GREEN POUND

HC Deb 31 July 1975 vol 896 cc2128-60

7.12 p.m.

Mr. Wm. Ross (Londonderry)

I wish to raise the question of the green pound and its impact on agriculture in Northern Ireland and throughout the United Kingdom. The term "green pound" is not one that endears itself to many representatives of Northern Ireland because green is the colour of Republicanism and in the eyes of Unionists is associated with all the false claims made by Republicans over the Northern Ireland territory and our jurisdiction over the people of Northern Ireland. We associate the Republican movement with deceit, and the term "deceit" could fit the green pound.

The green pound as a representative rate was conceived in the hope of levelling out farmers' incomes during a period when the currencies of the Common Market were on a fixed parity. Now we have floating currencies, and the situation has changed drastically against the interests of farmers. If sterling were strong, most of the ill effects of the green pound would disappear, but sterling is weak and has sunk like a waterlogged hulk in the world markets. It has sunk even faster than the reference rate has been reduced by the Minister of Agriculture.

The present disparity between the green pound and the real pound is a great help to consumers because food is cheaper than it otherwise would be. Food is being sold below its true value in the world markets. This is denying to the British farmers benefits that should be accruing to them through the floating pound if the representative rate were lowered along with the pound sterling. I think this is an attempt to buy popularity by depressing the price of food, but when this is done someone has to pay. Food has to be paid for, like all other products of human endeavour, and in this case the unfortunate farmer pays by having only a very low level of personal spendable income. The country will not get the level of investment in the farming industry that is needed for the future, and that will mean less food being produced.

During 1974-75 the net farm income in the United Kingdom was £1,133 million, but it must be realised that of this sum about £400 million was contributed by subsidies of various forms paid to farmers to depress the prices at the farm gate.

If the green pound were devalued to parity, prices to the consumer would rise, but not only to housewife consumers. They would also rise for farmers in respect of feeding stuffs, but we would know exactly where we stand and would have a true picture of the profits of our farms. It would cause further difficulties for those parts of the industry where a lot of feeding stuff is bought and it might not be very popular to talk about increases in the price of food, but the era of cheap food is over and has been over for a very long time. It is no good this Government or any other trying to mask that fact.

Efficient production means there have to be efficient and able men in charge of the production. That costs money, and the machines they use cost a lot of money. If this money is not forthcoming, the means of production will disappear and the able men will go elsewhere seeking employment in other industries. In the long run, the country will suffer because of the loss of food.

Between 1920 and 1925 and between 1951 and 1955, the price of food as a proportion of the income of the average family did not decrease very much—by only about ½ per cent. In the period since 1960 it has decreased a very great deal. Between 1951 and 1955 an average of one-third of expenditure was spent on food. In 1974 it was 18 per cent. I realise that it is only natural that food should take a lesser amount of the total family expenditure. This is a sign of increasing prosperity and rising standard of living, and the House must welcome that fact. But food is being produced by fewer people and with more efficient farm machines and much greater sums are being spent on the processing of packaged goods and convenience foods that housewives now buy. In these circumstances, given the pressing difficulties within the farming community and the long-term Common Market policy that everyone should pay the true price of food, we must assume that there is room for some expansion in the amount of national income spent on food. If we do not get that, we shall have a shortage of food.

When the United Kingdom and Eire first decided to devalue the green pound last September, Eire devalued it rather more than did the United Kingdom and a 4 per cent. gap appeared between the representative rates. The gap between the real value of the £ sterling and the green pound in the two countries is 14 per cent. in the United Kingdom and 11 per cent. in Eire.

Many problems arose in the border areas of Northern Ireland through the smuggling of pigs and, later, the smuggling of cattle and the illegal exportation of store cattle to and from Northern Ireland. To some extent some of the problems in the pig trade, though by no means all, have been solved, but at very great cost in terms of employment, output and income in the farming industry. The ancillary industries, especially the Northern Ireland bacon factories, have suffered a severe cut-back in employment.

From all that has happened, it is clear that the green pound, which started life as a sincere attempt to produce equity among the farmers of the EEC, has instead been used in this country to depress prices to the farmer, and it has been used by Eire to give its producers and its ancillary industries an advantage over their counterparts in Northern Ireland. Because of this we have no great love for the green pound. The Minister of Agriculture told me today that he could not say when the gap between the two representative rates would be closed since the rate in the Irish Republic was primarily a matter for the Government there.

