§ Mr. Deakinsasked the Chancellor of the Exchequer what mechanism exists to ensure that common agricultural policy expenditure take a decreasing proportion of the EEC budget; if this principle holds good even if there are exceptional circumstances such as changes in the dollar/European currency unit rate; and if he will make a statement.
§ Mr. BrookeExpenditure under the guarantee section of the European agricultural guarantee and guidance fund in the EC budget is constrained by the financial guideline. The methodology for calculating the guideline was set out in the meaures adopted by the Council of Ministers on 4 December 1984 to guarantee the effective implementation of the conclusions of the European Council on budgetary discipline. The financial guideline limits the increase in agricultural market support expenditure to no more than the rate of growth of the own resources base. The measures adopted by the Council make specific provision that account has to be taken of exceptional circumstances.
The ECOFIN Council on 7 July, reported in Hansard at column 195, agreed that the limit on agricultural spending in 1986 could be increased by the
amounts which can be justified mainly by the exceptional circumstances of the abnormally large depreciation of the dollar".The United Kingdom Government have consistently argued for adherence to the financial guideline and will continue to do so in the future.