HC Deb 03 July 1975 vol 894 cc1648-51
1. Mr. Charles Morrison

asked the Minister of Agriculture, Fisheries and Food what is the present disparity between the present rate of the green pound and the true value of the pound sterling; what the disparity was when last devalued; and whether he will now consider devaluing the green pound again.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart)

The difference between the representative rate and market rate for the £ sterling as calculated for the purposes of MCAs to be applied this week was almost 20 per cent. In February, when the last representative rate change was agreed, the gap was about 15 per cent. I refer the hon. Member to the reply I gave to the hon. Member for South Angus (Mr. Welsh) on 20th June.—[Vol. 893, col. 564.]

Mr. Morrison

Is the right hon. Gentleman aware that a further realignment of the green pound is necessary in order to restore confidence? Does he accept that, if this is not done, it will be virtually impossible for the Government to achieve any of the objectives set out in its recent White Paper? When does he intend to raise the matter with his European colleagues?

Mr. Peart

I accept that certain sections of opinion in the agriculture industry in this country would like a further move in this direction. In my reply to the hon. Member for South Angus I said that the effect of the United Kingdom representative rate was one of the questions that I was considering in current discussions with the agricultural industry. Representations have been made to me and I have had informal talks with the European Commission. I shall take note of everything the hon. Member said.

Mr. Torney

In discussing the question of the green pound with the Commission, will my right hon. Friend bear in mind that while a change might help the farmers it would have an adverse effect on the consumer? We are all agreed on the need to hold or reduce inflation. Does my right hon. Friend not agree that this would be a bad time to make such a change, because it would force up the price of food, particularly basic food, which we surely all want to avoid?

Mr. Peart

In matters of this kind I have to balance the views of producers and consumers. It is true that a reduction in the rate would affect consumers generally, and that even those buying feeding stuffs could suffer. This is another factor that I have to take into account.

Mr. Wiggin

Is the right hon. Gentleman aware that there is no need to obtain further agreement from Brussels to retain the level? The decision is in the Government's own hands. Is the right hon. Gentleman not aware that the British farmer is no longer content to see his wealth and investment being used for purposes which should be the responsibility of the Government? When will he deal with this matter? Will it, as it should, be before the end of the month?

Mr. Peart

I have considered the views of the producers and given a promise to the hon. Member who asked me to raise this matter in the Commission. I accept that it is my responsibility.

11. Mr. Brotherton

asked the Minister of Agriculture, Fisheries and Food what discussions his Department has had with the EEC officials concerning a devaluation of the green pound.

Mr. Peart

My Department is in close touch with the Commission on all aspects of the common agricultural policy, but there have been no formal discussions on the green pound.

Mr. Brotherton

Is the right hon. Gentleman aware of the serious implications of a partial devaluation of the green pound, particularly on wheat? Will he ensure that any agreed devaluation is to the full extent necessary to bring the green pound back in line with the £ sterling?

Mr. Peart

I cannot comment on that, because no agreement has been reached.

Mr. John Davies

Is the right hon. Gentleman aware that farmers generally regard the totally illusory exchange rate use for converting Community prices to British equivalents as being at the heart of their total disregard of the Government's policy as set out in the White Paper? Having regard to what the right hon. Gentleman said on the stocktaking document, will he ensure that his right hon. Friend the Leader of the House brings this matter forward for early debate, so that we can deal with it with the gravity that it deserves rather than in the cursory manner of Questions?

Mr. Peart

I do not dissent from the right hon. Gentleman's remark that this is an important matter. As I said, we have had no formal discussions in the Community on this matter, but there have been informal discussions.

Mr. Peter Mills

Will the right hon. Gentleman bear in mind that words, White Papers, discussions and consultations do not produce the extra food required by this country? Will he now start to take action and give the resources necessary to British agriculture, which can be done by helping with the green pound?

Mr. Peart

The hon. Gentleman is good at using words. I agree that all will depend on the resources that we put into the industry.

13. Mr. Hurd

asked the Minister of Agriculture, Fisheries and Food if, in the light of a continued fall of the £ sterling on the world markets, he will consider introducing a system whereby the green pound is automatically readjusted at regular intervals to ensure reasonable parity between prices received by United Kingdom farmers and continental farmers.

Mr. Peart

This is one of the questions raised by the Commission in its report on the stocktaking of the CAP which we are considering.

Mr. Hurd

When the Minister holds formal talks on this subject, will he put forward a proposal on those lines? Is the 20 per cent. gap, which he revealed this afternoon, between the true rate and the green rate, not at an intolerable record level? Why should farmers alone of the community have to pay a special and extra penalty as a result of the Government's failure to maintain the value of the pound?

Mr. Peart

The hon. Gentleman asks for automatic adjustments. We must consider the needs not only of farmers but of consumers and livestock producers, because of the monetary compensatory amounts which are paid.