When the policies of the Eire Government cause hardship to my constituents and the farming community in Northern Ireland, that becomes very much a matter of concern to me. It also becomes a matter of concern to this House, and, specifically, to the Minister of Agriculture. It is up to the Minister to apply such pressure as is needed to see that the inequities from which the farming community in Northern Ireland suffers vis-à-vis the Irish Republic are eradicated. We are glad when the Minister gets something for the farmers, but often he does not get what they need, and we are asking him to redouble his efforts in this direction.

The various problems which have afflicted Northern Ireland over the green pound would never have arisen if the British Government had made it their business to see that Eire did not get away with the throat-cutting operation they have employed against our farmers and ancillary industries over the last 12 months. In short, therefore, this device is disliked and distrusted by the farmer and the farming community. In Northern Ireland we like to talk about the "farming community" because the welfare of the farm worker is dependent upon the income that the farmer can get from his land. If the farmer does not make a reasonable living his employees cannot expect to be reasonably paid.

I have lived in a farming community all my life and I know of the low incomes of the farm worker and the farmer. We should make every effort to correct this deplorable situation. Farming is no longer a profession for the poor, the foolish or the stupid. Farming demands the very best of our people. It needs intelligent and able men who can work on their own initiative. They run the risk of danger from animals and machinery to an extent which is not normal in most industries. If we are to attract the sort of men we need into farming we must pay them the right sort of money, but we cannot do that if the price of food is unreasonably low.

The green pound is disliked and distrusted by the farmer. It is to some extent used to deceive the consumer about the true cost and value of the food. It masks the effect of our entry into the EEC and it is a foolishness that we would be better rid of as soon as possible. It was born a lusty and, its progenitors probably thought, a beautiful child, and that may have been the case when there were fixed parities and when everything in the garden was rosy. With floating parities, however, it has become a gross and misshapen child which we could very well do without.

7.25 p.m.

Mr. J. Enoch Powell (Down, South)

This extraordinary institution or contraption which has acquired the popular name of the green pound has been much too little investigated or discussed either in the Press or in this House. My hon. Friend the Member for Londonderry (Mr. Ross) has performed a service, assisted by whatever powers there be that determine the order and the subjects that are discussed upon the Second Reading of this Bill, in raising this subject at this early stage in the debate.

Perhaps it is some compensation for the sepulchral stillness of the Chamber on this annual occasion that hon. and right hon. Members representing constituencies in Northern Ireland are almost, if not actually, in a majority in the Chamber. I cannot say whether that is the future casting its shadow before it, but I am fairly confident that it is in anticipation of the time when there will be not 12 but 20 Members from seats in Northern Ireland forming an integral part of the Parliament of the United Kingdom.

My hon. Friend was correct in designating the green pound as one of those peculiar deceptions with which the Common Market and its procedures are festooned. It is not unlike the method of stopping the clock, of pretending that the day is not what the day is, that 13th January is really 31st December in the year last past. In the same way the green pound is the method whereby, for the purposes of the common agricultural policy, we pretend that the relative values of the respective currencies are not what they are today but what they were five, 10 or 15 years ago.

It is no wonder that we maintain a bureaucracy if ingredients so fertile of bureaucracy as this are being fed into the system. We might be prepared to tolerate this institution with a certain detached and amused contempt if this was a mere pretence which had no practical effect upon the life of our own people. Unfortunately, the clock, so to speak, has not been stopped at the same day for everybody. It is not 13th January for everyone under the green pound system. For some it is 20th January; and for others it is 11th January. This is carrying the propensities of the EEC for self-deception to a quite intolerable point.

I want to protest this evening, and I hope that my endeavours will result in a concrete reply from the Minister, not against the system itself—its absurdities can look after themselves—but against the inequity whereby a different green pound is prescribed for two countries which have the same rate of exchange. After all, this is quite indefensible. The purpose of the representative rate, of the green pound, is to offset the effect of a movement of the exchange rate. Now, the exchange rates of sterling and of the Republic's pound, as they are tied to one another, must by definition move together. The one thing therefore which one would have thought would be impossible—which is impossible in any justifiable scheme of things—is that there should be a substantially and lucratively different representative rate for the Republic's pound and for sterling.

Here, it is worth pointing out that the reduction by five points of the Republic's green pound and the sterling green pound has, as will be arithmetically evident, widened the real disparity and thus the damage which this inequity brings about.

