to Match our Ambitions, the United Kingdom contribution will increase even further? Some attempt will be made at the instigation of the Commission to make Britain fight for the abatement that it secured at Fontainebleau many years ago.

§ Lord Brabazon of Tara
My Lords, of course the figures I gave in my original Answer were the gross figures, but the UK's figure was after abatement. The net figures, as best I could produce them, appeared in a Written Answer to the noble Lord, Lord Stoddart of 1321 Swindon, on 25th February, at col. WA6 of Hansard. As regards the United Kingdom abatement, the Commission makes no proposals to change abatement at this stage. In any case, a change would require unanimity and we shall not throw away what we fought so hard to win.

§ Lord Harmar-Nicholls
My Lords, if we resist the extra contribution called for, can my noble friend say whether we will also resist the extra expenditure envisaged by the Community, particularly on the CAP?

§ Lord Brabazon of Tara
My Lords, as concerns the CAP and any extra expenditure on it, we welcome the Commission's recognition that the CAP needs reforming. Reform is needed to increase the exposure of agriculture to market forces and to reduce the burden of the CAP on both consumers and taxpayers.

§ Lord Mackie of Benshie
My Lords, in view of Her Majesty's Government's great disapproval of the expenditure on tobacco we have been discussing, what proposals have they made as regards growing other crops in the areas where tobacco growing is important to rural communities?

§ Lord Brabazon of Tara
My Lords, we welcome the proposals the Commission has now brought forward on the tobacco regime as part of its CAP reform package. Those proposals involve the abolition of intervention buying and export refunds, the imposition of quotas and a system of tightly controlled direct payments to growers. We support the Commission in those aims. As I said, we would ideally like the Commission to move towards phasing out all support for tobacco over a period of time. We recognise that that process would cause difficulties for growers whose opportunities for diversification are limited. To deal with that the Commission should devise appropriate alternative means of support.

§ Lord Stoddart of Swindon
My Lords, will the noble Lord confirm that Greece receives in net terms £1.8 billion per year in contributions from the EC? Will he also confirm that Greece receives the major tobacco subsidy and that its tobacco crop has the highest tar content of any tobacco crop in the world? Does he agree that government policy which seeks to increase the price of British cigarettes, with the result that they become the second highest priced cigarettes in the Community, and the proposed ban on advertising will lead only to additional imports of high tar cigarettes to the detriment of people's health in this country?

§ Lord Brabazon of Tara
My Lords, as I said, the second part of the question constitutes a different subject. There has been a net gain by Greece of £1.8 billion from the Community budget. I cannot, however, say how much of that money is connected with tobacco subsidies. I cannot confirm either the tar content of cigarettes produced in Greece.

§ Lord Donoughue
My Lords, given the fundamental contradiction between, on the one hand, taxing tobacco for health purposes and banning advertising 1322 in the EC while, on the other hand, subsidising lethal tobacco production to the tune of £1 billion, could not the Government use our coming presidency of the EC to establish a priority for eliminating this lunacy? Would it not surely be better to spend that £1 billion on research and investment in the countries of the southern Mediterranean to enable them to switch from this unwanted production?

§ Lord Brabazon of Tara
My Lords, as I said, the Commission has put forward some proposals for reform of the tobacco regime that we could support. Ideally, we should like to see support for that regime phased out altogether. We shall certainly press for that measure to be adopted during our presidency.

§ Lord Boyd-Carpenter
My Lords, does the original Answer of my noble friend to my Question mean that Her Majesty's Government have a veto on the proposed increases in Community expenditure, and if so will they exercise it?

§ Lord Brabazon of Tara
My Lords, as regards future expenditure, budget proposals cannot be implemented without the unanimous agreement of the Council of Ministers. There is no question of the Government agreeing to those proposals.