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Prices (Common Agricultural Policy)

Volume 952: debated on Friday 23 June 1978

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asked the Secretary of State for Prices and Consumer Protection what part of the increase in the annual rate of inflation in the calendar years 1973, 1974, 1975, 1976 and 1977 is attributable to the common agricultural policy.

, pursuant to his reply [Official Report, 23rd May 1978; Vol. 950, c. 515], gave the following information:The greater the time which has elapsed since the United Kingdom joined the EEC, the more difficult it has become to estimate what price might have been paid for imports of foodstuffs had the United Kingdom not joined, and how domestic support prices might otherwise have moved. Estimates made in 1974 and early 1975 showed that membership of the Community was, on balance, having very little effect on food prices and hence the rate of inflation. This was because prices for many commodities were higher outside the Community than within it.Increases in support prices—in addition to the transitional steps—as a result of the CAP price fixing between 1975 and 1977 have been 9·6 per cent. in 1975–6, 7·7 per cent. in 1976–7 and 3·9 per cent. in 1977–78. During this period there has also been devaluation of the green pound —by 5·3 per cent. in August 1975, by 5·8 per cent. in October 1975 and by 2·9 per cent. in May 1977, each of these being phased in by commodity. When announced, these increases were collectively estimated to add 1 per cent. to the RPI in 1975–6, ½per cent. in 1976–7 and¼ per cent. in 1977–8. It is, of course, not possible to separate out, ex post, the effect of the CAP from all those other factors which have contributed to inflation since 1973.