It is entirely the business of the Government of the Republic whether or not they link their pound to the pound sterling. I shall continue in this context what has been my invariable custom over the years, in that I have never offered any public criticism—nor any private criticism for that matter—either of the Irish Republic or of the policies and behaviour of its Government. Never by one word have I done that, and I am not criticising them now in anything that I say. The Government of the Republic have decided, for reasons which they think good and sufficient, to tie the value of their pound to the pound sterling. It is not a decision of Her Majesty's Government. It is a decision taken entirely, as they are entitled to take it provided they bear the cost, by the Government of the Republic.

However, as these two currencies are tied together, we are entitled to demand that the representative rate applied to the two currencies shall be the same. I ask the Minister to admit candidly that there is no justification for this discrepancy or, alternatively, to explain to the House what that justification is. He must do one or other of those things. Either he says that this is unjustifiable in view of the fact that the currencies move together—in which case no doubt Her Majesty's Government will accept their responsibility for bringing the disparity to an end—or he satisfies the House why two currencies, which are automatically of equal value and which, whatever happens, automatically move together, should have different representative rates attached to them. He will be treating the House with scant respect—I am only defensively and preventatively saying this to him—unless he can come forward with one or other of those replies.

Let us consider a little further the consequence of this inequity combined with the tying of the two currencies. The Minister will probably point out that the British taxpayer and consumer have offset, by prices and payments, some, at any rate, of the effects upon the farmers of Northern Ireland—and not only upon the farmers, for the employees in the meat factories have also been prejudiced by this difference. We in this country have had to pay money—British taxpayers' money and British consumers' income—to offset those consequences.

What is, in effect, happening is that we are paying part of the cost, which should fairly fall entirely upon the Republic, of their decision to keep their pound tied to the pound sterling. For what would be the justification put forward—if there were one—for the disparity between the two green pounds? It would be that the real value of the Irish pound is not the same as that of the pound sterling, but is lower, and that this equation—this tying of the two exchange rates—is therefore fictional. That is the only ground on which anyone can begin to justify a difference between the two green pounds.

However, in that case the cost of maintaining a currency at a false level—something of which this country has had costly experience over the past 25 years—ought fairly to fall upon the government which decides to do it, and that is the Government of the Republic. Because of the setting of the green pound within the framework of the EEC, we in this country are bearing the burden of the false assertion which underlies the parity of the Republican pound and the pound sterling.

I repeat that this is not the fault of the Republic.

I do not accept what my hon. Friend the Member for Londonderry was told—that the representative rate is a decision of the Irish Government. It is not. It is the decision of the EEC. I am not blaming the Irish Government, any more than they have any justification for blaming us for our representative rate. These representative rates are fixed and imposed upon us by the EEC. Therefore, the Republic, although in a sense a beneficiary, is totally guiltless. I am offering no criticism whatever of the Republic and its Government in this context. What I am saying is that the disparity in the green pounds piles fiction upon fiction. It piles upon the fiction of the whole system of representative rates the fiction of an inequality between the Irish pound and the pound sterling which does not correspond with the facts, and it imposes the cost of those fictions first upon the farmer, then upon the consumer, and then upon the taxpayer in Northern Ireland and the rest of the United Kingdom.

I turn to the question of what is to be done about it. The Minister of Agriculture returned from Brussels a week ago, as he always does, almost irresistible in his bonhomie. "You cannot", said he, "do anything but overwhelm me with garlands." Whenever he comes back from Brussels he says "Look what I have done for you." There he was, asking for credit because he had actually got a five-point increase in the monetary compensation amount, although, as the Republic received the same increase, the disparity was not merely maintained but, in practice, increased.

I ventured on 24th July, in the middle of all these rejoicings, to inquire whether the right hon. Gentleman and his colleagues had taken the opportunity to correct the anomalous and indefensible difference between the sterling green pound and the Irish Republican green pound and if not, why not. Now, that is not the sort of question which the Minister of Agriculture ever answers. One of the methods by which, to the delight of us all, the right hon. Gentleman has survived so long, has been a member of one Cabinet after another, has occupied one distinguished office of State after another, is to adopt the invariable rule of never answering a question. Indeed, it is a great safety and protection against making mistakes; and so endearing is the way in which the right hon. Gentleman does it, that we find it comes hard to do what I do now, namely, draw attention to the fact that he has not answered the question. It is the question which will be answered from that Box in a few minutes by the Minister—whose colleagues, however, from their gaiety do not seem to be entirely sure that he will make it.

