Common Agricultural Policy

HC Deb 21 July 1978 vol 954 cc420-3W

Mr. Jopling

asked the Minister of Agriculture, Fisheries and Food if he will list in the Official Report the percentage allocation from the Community Budget to the guarantee and guidance sections of the common agricultural policy for each of the last 10 years.

Mr. John Silkin

The information requested is set out in the attached table for the 10 years 1968 to 1977.

the Draft General Budget of the European Communities for 1979. This followed an exchange of views with representatives of the European Assembly about budgetary priorities and consideration by the Council of the proposals presented by the various Community institutions in the Preliminary Draft General Budget.

At the outset of the Council I made a statement expressing the Government's serious concern over the continuing predominance of expenditure on the common agricultural policy in the total Budget and drawing attention to the need to take steps to reduce this considerably in future years.

In particular, I referred to the situation which occurs year after year, where the Budget Council is asked to approve a further increase in agricultural expenditure even though it is commonly agreed that such expenditure is already too high and forms too high a proportion of the total Budget. Moreover, even on optimistic assumptions, the Commission had estimated that this trend would continue and agricultural expenditure would still be growing in real terms in both 1980 and 1981.

I referred also to the conclusion which the European Council, meeting at Bremen earlier this month, reached on the excessive predominance of agricultural expenditure and the need for the Commission to review the position and formulate proposals for achieving reductions. Commissioner Tugendhat confirmed that the Commission would present its proposals in time for the next meeting of the European Council in December.

I remind my colleagues in the Budget Council that the huge cost of the CAP arises largely from the existence of surpluses, which also represent a serious misuse of Community resources, in many cases involving a transfer of resources away from the less prosperous areas of the Community to the more prosperous. In this connection I refuted the view, advanced by some member States, that expenditure on monetary compensatory amounts—MCAs—on our agricultural imports represented a benefit to the British housewive in the form of lower prices. I made quite clear that, on the contrary, these MCAs are part of the cost of supporting producers in other member States at excessively high prices, since they enable them to find in the United Kingdom a market which might otherwise not exist for their surplus output.

I said that I recognised that the expenditure consequences of the 1978 price fixing had to be accepted. However, I emphasised that the prospect of CAP expenditure continuing to grow in real terms was completely unacceptable to the United Kingdom, and I was therefore voting for the agricultural appropriations in the 1979 Preliminary Draft Budget only on the assumption that action would be taken to bring about a substantial reduction in the cost of the CAP in the Budgets for 1980 and future years. Such a reduction could only be achieved if there were no increase in the prices of surplus products until the burden of those surpluses had been removed. A clear decision in this sense on prices could, as necessary, be reinforced if Finance and Budgetary Ministers were able to set a cash limit on agricultural expenditure which Agricultural Ministers would respect in taking their decisions, rather than leaving Budgetary Ministers to find whatever money is required to meet agricultural policies that build up bigger and bigger surpluses.

Since the level of provision for agricultural expenditure will be reviewed later in the year in the light of the harvest, the Council approved unaltered the Commission's estimates for titles 6 and 7 of the Budget.

The Council also agreed on appropriations for the Regional Development Fund of 620 million European units of account —MEUA—for payments. For the Social Fund the Council agreed appropriations of 672.5 MEUA for commitments and 470 MEUA for payments; additional appropriations of 40 MEUA for commitments and 18 MEUA for payments were entered in Chapter 100 in respect of new measures for young people. I expressed my great disappointment that my fellow Ministers were unable to accept higher provisions for these priority areas; the Council did, however, agree that if in the event it appeared that a higher level of payments would be achieved, it would be ready to consider a Supplementary Budget.

Following the failure of the Energy Council to reach agreement on the Commission's proposals in the energy sector, the Council reduced the appropriations in chapter 32 to 25 MEUA for commitments and 30 MEUA for payments.

On aid to non-associates, I was unable to secure the agreement of the Council to provision in excess of 60 MEUA. Pending further consideration of the Commission's proposals to include borrowing and lending in the Budget, the Council decided to retain the existing presentation.

The expenditure consequences of the Council's decisions on staff have yet to be calculated; the total level of appropriations in the Draft General Budget is not yet therefore known precisely, but I would expect the outcome to be about 13.8 billion EUA for commitment appropriations and 13.0 billion EUA for payment appropriations.