HC Deb 21 November 1974 vol 881 cc1535-44
The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart)

The Council of Ministers (Agriculture) met in Brussels on 18th and 19th November. The main decisions were to increase the New Zea- land butter and cheese prices under Protocol 18, to provide for a guaranteed return to our beef producers, and to settle the duration and price elements in the mandate for sugar negotiations under Protocol 22.

The Council decided on an increase of 18 per cent. in the cif prices for New Zealand butter and cheese imported under Protocol 18, with effect from 1st January 1975. I consulted Mr. Walding, New Zealand's Minister of Trade, throughout the negotiations. He has warmly welcomed the outcome and has been generous in his recognition of the help given by this country. The increase will not affect retail prices.

On beef, the Council accepted the need to provide an assurance of firm returns to beef producers in the United Kingdom. As from the beginning of this week we shall provide from our own funds supplementary premium payments as necessary to provide an assured return of £18 per cwt. liveweight, for the week beginning 18th November, increasing week by week to a level of £21.81 at the end of January. I am arranging for a Supplementary Estimate to be submitted, but in the meantime I will have recourse to the Contingencies Fund.

Certain limits are set to the maximum subsidies payable under this scheme, but with the degree of flexibility that will be available I am satisfied that we shall be able to ensure that producers actually receive on average the full target prices guaranteed.

Similar supplementary premiums will be paid on cattle and beef imported from the Irish Republic. There will be equivalent export levies on beef exports to other member States.

The beef market will also be supported by a limited form of support buying at relatively low price levels, beginning at £14.18 per cwt. at the end of November, and rising gradually to £18.54 at the end of January. The basic beef premium will not be paid on any beef sold into intervention. We shall not, therefore, be applying intervention either at the full level or as a permanent and continuous method of support, but rather as a way of protecting the market, and incidentally the Exchequer, against the sort of price falls seen in recent weeks. The guarantee to producers derives essentially, however, from the operation of the variable premium payments to them.

On this basis there is no question of a beef mountain being accumulated in the United Kingdom. Any beef taken into intervention will be canned as cuts or kept in frozen carcase form, with the intention of phasing it back later to our own market through normal commercial outlets.

This combination of measures gives beef producers the firm guarantee of returns for which they have asked, coupled with modest support buying which should have no significant effect on retail prices.

The arrangements will last until 31st January. Those operating from February will be decided in the context of next year's CAP prices. I intend to ensure that they give equivalent support to our beef industry.

On Protocol 22, sugar, the two outstanding questions were duration and price. On duration, the Council agreed that the principle of the guarantee to buy sugar from the developing countries will be valid for an indefinite period. The procedures for implementing it will be open to review if necessary and will in any event be reviewed before the end of the seventh year of the agreement. No amendments, other than quota adjustments in the event of shortfalls, will be made with less than five years' notice. These provisions are very satisfactory and give firm long-term assurances to the developing Commonwealth.

On price, the Council drew a distinction between the price guaranteed on a long-term basis and the price actually paid while world prices remain high. The guaranteed price will be negotiated within the prices applicable in the Community. But the Council recognised that in the exceptional circumstances of high world prices the price actually paid may exceed the guaranteed basic price by amounts to be negotiated between the sellers and the buyers. It also agreed that, if necessary, State guarantees may be given to the buyers in accordance with the opinion of the Commission. This should make it possible for prices to be paid which will bring the sugar to this country.

The combination of these measures, together with the statement of the Council secured last week by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, is sufficient to give our refineries the assurances they are seeking about supplies of cane raws to our factories. Clearly in 1975, and in 1976 if still necessary, the supplementary payments would automatically bring such sugar to the paying countries. There is thus no need to insist on quotas at this stage. Should the situation change later, we have the Council Declaration to the effect that the bulk of the cane raws will come here in accordance with the traditional flows of trade.

I made my agreement to these arrangements for beef and sugar ad referendum, so as to enable my colleagues to consider them thoroughly. This has been done and the Government have decided to accept the agreement. If the Dutch Government, which also agreed ad referendum, take the same course, the agreement reached will become definitive on Friday. I hope that this will be done, for I regard the agreements on sugar and beef as satisfactory both for the developing Commonwealth and for this country.

Mr. Pym

If the right hon. Gentleman regards the agreement on sugar and beef as satisfactory, the Opposition regard it as too little and much too late. The right hon. Gentleman's return to intervention proves the failure of his policy since March. He has said that the Council accepted the need to provide an assurance of firm returns to beet producers. It always has accepted that. It was the right hon. Gentleman who did not.

I welcome the fact that the right hon. Gentleman has restored at least a partial guarantee for the beef market. Does he now admit that the guarantees should never have been taken away? Under the previous Conservative Government there was the guarantee of intervention which the Labour Government removed. Does he begin to realise the appalling damage and hardship, and in some cases ruin, that has been inflicted upon many farming families and livestock enterprises as a result of his neglect throughout the summer and autumn? Should he not be overcome with a feeling of shame? Will he make his new scheme retrospective to the sellers of fat stock not just to Monday—morally it should be retrospective to 26th June—but to August?