I should like, however, just to quote the non-answer I got from the Secretary of State. It is very typical. He did not answer my question, "Did you try to correct the anomaly?". He said I believe that the move that we have made will help. In other words—"Rejoice! Look what I have done for you. I shall not answer your question. I shall invite you to praise me for what I have done." I believe that the move we have made will help"— the right hon. Gentleman said— I accept that Northern Ireland is in a special position, with the possible problem of smuggling because of the differential."—[Official Report, 24th July 1975; Vol. 896, c. 796.] It happens on a vast scale every week, so he is certainly right in saying it is "possible". I must agree with the right hon. Gentleman there. What can one do with a Minister who admits that there is an unanswerable case against him, who agrees with those who put it, who declines to answer their question, and then—and he is never disappointed—asks for the praise of the House?

Well, that was the answer I got from the right hon. Gentleman. However, this matter goes far beyond the green pound and agriculture; it goes to the nature of Britain's membership of the Common Market. What we have never been told is whether the right hon. Gentleman and the Government tried to get this anomaly put right and failed. If they did not try, they are greatly to blame. If they tried and failed, we know whom to blame. But we must be told.

It is one of the almost inconceivable anomalies of the EEC—inconceivable to us in this House—that its legislature, the Council of Ministers, debates and legislates in secret; for the fact is that 5 per cent. put on the green pound is a law, and we are bound by it. The EEC's laws emerge from the womb of secrecy. Apart from an odd leak from the French member of the Council of Ministers to the French Press in Brussels, we are never privileged to know who said what, what case was put forward on our behalf, who opposed it and on what arguments they opposed it.

Just think of the analogy if this House were to promulgate laws and then, when the citizens inquired "Was this the idea of the Labour Party or the Conservative Party, and did our representatives in Parliament vote for it or not?", they were told, "You are not to know that. You just obey the law and like it." We should not be long without a revolution. That is a real analogy to what happens in the Council of Ministers, and what happened in this case.

I shall invite—with slightly less confidence—the Minister who is to reply to the debate to be a bit French, to take a leaf out of the French book. Just let us have a leak. There are not many people around. Let us have a disclosure. Let him chance his arm.

Mr. John Lee (Birmingham, Hands-worth)

Will the right hon. Gentleman give way?

Mr. Powell

Just a moment—this is not my peroration yet. Naturally, if the right hon. Gentleman, who understands perfectly well the damage that is done to all interests in this country by the disparity between the two representative rates, has asked that it should be eliminated and the Council of Ministers would not do it, we shall know where we stand and whom to blame. But until we are told that, I am afraid that we shall have to assume, we must assume, we are invited to assume, that the right hon. Gentleman who has agreed to this thinks it is right—that, despite the right hon. Gentleman's words, he is satisfied that there should be this injustice and disparity, and that 5 per cent. was all that he went to Brussels to ask for.

So there is another alternative to be resolved by the Minister when he comes to stand at the Dispatch Box. Did the right hon. Gentleman ask for this to be put right or did he not ask for it to be put right? Did he say "Five per cent. on ours and 5 per cent. on that of the Republic, that is OK", or did he say, "This is an intolerable unfairness and we want it removed"?

Mr. Lee

The only point I wanted to make was to reinforce what the right hon. Gentleman was saying. That is that there is yet another reason for belated candour, and that is that the referendum is safely out of the way.

Mr. Powell

Yes. We had hoped that there would be more improvements than there have been, once that fateful landmark was passed. However, we still have the power, although degraded in this assembly, at any rate to address ourselves to the second-class Ministers of the United Kingdom who go to Brussels from time to time to negotiate and to accept the best that they can get there. What we are saying in this debate is that what they have got in the matter of the green pound is not good enough. It will not satisfy the people of this country and it will not satisfy the people of Northern Ireland. In this debate we give notice of that fact.

7.46 p.m.

Mr. Geraint Howells (Cardigan)

Before I comment on the green pound and its effects on the agriculture industry, I think I may be forgiven tonight, being a hill farmer myself—and here I declare my interest—for indulging in some congratulation and praise for the agriculture industry.

