European Community (United Kingdom Membership)

Oral Answers to Questions – in the House of Commons at 12:00 am on 24th July 1980.

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Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North 12:00 am, 24th July 1980

9. Mr. Marlow asked the Chancellor of the Exchequer what further discussions have taken place with European finance ministers concerning the total cost to the United Kingdom of European Economic Community membership.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The Finance Council last held an extended discussion of the overall economic effects of Community membership in October 1979. The subject is, moreover, highly relevant to the longer-term review provided for in the agreement of 30 May.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

When my right hon. and learned Friend next meets the Finance Ministers in Europe, will he draw their attention to the fact that food and feed stuffs, imported last year under the common agricultural policy, at common agricultural prices, gave us a bill of some £627 million beyond and above the price that we would have to pay if we had bought the same goods on the world market? If we had bought our stuff on the world market, and not under the CAP, it would have made no difference to the world's supply and demand situation, and we could have made a saving of £627 million. This constitutes a real increase to the budget deficit. Will he bring this fact to the attention of the Finance Ministers and ensure that they take good account of that in any future financial calculations?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

Without doubting the figures that my hon. Friend has quoted, I accept the extent to which the common agricultural policy and other aspects inflict significant non-budgetary losses on the commodities that he mentioned. We drew that to the attention of Community Finance Ministers during negotiations, which were directed in the first instance at the budgetary problem. We shall certainly draw that point to their attention during the next stage of our discussions on the structure of the budget.

Photo of Mr John Garrett Mr John Garrett , Norwich South

What is the Treasury's current estimate of the total cost of Britain's membership of the EEC?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

It is not possible to produce a total cost. It must be remembered that there are factors on both sides of the account. For example, there has been a substantial increase in our exports to Europe and those exports have increased at a faster rate than our exports to other overseas markets. I do not wish to mislead the House or the hon. Gentleman. When we reach the next stage of the negotiations on the structure of the budget—provided for in the agreement of 30 May—all those matters should be, and will be, taken into account.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Will my right hon. and learned Friend explain the principles that will apply to reforming the EEC budget?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The main principle is to ensure that it operates fairly for all member States and provides a stable roundation for the long-term financing of the Community.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

When the Chancellor of the Exchequer deals with" all those matters", will he include the cost of the increased unemployment that has resulted from our membership of the EEC? Will he estimate the additional cost of unemployment pay to fishermen, both now and in the future?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

I know that the hon. Gentleman if often prepared to attribute many misfortunes to our membership of the Community. However, it would be wrong to assume that our membership has had an adverse effect on employment in Britain. Our exports to the Community have been increasing at a faster rate than our exports to other parts of the world. That should be borne in mind.

Photo of Stephen Dorrell Stephen Dorrell , Loughborough

In calculating the total cost-benefit balance of our membership of the EEC, will my right hon. and learned Friend bear in mind that Europe is this country's largest and fastest growing market, and that we have no interest in isolating ourselves from our most important customers?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

I am grateful to my hon. Friend, as he has emphasised the point that I have been trying to make. I repeat that last year our exports to the Community increased by 30 per cent., while our exports to the rest of the world increased by only 8 per cent. It is important to remember the significance of our trading links with the Community.

Photo of Mr Bob Cryer Mr Bob Cryer , Keighley

Is it not true that our imports from the EEC have been growing at a more rapid rate, and that we have a deficit of between £2·5 billion and £3 billion? Does he not accept that the Venice charade allowed us to have some of our own money back, with the EEC's permission? Does not that mean that there has been a shift away from the United Kingdom Parliament, in relation to the right to raise taxes and to decide on expenditure? Is it not true that the EEC Commission will now decide how the money is to be spent?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

As regards the significant point that the hon. Gentleman has raised, the deficit on visible trade increased in money terms, but in real terms there has been a small net reduction in our deficit with the Community. I am not sure how the hon. Gentleman has managed to confuse what took place in Venice with what took place within the Community. There is no connection between the two.