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Green Currency Gaps

Volume 168: debated on Wednesday 28 February 1990

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To ask the Minister of Agriculture, Fisheries and Food what is the estimated cost of eliminating the green currency gaps; and what would be the resultant cash effect upon United Kingdom agriculture.

The Government are committed to eliminating the monetary gap associated with the green pound by the end of 1992 at the latest. The effect of a complete devaluation of the green pound will depend on movements in the market rate of sterling over this period. It is estimated that a devaluation to eliminate the present monetary gap would add about £290 million in a full year to public expenditure in the United Kingdom. This expenditure would be mainly financed from the EC budget to which the United Kingdom, of course, contributes. Such a devaluation would increase farmers' incomes by over £700 million in a full year and add around 1·25 per cent. to retail food prices on average.