I do not believe that I am in any way prejudiced when I say that agriculture is one of the most efficient industries in Britain. It is generally accepted that it has a dedicated and knowledgeable work force. There are few jobs that give more satisfaction to the participants, be they employer or employed, than farming. When weather conditions are against us—which is often enough—and when we fail to get the right price for the products which we have worked so hard to produce, we are often tempted to give up. In the end, however, the majority of agriculturalists realise that farming is a way of life and provides such deep satisfaction and enjoyment in many ways that we stay on, despite the green pound. Another factor that keeps us on the land, despite the green pound, is the realisation not only that we are efficient and hard working but that our industry is absolutely essential to the well-being of the nation.

In a recent White Paper entitled "Food from our own Resources" the Government have encouraged us to make every effort to increase production so that we need to import less and so improve the national balance of payments situation. Britain now depends on the farmer to deliver the goods, and he has a certain pride, I am sure, which will spur him on to greater effort. More than ever the industry needs capable and well-trained young entrants. Production methods are becoming more and more sophisticated, and it is important that we should welcome all the bright young men and women who possess the up-to-date knowledge to supplement the wisdom and experience of those already in the industry. I believe, for example, being a hill farmer, that production on hill land could be improved by at least 100 per cent. with the latest scientific help and the knowledge that we have. This is especially important to Wales.

During the last few years we have lost a great deal of our work force. Many of the young people have left the land.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. The hon. Member is creating some difficulty for the Chair. It seems to me that so far his speech has been a recruiting speech for people to become farm labourers or farmers. I do not see that he has related it in any way to the subject matter under consideration.

Rev. Ian Paisley (Antrim, North)

On a point of order, Mr. Deputy Speaker. Surely on a Consolidated Fund Bill it is in order to speak in this House on anything, and it is only by procedures in the House and precedent that the subject before the House is adhered to.

Mr. Deputy Speaker

No, I think that the hon. Gentleman is mistaken. What we are discussing is the green pound differential—Class III Votes 3 and 7, Class XV Vote 4, Subhead B1. That is the subject under discussion. I am sure that the hon. Member knows what is contained within the limits of the item I quoted. I do not think that we should start a general recruiting campaign for farmers.

Rev. Ian Paisley

Further to that point of order, Mr. Deputy Speaker. Agriculture is covered in the item you quoted. Therefore the hon. Gentleman can roam as far as he likes on the subject of agriculture.

Mr. Powell

Further to that point of order, Mr. Deputy Speaker. The reference to the class in this paper is an indication that the subject in question is within the totality of what is covered by the Consolidated Fund (Appropriation) Bill. I submit with great respect that it cannot limit what an hon. Member may say, however inconvenient for others, within the scope of the convenient compartmentalisation of these debates, although I am sure that we all hope to hear the views of the hon. Gentleman on the subject of the green pound.

Mr. Deputy Speaker

I agree with the right hon. Member, who strikes the right note when he says that it is for the convenience of others if there is to be a wide-ranging debate dealing with the advantages and joys of being a farmer, when we are discussing the green pound. However, if hon. Members wish to continue in this way, let them do so.

Mr. Howells

The green pound has a great deal of effect on young entrants into agriculture. The nation's survival depends on the amount of food we produce from our land. Since 1960 the farming labour force has declined from 505,000 full-time workers to 233,000. That is a decrease of 50 per cent. That makes me wonder why we are not allowed to speak on the important subject of agriculture on this occasion.

Mr. Deputy Speaker

We are not discussing agriculture. We are discussing the green pound differential. Perhaps at some point the hon. Member will take a sniff at which is being discussed.

Mr. Howells

Perhaps I shall now baffle you, Mr. Deputy Speaker, with figures concerning the green pound such as the 5 per cent. change and the effect of the devaluation of the green pound on agriculture.

The green pound is the exchange rate between sterling and the EEC's notional currency and is the unit of account for agricultural purposes. Hitherto the rate has been fixed at 1.96178 units of account. The effect of the 5 per cent. devaluation, which has now been agreed, reduces the rate to 1.86369 units of account to the pound. To put it the other way round, one unit of account is now equal to 53.66p.

The new rate affects all the agricultural aid arrangements given in terms of the unit of account. My main interest is the EEC hill farming directive. The effect of the new rate will be to increase the value of the 50 units of account per livestock unit from £25.50 to £26.83. As for the purposes of the directive, a sheep is regarded as 0.15 of a livestock unit, this will have the effect of increasing the maximum allowable payment from £3.83 to £4.02.

