§ Mr. Arthur Lewisasked the Chancellor of the Exchequer what is the policy of Her Majesty's Government towards the proposal by the European Commission to seek a £500 million supplementary budget to pay in part for the increased costs of the common agricultural policy and the subsidisation of the export of butter to the Union of Soviet Socialist Republics and other non-EEC States.
§ Mr. LawsonOn 16 October, the Commission transmitted to the Council of Ministers the preliminary draft of a third supplementary budget for 1979 which proposed increases in expenditure totalling 831.28 MEUA—about £525 million at the rate of exchange applicable to the 1979 budget, that is, £1=1.5875 EUA. The supplementary budget is required to cover increased expenditure, mainly for the guarantee section of the European agricultural guarantee and guidance fund.
Member States, including the United Kingdom, considered that supplementary provision would be necessary to enable the Community to meet its obligations arising out of agreed policy.
On 29 October the Council therefore established a draft supplementary budget increasing provision by a further 100 MEUA—about £63 million—to a revised total of 931.28 MEUA—about £588 million. This draft supplementary budget is now being considered by the European Parliament.
The costs of the CAP, including export refunds, reflect the large surpluses of major agricultural products within the Community resulting from the present level of price support. The Government have emphasised the importance of reducing the level of support in real terms, in order to eliminate the surpluses and to make subsidised sales in non-EEC markets unnecessary. In this year's price-fixing the Government were instrumental in securing the first price freeze on milk products—which account for the largest element of the surpluses—since the United Kingdom's accession to the EEC. My right hon. Friend the Minister of Agriculture, Fisheries and Food has pro 536W tested to Commissioner Gundelach about the subsidised sale of butter to the USSR, as a result of which the Commission has introduced a system of export licensing for butter which should enable exports to be monitored more closely than hitherto.
§ Mr. Denzil Daviesasked the Chancellor of the Exchequer what percentage of the United Kingdom's total gross contribution to the EEC budget for 1980–81 is estimated to arise from (a) agricultural services, (b) customs duties and (c) value added tax contributions.
§ Mr. LawsonI will let the right hon. Member have a reply as soon as possible.