HC Deb 22 October 1986 vol 102 c912W
Mr. Dorrell

asked the Chancellor of the Exchequer if he will make a statement on the latest meeting of the European Community's Economic and Finance Council.

Mr. Lawson

The Economic and Finance Council met in Luxembourg on 13 October. I chaired the meeting and my hon. Friend the Minister of State represented the United Kingdom.

The Council discussed the Commission's proposal for a further tranche of investment project finance for small and medium-sized firms in the Community under the new Community instrument facility. The Council will return to this topic later in the year.

The Council had a useful discussion on budgetary discipline and Community spending on agriculture. The context of the discussion was the latest Commission assessment that there will be a substantial overrun of agricultural expenditure in 1987 and the long-term problem of restraining common agricultural policy expenditure.

There was general agreement in the Council and with the Commission on the urgency and seriousness of the situation. I tabled some Presidency conclusions which received general support in the Council, though the German, Greek and Danish delegations expressed some reservations.

These conclusions provided that, with a view to bringing expenditure under better control, avoiding the production of surpluses for which markets cannot be found and opening the way for a more structured approach to disposal of existing stocks, forthcoming policy decisions should, while respecting the principles set out in article 39 of the treaty, have regard to the following principles:

  1. (i) Community support prices should more closely reflect supply, demand and market conditions, especially in sectors where there is surplus production;
  2. (ii) the intervention system should operate according to its intended role, as a safety net to support the market at times of particular pressure and not as a standard alternative marketing outlet;
  3. (iii) price support policies should wherever possible be flexibly operated so that commercial risks are not borne in their entirety through public finance.