I turn to the production grants directive on mountain and hill farming and farming in certain less favoured areas. The directive will allow annual payments up to a maximum of 50 units of account. Before devaluation the relevant figure was £25.50. The figure is now £26.83. Bulls, breeding cows and other cattle over two years old are treated as being one livestock unit. A ewe is defined as 0.15 of a livestock unit. Therefore at the current level of the green pound the maximum payment per ewe is now £4.02. However, if devaluation had taken place at 10 per cent., the hill farmer would be entitled to a maximum of £4.25. Such a degree of devaluation would not be unreasonable. If the hill farmers of Britain were entitled to that extra money, it would help to increase production from the hill land of Britain.

Last week I tabled one Question to the Minister of Agriculture, Fisheries and Food and another to the Secretary of State for Wales. Unfortunately, I was told, Welsh milk producers receive less for their milk ex-farm than do their counterparts in the rest of Britain. I hope that the Minister will consider this matter, as Welsh dairy farmers are entitled to a price which is comparable to that paid to other milk producers in the United Kingdom. Other marketing hoards do not allow any disparity in the prices paid for produce coming from the north of Scotland, the south of England, Northern Ireland and Wales clue to extra administration and transport costs.

I asked the Minister to say whether British milk producers would receive less for their milk ex-farm when compared with prices paid to EEC milk producers. The Written Answer stated that ex-farm producer prices for milk in the United Kingdom were on average lower than in the rest of the Community, although up-to-date official statistics for the Community as a whole were not available. Now that we are, for better or for worse, full members of the Community, farmers should be given the right incentives and the same prices for their produce. I believe that there is a great future for agriculture, and I am proud to be a farmer.

The President of the Farmers' Union of Wales wrote to the Minister of Agriculture on 29th July 1975. I am sure that he expressed the view of all farmers' unions leaders in Britain, when he wrote: As President of the Farmers' Union of Wales, I have to convey to you the anger and anxiety felt by farmers in membership of my Union at the inadequacy of the measures recently negotiated at Brussels for revising the 'Green Pound' representative rate. To the same end, I have already written to the Secretary of State for Wales. The anger and anxiety felt by Welsh farmers arise from three causes. In the first place, there is a strong awareness of the injustice of the disparity between the returns received by them and those received by their counterparts in other member States of the EEC, which is compounded by the availability of large subsidies to those European producers who wish to export to Britain and thereby undercut the British farmer's market. For instance, cattle prices in West Germany are about 50 per cent. higher than "guaranteed" prices in Britain; the difference is about £12 per live cwt. Rubbing salt into the wound is the fact that the same amount of subsidy is available to those who export cattle from West Germany to Britain, of which £7.07 in the current week arises from the fact that, by the mechanism of the "Green Pound", Community prices are translated into British currency at a completely artificial rate of exchange.

In the second place, farmers had been led to believe by the publication of the White Paper "Food from our Own Resources" that the Government genuinely desired to see British agriculture fulfilling its economic potential by expanding its production of several important commodities. As recently as the Royal Show, the Prime Minister seemed to be reaffirming this intention. The recent Brussels determinations, however, would seem to indicate that the Government, in its justifiable anxiety to attack the scourge of inflation, has mistakenly decided that its proper course of action is to give absolute priority to keeping food prices down in the short term, whatever economic penalties may have to he paid in the next few years."

I do not want to bore you, Mr. Deputy Speaker, but I could continue for a long time.

Mr. Deputy Speaker (Sir Myer Galpern)

The hon. Member is certainly not boring the Chair. I have decided to become a farmer.

Mr. Howells

To continue with the letter: The Minister of Agriculture and the officials of his Ministry must know perfectly well that such a policy is mistaken, and ultimately destructive. Agriculture is Britain's largest production industry, and the country's prosperity depends almost entirely upon the amount that is produced on the farms and in the factories, and upon the amount of energy that is produced. I should like to refer to the comment of the Chairman of the Milk Marketing Board, Sir Richard Trehane, as reported in the Western Mail: … milk producers are disappointed that the 2.2p rise from September—equal to only 1.19p averaged over the whole year—will not regenerate cash reserves or confidence and will not halt the flow of producers out of the industry. It seems that the only hope that Sir Richard and the union leaders can hold out is to persuade the Government that the 5 per cent. reduction is an interim measure which must be backed by further action in the autumn. I hope that the Minister will give an assurance to milk, beef, lamb and other producers in Britain that they will not be neglected now that Britain is a full member of the Community.