Is the right hon. Gentleman aware that this scheme does nothing for the sellers of fat stock in the hill and upland areas who have already sold their stock? What will he do about them?

What is the amount of the subsidy to be paid by the British taxpayer to Ireland? What is the right hon. Gentleman's estimate of that? What does he estimate the effect will be on Irish imports? What has the right hon. Gentleman to say to the cattle men of Wales?

The last sentence of the right hon. Gentleman's statement on sugar reads: This should make it possible for prices to be paid which will bring the sugar to this country. What happens if it does not? What confidence can he give to the consumer that supplies of sugar will be adequate in 1975? What is the likely price of a 2 lb, bag of sugar in 1975?

Mr. Peart

I am amazed that the right hon. Member for Cambridgeshire (Mr. Pym) should wish to argue about guarantees. He knows full well that the major guarantees that safeguarded the interests of our producers for a long time were removed by the previous Conservative Government. There is no question of that. He knows full well that permanent intervention in the Community has not worked. That has been said time and time again. I believe that this agreement, as Sir Henry Plumb has said, is a major break through. The deal will bring back virtually a guaranteed support system which, I believe, will be welcomed by the farming community. It has been praised by the President of the National Farmers' Union and also by leaders of the unions in Scotland. I am surprised that the right hon. Member should always be such a carping critic.

Mr. Jopling

Will the right hon. Gentleman come to Cumberland?

Mr. Peart

I will go to Cumberland with the hon. Member for Westmorland (Mr. Jopling) at any time. I hope that he will make his speech standing up and not continue shouting and bawling from below.

From the point of view of the livestock farmer I believe that this is a good deal. I had to work within the dimension of the European Community.

Mr. Skinner

Why?

Mr. Peart

I shall come to that. The right hon. Member for Cambridgeshire knows full well that we agreed to have discussions on the beef régime in February. It is true that hon. Members on both sides of the House pressed me to try to get the Community to agree to some advance negotiations. I did that and I have secured this deal. It was not easy to get a new guarantee system to operate here.

I remind my hon. Friend the Member for Bolsover (Mr. Skinner) that the Government have given a pledge to renegotiate, and that after we secure terms we shall have to judge whether they are favourable. The Government have not accepted an "empty chair" policy. I believe that it is right and proper to seek the best terms for Britain and the best terms which I believe will satisfy the nation.

Mr. Pym

On a point of order, Mr. Speaker. May I ask the right hon. Gentleman to answer the questions I put to him rather than a question put by the hon. Member for Bolsover (Mr. Skinner) from a sedentary position?

Mr. Speaker

The right hon. Gentleman knows quite well that that is not a point of order.

Mr. Peart

rose—

Hon. Members

Answer.

Mr. Speaker

Order. There is to be a debate on agriculture on Monday. If the House is not a little quieter, I shall stop all questions on this subject forthwith.

Mr. Peart

I shall be only too pleased to answer the questions put by the right hon. Member for Cambridgeshire. He asked me for my estimate of the subsidy in relation to Ireland. It could be about £1 million. I do not know yet. But the Irish trade is linked completely with ours. Under the previous arrangements, conducted by both Conservative and Labour Governments, these subsidies have always been paid generally.

Mr. Cledwyn Hughes

Is my right hon. Friend aware that we on this side of the House warmly welcome the constructive settlement which he has just achieved, which will give a reasonably assured price to beef farmers over the interim period? Will he further take account of the problems of the stores producers, who are in an extremely difficult position owing to a severe shortage of fodder? What action does he propose to take to deal with their problems?

Mr. Peart

My right hon. Friend is quite right in saying that the fodder question is important, but it was not included in the package deal in Brussels. However, I have, of course, been in touch with the leaders of the farmers' unions and we are holding meetings to consider the situation. We have been trying to estimate where supplies can be obtained from and to where they should go. I assure my right hon. Friend that this matter is being urgently considered. I believe that the guarantee itself, which has been welcomed by the farmers' leaders, will have a tremendous psychological effect.

Mr. Hooson

Is the right hon. Gentleman aware that, in the desperate state of the livestock section of agriculture, he deserves a qualified and cautious welcome for the results of his negotiations in Brussels? If the Council of Ministers is now prepared to accept that British farmers need a firm assurance of price on their animals, why would it not have accepted that case six months ago? Or did not the right hon. Gentleman put the proposition to the Council then? Why did the right hon. Gentleman agree that the British taxpayer should pay on Irish imported cattle without imposing a 60-day limit?

Finally, when the right hon. Gentleman reached agreement with the Council of Ministers, did he do so on the principle that from 1st February he would accept an intervention price, when all the evidence from Ireland is that the intervention price has broken down completely there and that that is why Irish animals have been imported here?

