HC Deb 18 July 1973 vol 860 cc484-93
The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber)

With your permission, Mr. Speaker, I should like to make a statement on the meeting of the Council of Agricultural Ministers in Brussels this week. The main subjects discussed were sugar, beef and the problem of protein for animal feed arising from United States controls on exports of soya beans.

There were two issues concerning sugar before the Council. The first related to the subvention to United Kingdom sugar refiners which I announced to the House on 28th March, and which is designed to enable us to continue refining Commonwealth Sugar on the same basis as before. The European Commission had warned us that they might have to take the view that this arrangement was incompatible with the Treaty of Rome. I received notification yesterday that the Commission was of that opinion, and so I immediately raised the issue in the Council of Ministers. I explained the importance of this subvention to the honouring of our Commonwealth commitments, and I am happy to tell the House that the Council immediately and unanimously decided to authorise its continuation for the next 12 months.

The second issue related to the arrangements for sugar from 1975, with the three interrelated aspects of continued imports from the developing Commonwealth, the EEC's membership of the International Sugar Agreement, and the future arrangements for sugar beet in Europe. The Commission tabled far-reaching proposals on all these aspects. Obviously they will require detailed study, but I should like to call attention now to three points.

First, they provide for the continued import of the full 1.4 million tons a year from the developing Commonwealth, and so are intended to honour the Lancaster House assurances in letter and in spirit. Secondly, they would enable the Community to participate very constructively in the resumed negotiation for a new International Sugar Agreement. Thirdly, they should provide scope for us to secure a justified increase in British beet sugar production as the Australian quota is phased out. I am glad to say that, although obviously all wanted a chance to study these proposals further, the will to honour the commitment to continue to import 1.4 million tons was evident in the initial comments of most Ministers.

The Council also discussed the reduction in cattle prices which has taken place recently. It was decided that import duties which are at present suspended should be restored if the average Community market price falls below 103 per cent. of the guide price for one week. The effect on United Kingdom retail prices should be marginally beneficial, since, although we should have to reintroduce import charges, these would be offset at the current value of the pound by the application of monetary compensatory amounts as subsidies on our imports. Exports from the Irish Republic both as stores and as fat animals which have recently been attracted away from their traditional outlet in the United Kingdom will be likely to revert to this country.

On protein feeding stuffs, the Council decided to put in hand the consideration of the possible diversion from intervention stocks of 50,000 tons of dried skim milk for use in pig and poultry feed between now and the end of the year if the need should arise, and also the possibility of expanding protein production in the Community. These matters will be considered further in the light of the outcome of the visit which the agricultural Commissioner, Mr. Lardinois is to pay to Washington this week and in the light of the protein supplies likely to be available from the USA and Canada.

I also raised briefly the question of welfare to animals in transport and at slaughterhouses. The matter is to be discussed now at official level and will be on the agenda of the Council for further discussion in September.

Mr. Shore

On the question of the sugar subvention and the continuation of it for the next year, we found the Minister's barely muted note of triumph on this matter a little odd. While there has always been deep concern on both sides of the House about the continued ability of this country to import 1.4 million tons of Commonwealth sugar after the beginning of 1975, it had never occurred to us that the question of being able to continue refining that sugar was in peril under the arrangements agreed only last January for between now and 1975. So we give the Minister two cheers for that, but if he had come to this House to tell us anything different there would have been a storm indeed.

On the major matter of the arrangements which follow from 1975, we have seen the proposals put forward by the Commission and we have noted that the Commission has proposed that the members of the Community should become members of the new International Sugar Agreement when it is negotiated. That is undoubtedly beneficial, but does not the Minister think, since the Continental Community was a net importer of sugar up to only five years ago that it is extraordinary that it should now be asking for an export quota of 800,000 tons of sugar?

On the continuation of the 1.4 million tons beyond 1975, we noted what the right hon. Gentleman said about the will in most Ministers to honour the commitment. Surely, however, what matters is whether this will to honour the commitment is felt by all Ministers. Will the right hon. Gentleman confirm whether the decision to be made in this matter, as opposed to the proposal, is one of those decisions that has to be made unanimously by the Council of Ministers?

Does the Minister not feel a slight sense of shame for coming to the House on the question of meat prices and telling us that he has come back with an agreement that if cattle prices fall for even one week below the level of 103 per cent. of the intervention price he will slap on again import duties of 20 per cent.? He then has the cheek to tell us that any benefit on prices would be cancelled out by the great increase in the costs of the common agricultural policy to which we shall soon have to subscribe.

Mr. Godber

1 am grateful to the hon. Member for his warm welcome on my return. On the question of the sugar subvention, he said that it was never understood that the subsidy might not continue. This was made clear in the House, to which I reported it on 28th March. It is a highly technical aspect, but the important thing is that all the Ministers immediately supported me when I described the problem which had arisen. That is an indication that all those Ministers believe that it is important that the Commonwealth sugar agreement should be honoured, and that is not without significance in regard to the whole position.