8.3 p.m.

Mr. Mick Buchanan-Smith (North Angus and Mearns)

I agree with what the hon. Member for Cardigan (Mr. Howells) said, but I should hate you to be under any illusions, Mr. Deputy Speaker. Under the present Government and the policies they are following I humbly suggest that it would be very dangerous for you to become a farmer. If you read carefully the proceedings of the debate, and contemplate them over the weekend and possibly during the recess, you will realise that the outlook is not rosy. If you have ambitions to enter the farming industry, I recommend you to wait until there is a change of Government.

Mr. Deputy Speaker

I thank the hon. Member for giving me that advice. If he is here this weekend I shall have a general discussion with him before I become a farmer.

Mr. Buchanan-Smith

I am glad to hear that, Mr. Deputy Speaker. I should not like to sit silent throughout the debate feeling that you were contemplating putting your hand to an enterprise which you might later regret.

This has been a useful debate and I congratulate the hon. Member for Londonderry (Mr. Ross) on raising the subject. When we debated agriculture on 14th July many hon. Members on both sides of the House, including the hon. Member for Londonderry, raised the subject of the green pound and the relative currency values of the Common Market countries in relation to agriculture. The timing of that debate was appropriate as it was just before the Minister of Agriculture went to Brussels. We hoped that the right hon. Gentleman would go to Brussels strengthened by the feelings that had been expressed in the House and knowing that hon. Members of all parties backed his resolve to return with a deal that was right for agriculture. But, unfortunately, he did not come back with a deal that served properly the interests of agriculture. The debate today gives us the opportunity, soon after the Council of Ministers' meeting, to comment in more detail on the results of that meeting. I know that I can rely upon the Parliamentary Secretary to report to the Minister how strongly we feel.

The right hon. Member for Down, South (Mr. Powell) said that he was more concerned with the consequences than with the system of the green pound. I, too, am concerned about the consequences. The green pound system is not wholly inappropriate, in that when changes occur in currency levels it is important for agriculture and for the consumer that there should be a traditional period of adjustment to the changes. What worries the right hon. Gentleman—it certainly worries me—is whether that opportunity for a transitional period is being used as an excuse for making the system permanent for completely different reasons. That is what is wrong, and to that extent I criticise the Government for a misuse of the green pound system and relative currency values. However, it is to the consequences rather than to the system that I shall address my remarks.

I ask the Minister to reflect on the difficult position in which the Government have put the agriculture industry by the very small movement they have made in trying to adjust the currencies and remove the disparity of the green pound. Agriculture is the only industry in the country which has had to bear the full effects of devaluation of the pound sterling and all that it has meant in the increased cost of imports, fuel, fertilisers, machinery and so on while at the same time the prices which the producer gets and the support he receives have been held down at an artificially low level. That has put the producer in a unique position.

Given the artificiality of the green pound and the Government's inability to tackle inflation which has led to devaluation, the responsibility lies fairly and squarely at the Government's door. The remedy lies within Government hands. If they are prepared to agree to an adjustment of the green pound, that will help immediately to remedy the situation.

It is true that the Government have gone a certain way towards that, and I suppose we must be thankful for small mercies, but I beg the hon. Gentleman to realise that the Government have not gone far enough. My great worry is that this disparity is in danger of becoming a permanency. If it becomes a permanency, long-lasting damage will be done to agriculture. If agriculture is damaged in that way, not only the producer but the consumer will suffer. If the inadequate returns to producers cause supplies of home-grown food to be reduced, consumers will be held to ransom because of scarce supplies on the world market. At the same time, if we have to buy more imported food that will put a strain on our currency reserves. Not only the consumer but the whole economy will suffer as a result.

Having pointed out the difficulties in which the Government have put the industry and the consumer by their failure to make better adjustments in the value of the green pound, I accept that they faced a difficult choice. Unfortunately, they did not have the courage to come to the right decision. They have been split in two on the issue. They wanted to keep the fiction of the disparity, because that helped to keep the price of food to the consumer down to an unrealistic level. But one of the effects of that is a lower price to the producer.

