§ Mr. Spearingasked the Minister of Agriculture, Fisheries and Food what is his estimate of the effect on retail food costs of adopting the proposals made by France on 20th December 1978 concerning adjustments to EEC monetary compensatory amounts.
§ Mr. Bishop:The French proposal at the Agriculture Council on 18th-20th December 1978 was that any new monetary compensatory amounts arising after the introduction of the proposed European monetary system should be removed within one year of their formation. Whether new MCAs would be created, 651W and, if so, their size, will depend on future exchange rate movements. Consequently, the effect of adopting the French proposal on food prices cannot be predicted.
The French Government have also urged the phasing out of existing MCAs over a period to be decided. I estimate that if the present United Kingdom MCA were eliminated this could increase the retail food price index by some 5 per cent. to 6 per cent.