Common Agricultural Policy

HC Deb 02 July 1979 vol 969 cc397-9W

Mr. Richard Shepherd

asked the Minister of Agriculture, Fisheries and Food if he will publish the calculation upon which the EEC Commission stated that the recent price adjustment under the common agricultural policy would add £1,000 million to its cost; and if he will make a statement; and what was the United Kingdom's net contribution to the common agricultural policy in the past year; what estimate he has made of the net contribution for the current year: and if he will estimate the likely net contribution in the following year.

Mr. Peter Walker

The latest revised figures given by the Commission as to the cost of the CAP prices settlement are as follows:

	£ million
The 1½ per cent. price increases plus the changes in the German and Benelux Green rate	63
The 1½ per cent. green franc devaluation	51
Increase in milk powder subsidy	44
Increase butter subsidy	182
Other changes in the milk sector, such as school milk	8
Other increases mainly on aids on processed fruit and vegetables	24
	372
The 5 per cent. green pound devaluation—minus	74
	298
Britain will have to meet 16½ per cent. of this total, which is its marginal contribution to the CAP, which will amount to	49

The benefits to the United Kingdom in financial terms will be:

	£ million
The butter subsidy	65
School milk subsidy	4
Extra receipts due to Green Pound devaluation	14
	83
It will be seen, therefore, that Britain will have a net benefit of	34

There has been much talk that the Ministers agreement added £1,000 million to the cost of the CAP. The reason for this was not any increase in expenditure but primarily due to the fact that the Ministers refused to increase revenue by about £560 million by accepting the Commission's proposals for a high and discriminatory co-responsibility levy. Had this proposal been accepted although it would have added about £560 million of revenue to the budget, Britain would have paid a share of that revenue out of all proportion to her size or to the size of her dairy industry. The acceptance of such a proposal would have substantially increased Britain's contribution to the overall cost of the budget.

The United Kingdom does not contribute to the common agricultural policy as such but contributes to the Community budget as a whole.