Mr. Peart

For our discussions in February, I have reserved my position completely in relation to intervention. Other countries have reserved their positions for other reasons, France included. We shall have to await the negotiations. I am glad that the hon. and learned Gentleman has given qualified welcome to my statement. That is certainly a more constructive attitude than the carping criticism made by the right hon. Member for Cambridgeshire. I do not think that it would be helpful for me to comment further on the question of Irish cattle.

Mr. Torney

I congratulate my right hon. Friend on bringing back a measure of guaranteed prices into the beef market and on the fact that he has been able to achieve it despite the straitjacket placed around him by the headlong rush of the Conservative Government into the Common Market.

Can my right hon. Friend give a more definite assurance on the question of intervention? From his statement, it appears that this is only a token intervention. Does this mean that the Common Market now has its foot in the door towards the abolition, as it were, of our opposition to intervention? Does it mean that the Government are to adopt intervention? Many of us on this side of the House believe that that would be a very wrong policy.

Mr. Peart

My hon. Friend is right to put that question. The Government's belief, and policy, is that a guarantee system for a floor to the market—as I have brought about in this case through variable premiums—is a better system than the system of permanent intervention.

In relation to the major negotiations in February, which will lead to a settlement because of the beef year beginning on 1st March, I have entirely reserved my position. I give my hon. Friend that assurance. What I have announced today is a very small amount of intervention. I hope that my hon. Friend understands that with one other crop—potatoes—we have a support system but we also enable potatoes to be taken off the market through the form of intervention. That has been done.

Mr. Charles Morrison

Will the right hon. Gentleman confirm that in no circumstances will the return to farmers fall below £l 8 a hundredweight? If intervention is not to be at a full or permanent level, why does the right hon. Gentleman think that what he has said today will restore confidence in beef production?

Mr. Peart

Because I believe the word of those involved. I consulted the farmers' unions. I discussed frankly with them what they wanted and my own objectives. That is why I believe that the unions, having welcomed the deal, will get acceptance for it from the rank and file. I believe that this agreement represents a breakthrough in the sense that we have achieved, for the first time, after hard negotiations, something approaching the sort of floor to the market which came through our old guarantee system, not with the intervention system.

Mr. Buchan

I, too, congratulate my right hon. Friend on getting a guaranteed price and a deficiency payments system. He will not be surprised to hear me say so. As I have some reason for saying, it is about time. I congratulate him also on treating questions from the Tory Party as irrelevant, because it was the conduct of that party when in Government which put us into the present position.

Would not my right hon. Friend agree that the victory we have achieved is rather analogous to the position of a man who rescues himself from a noose into which it was rather unnecessary for him to place himself in the first place? Was acceptance of intervention the price we had to pay for this agreement? Would it not have been possible from last March onwards to achieve this position without paying a price which many of us feel pre-empts our decision next year with regard to the future of the Common Market?

Mr. Peart

As my hon. Friend knows, I have always held the view that we should have a floor to the market. I have put that view on a number of occasions in Brussels and Luxemburg. We could not have achieved this situation last March. It has taken a long time to convince other people that our approach is a good one. My hon. Friend knows full well that one country can block even a deal like this.

Without revealing what went on in the private, restricted sessions of the Council of Ministers, I can tell my hon. Friend that it was not easy to get agreement. At one stage, I thought that our concept of variable premiums, which means a guaranteed price system, would not be accepted. In the end, however, after long and hard negotiations right through the night, we achieved our objective.

Dr. Dickson Mabon

My questions relate to sugar. First, however, on behalf of the workers and representatives of management who are to see him tomorrow at his suggestion, I thank my right hon. Friend for his willingness to discuss the complexities of the situation.

I have three questions. First, is it true that the normally lower cane price will be brought up to the beet sugar price as a consequence of the agreement? Secondly, can my right hon. Friend confirm that the beet price and. therefore, the cane price will be reviewed upwards on 1st December? Thirdly, will my right hon. Friend explain his reference to State assistance, particularly for 1975 and 1976?

Mr. Peart

I should like to thank my hon. Friend. I am glad that he mentioned my meeting with the refiners, and particularly the trade unions. I was glad that today Mr. Wheatley, the convener of the shop stewards at Tate and Lyle, said: The onus is on the Government to settle for a fair price. The new deal appears to satisfy the basic demands for continued supplies of cane sugar for our refineries. As for the price, this is a difficult question, but the basic price will certainly be around the figure which has been mentioned in relation to the EEC target price. My hon. Friend may remember that I negotiated £140 per ton for Guyana. My guess would be that it will be in that region. But this is a matter for the Commission when it negotiates. Obviously, I cannot say what final price will be accepted, but I have had this mechanism put in through a Council Declaration that if world prices went so high over a period, it would be possible to get the sugar through special payments, for which we shall be responsible, and aids could be given to those organisations which buy the sugar for us.

Several Hon. Members

rose—

Mr. Speaker

Order. I am very sorry, but this debate must be continued on Monday.