§ 6. Mr. Biffenasked the Secretary of State for Prices and Consumer Protection what has been the beneficial impact of the green pound calculation of the Common Agricultural Policy for farm prices upon the Retail Price Index; whether she intends to seek to maintain this consumer advantage; and if she will make a statement.
§ Mrs. Shirley WilliamsThe green pound system reduces the price in the United Kingdom of most important food- stuffs, including cereals, beef, dairy products, bacon and other pigmeat products. It reduces farmers' incomes correspondingly, and adjustments to the rate have to balance the interests of producer and consumer.
16 The present gap between the green pound and the market rate for sterling is about 19 per cent., though the figure fluctuates according to the value of the pound. There can be no precise estimate of the effect on retail prices, because many other factors are involved. If the gap were completely closed and the United Kingdom guaranteed price for milk were adjusted correspondingly, the eventual effect on the retail food index might be in the order of 4 per cent to 5 per cent., and on the retail price index about 1 per cent. to 1¼ per cent.
§ Mr. BiffenI am sure that that answer has a false bottom, in the sense that the right hon. Lady did not seek to reply to the part of my Question which asked her whether she sought to maintain this consumer advantage. In view of the widespread and authoritative Press comment that there is likely to be a 5 per cent. devaluation in the green pound concluded at this week's meeting of the Council of Agriculture Ministers, will she confirm that this will, as a consequence, produce an impact of between £40 million and £50 million upon the retail price index? Will she further confirm that that will substantially obliterate the increase in food subsidies announced by the Chancellor? Will she tell the House how she views this likely development?
§ Mrs. Shirley WilliamsThe hon. Member represents a constituency with considerable agricultural interests—
§ Mr. BiffenAnd consumer interests.
§ Mrs. Shirley Williams—and he will therefore know that the job of any Government is to strike a balance between consumer and producer interests. He will also know that my right hon. Friend the Minister of Agriculture is presently engaged in a meeting of the Council of Agriculture Ministers which does not complete its deliberations until tomorrow. My right hon. Friend will be answering questions when he makes his statement to the House about the outcome of those discussions. Not only would it be improper for me to attempt to predict results at this stage; it would also be quite inaccurate.
§ Mr. DalyellIn the meantime, what can we usefully say to our NFU branches as to the time scale during which the gaps can be closed?
§ Mrs. Shirley WilliamsMy hon. Friend will be aware that no statement on that can be made until tomorrow, when my right hon. Friend makes his statement. The NFU, too, will recognise that there is a balance to be struck between consumer and agricultural interests.
§ Mr. PowellWill the right hon. Lady explain what is the beneficial impact of the difference between the sterling green pound and the Irish green pound, and what is the justification for maintaining it?
§ Mrs. Shirley WilliamsThere is a difference, as the right hon. Gentleman knows. He will be aware that the Republic of Ireland has pressed for there to be an adjustment of the rate all the way up to the market rate. This does not have the full support of Her Majesty's Government.