§ Mr. Austin MitchellTo ask the Prime Minister whether she took into account the increase in the value of the pound sterling against the deutschmark in the negotiations in Brussels on 11 to 13 February; what value is placed on the pound sterling in the present level of common agricultural policy prices; to what extent United Kingdom common agricultural policy prices will have to be changed to reflect the value of the pound sterling against the deutschmark; and what would be the effect on United Kingdom common agricultural policy prices if the real value of the pound sterling, measured in terms of relative export prices for manufacturers, fell to the level which obtained in the fourth quarter of 1976.
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§ The Prime MinisterAll relevant considerations were taken into account during the recent negotiations in Brussels.
Common agricultural policy prices are set in ecus and converted into sterling using green rates and not market rates of exchange. The United Kingdom green rates are currently:
- Arable products—1 ecu = £0.656148
- Beef—1 ecu = £0.710546
- Pigmeat—1 ecu = £0.694266
- Sheepmeat—1 ecu = £0.652575
- Other sectors—1 ecu = £0.665557
Common agricultural policy prices in the United Kingdom are not directly affected by the sterling/deutschmark exchange rate. However, under arrangements agreed in 1987, green rates will be altered following any European monetary system realignment if the net effect of the realignment of the central rates of all EMS currencies including the deutschmark is to widen the gap between green and market rates of exchange. Apart from these arrangements, there is no mechanism directly relating to CAP prices in the United Kingdom to any particular market value of sterling.