As for the position after 1975, it has proved that it would be right that the Community should operate as net importer. That I agree. The Commission is proposing that it should operate as a net importer, and that is the intention embodied in its proposals. We shall be having further talks at ministerial level about this. We have only just had the proposals of the Commission. But the important thing is that the Commission has said clearly that 1.4 million tons should be allocated for Commonwealth countries, and I am sure that the right hon. Gentleman will welcome that fact, as will his hon. and right hon. Friends.

As to the attitude of some Ministers, it is not unusual for them to query the whole question when there might be a case for some reduction in production in those countries. What matters is what we get at the end of the day and I believe that we shall get a confirmation in line with the Commission's proposals.

On meat prices it is not such a simple matter as the right hon. Gentleman suggests. What I said does not mean that there will be a 20 per cent. duty. We are concerned with a duty of 8 per cent. and the reimposition of this will mean a countering of the monetary compensation amounts so that the consumer will not suffer in this country.

Sir. D. Dodds-Parker

Is my right hon. Friend aware that his statement will give considerable satisfaction and encouragement to the Commonwealth sugar producers who have done such a wonderful job for this country and have helped themselves over the last 30 years? Will my right hon. Friend give guidance about the extent to which the proposed cut of about 600,000 tons in Continental beet production can be more than counteracted by the likely increase of 4 per cent. a year for the next two years?

Mr. Godber

There is a general welcome in the Commonwealth for the decisions taken on the initial problem and for the plan of the Community. I cannot give my hon. Friend a precise answer about the 600,000 tons, but there is a significant increase amounting certainly to more than 100,000 tons a year in consumption in the Community and there is at the present time an apparent world shortage of sugar which applies to this problem.

Mr. John Mendelson

Will the Minister also report to the House that the French Minister of Agriculture by his intervention and opposition has had a blocking effect on the proposal put forward by M. Lardinois? The French Minister in his opposition to the Commission's proposal said that the scheme for 1.4 million tons had never seriously been discussed between Ministers before. That is in complete contradiction to what the right hon. Gentleman and other Ministers told the House when this matter was discussed at the time the legislation was going through. Now it is revealed for the first time—and the right hon. Gentleman must come clean and admit it—that this was a one-sided announcement to which the French Government did not agree. M. Schumann said that he did not agree to it at the time and so the Minister's chickens are coming home to roost. What action does the right hon. Gentleman propose to overcome the French resistance, which will adversely affect the poorer Commonwealth countries?

Mr. Godber

Before the hon. Member gets too excited he should know that his facts are not correct. There has been no blocking action by anyone at this time. There have been some preliminary comments by all Ministers. It is for the French Minister to justify his own comments. He said that the present Council of Ministers had not been consulted on this figure. The figure of 1.4 million tons was constantly referred to by my right hon. and learned Friend when he was negotiating the Treaty of Accession and the House will recall what he said about the attitude taken by the Community over this matter. We have never hidden from the House our view that 1–4 million tons was right. At the last Lancaster House conference which I convened this year this was repeated. It has never been challenged. The fact that it has been accepted by the Commission and all the Ministers except one is significant at this stage.

Mr. Powell

What is it that has made necessary the subsidising of the refinement of sugar in this country? Is it in order to counteract the high level of world prices or is to counteract the effect of the internal workings of the common agricultural policy?

Mr. Godber

It is to do with the level of the entry price of sugar as determined in the discussions in the Council of Ministers in January this year. When it was agreed at that time, I said in the Council, and I reported to this House. that I believed that the figure which the Council wished us to accept did not give an adequate margin. I said that if that proved to be the case we should seek to have a national subsidy during the period between now and 1974 when the agreement comes to an end.

Mr. Arthur Lewis

Are we to take it that the possible adverse effects of the sugar decision will not operate until 1975, but that they may well operate then? As the decision can and probably will adversely affect the jobs of thousands of workers in my constituency and other constituencies, will the right hon. Gentleman give an assurance that before he agrees to anything further he will discuss the matter not only with the employers in the refinery industry but with the trade unions and the workers on the floor at the refineries in West Ham and the other parts of the country?

Mr. Godber

I think that the hon. Gentleman is confusing two matters. The agreement I have announced will not mean redundancy for anyone. There was and is a problem over a gradual switch in this country from reliance on cane to reliance on beet refining. I recognise the hon. Gentleman's genuine concern. I am in consultation with the manufacturers, and we have had consultations with the trade unions involved. I am happy to continue the consultations, because it is very important that everyone should understand the problem, and we want to find a fair solution.

Mr. Farr

I congratulate my right hon. Friend on what he has done for the sugar refiners' margins for this year. Can he assure the House that in any discussion with his ministerial colleagues in Europe he put to them just how vital it is that when the new international sugar agreement is signed the EEC should become a signatory, unlike the present position?

Mr. Godber

Yes, indeed, Sir. That is a point that I and my colleagues in Brussels have repeatedly put. Our view is that we should become parties to the agreement. One purpose of the Community document published a few days ago is to enable that to happen. It is our wish that it should happen. We should play our full part in seeking to achieve it.

