Will also be better prospects for our exports of agricultural and food products in the markets of the enlarged Community at higher prices. Our efficient agricultural and food industries are well placed to take advantage of these opportunities. Thus, as a result of our entry, home agricultural output can be expected to expand more quickly. The Government expect additional expansion of some 8 per cent overall on this account by 1977. With these prospects, the industry can plan ahead and invest with confidence.
88. It is estimated that membership will affect food prices gradually over a period of about six years with an increase of about 24 per cent each year in retail prices. As food accounts for about a quarter of total consumer expenditure the effect on the cost of living would be about per cent each year. There is, of course, no harmonisation of retail prices in the Community. The effect of entry on the retail prices of foodstuffs here will therefore depend on many factors, including the efficiency of our own system of processing and distribution. It will vary from commodity to commodity. Some, such as butter, cheese and beef, are likely to rise by significantly more than the average; others, such as bread, flour and eggs, by about the average; and others, such as milk, fish, oils and fats, tea and coffee should show little change in price. For some fruit and vegetables prices should be lower at certain times of the year. Moreover, the increase in food prices will be offset to some extent by lower prices for other consumer goods as a result of tariff reductions.
89. These estimates compare with an estimated increase of 18-26 per cent in food prices over the transitional period set out in the 1970 White Paper.* Since that White Paper was published, however, the gap between United Kingdom and Community food prices has narrowed considerably, partly because world prices have been rising faster than Community prices.
90. Retirement pensioners and those dependent on other social benefits will be protected from the effects of the increase in food prices through adjustments in those benefits. These effects will not begin to be felt until the spring and summer of 1973, and, as indicated in paragraph 88, are likely then to be small. The Government are committed at least to maintain the purchasing power of national insurance pensions and related benefits through regular reviews every two years. In the normal cycle the next review will take place in 1973. Supplementary benefits are kept under close review. The Government undertake that in these reviews, both in 1973 and subsequently, full allowance will be made for the effect on prices of joining the EEC. National Insurance pensioners and beneficiaries, as well as those entitled to supplementary benefits will share in the increased prosperity flowing from membership of the Community. Accession to the Community will not alter in any way the National Health Service.
Contribution to the Community budget
91. From the
the outset the Government recognised, as did their predecessors, that it would not be possible to seek to make fundamental alterations in the system of providing funds for the Community. The
*“Britain and the European Communities: An Economic Assessment ". (Cmnd. 4289, February 1970.)
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