Mr. Hooson

Did the agricultural ministers discuss the probable shortage of proteins and cereals for animal feeding stuffs during the coming winter, and its likely effect on food prices in this and other countries? In particular, did they consider that the retaliatory measure of the United States in banning soya bean exports was one of the contributory factors? What do they intend to do about it?

Mr. Godber

The hon. and learned Gentleman may have entered the Chamber after I made my statement. I specifically referred to that matter. We certainly did discuss it. It is a serious matter. Mr. Lardinois, the agricultural commissioner, is flying to Washington today for further discussions with the United States Administration about it. We take a serious view about it. I have referred to several actions we propose to take in the light of our discussions.

Mr. Scott-Hopkins

I congratulate my right hon. Friend on the satisfactory outcome of the preliminary sugar negotiations. Can he enlarge a little about beef? Would it be possible to negotiate to eliminate the compensatory payments if the tariff goes back on again when we reach 103 per cent. of the price?

Mr. Godber

It is a complicated issue. If the trigger mechanism, which is what I proposed, and which was accepted by the Commission, operates at the figure of 103 per cent., the tariffs will be reimposed Levies will not. Because of the present level of prices, tariffs will be reimposed and then monetary compensatory amounts will also be reimposed. They are now in suspense. My information is that for almost every cut that can be imagined. and certainly for main carcases, the effect of the monetary compensatory amount will cancel out the effect of the tariffs, so there will be no increased cost to be borne by the British housewife.

Sir G. de Freitas

Was not the French Minister of Agriculture also reported as having rebuked one of the commissioners for ignoring French national interests? If that is so, is it not completely contrary to Article 157 of the Treaty of Rome?

Mr. Godber

There were reports about that. The French Minister did not do that in the Council of Ministers. What is done in talks with the Press by individual Ministers must be a matter for them to defend and comment upon. The Press is always about, and the French Minister may have said something of the kind. But he certainly did not say it in the Council of Ministers, and it would be wrong for me to comment on it.

Mr. Burden

I congratulate my right hon. Friend on so quickly drawing the attention of the agricultural Ministers to the concern about the carriage and slaughter of animals exported from this country to the Continent. Did he get the impression that they were impressed and would act quickly as a result of the vote in the House last week? Will he give an assurance that there will be no interference, as a result of those discussions, with the Government's decision to suspend exports and to set up an inquiry?

Mr. Godber

I raised the matter. It is now on the agenda for official discussion, and will come back for detailed discussion by Ministers in September. I have taken the opportunity in private discussions with other Ministers to raise the matter, and have achieved a substantial degree of sympathy and understanding. I think that most of them genuinely want to avoid cruelty, just as we do. I hope that we can make progress.

Mr. Raphael Tuck

The Minister said that the French delegate did not adopt a blocking attitude. Are the reports that Mr. Chirac rejected even the limited concession accurate or inaccurate? If they are accurate, how can the right hon Gentleman hold out any hope for the future?

Mr. Godber

I do not think that the hon. Gentleman quite understands the procedures we go through. We had a general discussion on a document, and in that discussion the French Minister expressed his grave concern about the figure and said that he had not considered it. He said that he was disturbed by it He was entitled to say that as a point of view. But it was a sort of "First Reading" debate. We shall be having further detailed discussions, first at official level and then in the Council of Ministers. There is no question of a blocking statement. That is not the way the Community operates. People make statements, and finally one reaches an agreed decision. That is the normal way for the Community to operate. I do not think that that intervention, which was widely reported in the Press, should be given such a great degree of significance. What matters is that the Commission and eight Ministers all took the view that the figure was right, and I hope that we shall persuade our French colleague.

Mr. Marten

My right hon. Friend said earlier that the proposals, which were only proposals by the Commission, were accepted by all Ministers except one. But it is that one that finally matters, so, whatever result the Council of Ministers comes to on the question of the importation of 1.4 million tons, can my right hon. Friend give an assurance that Britain will, if necessary, unilaterally honour that undertaking?

Mr. Godber

I believe that the Community will honour it as such. That is the way in which we should proceed. To start giving undertakings about what would happen in a wholly hypothetical situation would be absurd. The Commonwealth has never asked for that. It understands the position and is opening its own discussions under Protocol 22 next week. We are giving it full support. To say anything of the kind that my hon. Friend suggests would not be helpful.

Mr. Shore

The Minister's last reply was not good enough. The whole proposition of joining the Common Market was put to the House on the basis of certain matters being absolutely firmly agreed, including the continued sale of 1.4 million tons of sugar. Will the right hon. Gentleman answer the question I put to him at the beginning? Is it his understanding that the decision on the Commission's proposal must be agreed by unanimous vote in the Council of Ministers, or can it be agreed simply by a majority?

Mr. Godber

The trouble with the right hon. Gentleman and others is that they are all the time trying to create the idea that there is a crisis in these matters. It is not a matter of confrontation. The way in which the Community works is that we reach agreed decisions. I am quite confident that the Community will reach an agreed solution which incorporates this figure. The fact that the 1.4 million tons is included in the Commission's figure is a strong indication. That one Minister has chosen to question it at this stage does not mean that it is undermined. I am confident that we shall achieve it.