I beg the Government not just to consider the short-term arguments. At a time of economic difficulty it is wrong to look at only one side, to look only at the short-term interests of the consumer. The Government are deceiving the housewife and the majority of voters if they suggest that by taking short-term action to appease the consumer they are serving the long-term interests of the consumer. If they persist in their policy, the consumer may well benefit now but will pay in the future. The responsibility must rest on the Government.

The debate on 14th July served notice on the Government that we expected the Minister to do rather better when he went to Brussels to try to deal with the fiction concerning the green pound. The objective must be total parity eventually. We are not asking for a great deal. As a transitional arrangement, this system has something to commend it. We are not asking that we should immediately go the whole way to parity, but a more realistic step should be taken. Movement towards greater parity might take place over a longer period, because of the effect on the consumer and so on.

Right hon. and hon. Members referred in this debate to the consequences for the producers. What the right hon. Gentleman achieved with his 5 per cent. was a pittance for producers. The right hon. Member for Down, South said that the Minister of Agriculture never answers questions and as a result never makes a mistake. Perhaps that lesson should be spelt out to the Secretary of State for Energy, who might find life slightly easier that he will find it over the next seven days.

I particularly ask the Parliamentary Secretary to answer the question put to him by the right hon. Member for Down, South on precisely what his right hon. Friend tried to achieve at Brussels. The House deserves to know whether the fault for not achieving what is right for the consumer and the producer rests with the right hon. Gentleman or with the Common Market. A mistake has been made, and we want to know how to apportion the blame. Does it lie with the British Government or with the Council of Ministers?

My information is that if the Minister had been prepared to ask for a bit more he would have got it, and that most of the Ministers of Agriculture of the other countries no more like the disparity and fiction of the green pound than we do. I believe that that is true of Eire as well as other countries. They no more want this fiction continued than we do. I believe that if the Minister had been more pressing in Brussels he would have found himself pushing at an open door and would have been able to obtain a great deal more than he asked for.

Rev. Ian Paisley

I am sure that the hon. Gentleman is not suggesting that the representative from Dublin would have been happy to give way on something that has been to the enormous financial advantage of the farmers in Eire. It may be true of the other representatives, but it would not be true of the representative from Dublin, who has wiped the eye of the British Government on this issue.

Mr. Buchanan-Smith

That is precisely what worries me. The British Government are getting the thick end of the stick. If they had been prepared to stand up for our interests, we could have seen very different results. Therefore, I hope that we shall have an answer to the one direct question that has been put to the hon. Gentleman, to which the House deserves an answer.

I wish to speak next particularly about my own interests in Scotland, to try to drive home to the Government just how serious have been the consequences of their failure to achieve a proper adjust. ment of the green pound. The hon. Member for Cardigan quoted from Sir Richard Trehane, Chairman of the Milk Marketing Board. In his forceful statement Sir Richard also said that the Government must realise that if it is to get the extra milk and dairy products it asked for in its White Paper 'Food from our Own Resources' —milk which the country desperately needs —then a further substantial award must be made well before the winter sets in. That underlines the inadequacy of what the Government achieved. After the Brussels meeting, the President of the NFU of Scotland, Mr. Fraser Evans, said of the closing of the gap in the green pound by 5 per cent.: it is a totally inadequate, shortsighted, foolish decision which will further damage the national interest at the precise moment when this country so urgently needs to build up the productive capacity of efficient industry. What he said has been repeated in the same tone by the Scottish Milk Marketing Board, and by the chairman of the milk committee of the Scottish NFU, Mr. Christie. Similar words have been used by farmers' leaders throughout Scotland. England, Wales and Northern Ireland.

I would refer briefly to the situation in the beef industry. That worries me most of all as it affects Scotland. I am sure that it worries the hon. Member for Cardigan, who represents a hill area, and producers in Northern Ireland, who rely to a great extent on the production of store stock. I am sure that the Minister, with his farming background, and having been brought up in a store-producing area will be sympathetic to what I have to say. The prices at the autumn store sales are the only source of income for many farmers during the year. If they have the hammering—I use that word advisedly—that they received last year, the consequences for them and their families will be appalling in the coming winter. If prices are not adequate, many of them will have to go out of production and lose their livelihood in the next 12 months. That is why it is particularly important that the price of beef shall be at a proper level. Those in areas fortunate enough to have the food to fatten the animals should give proper prices to our store producers.

Here I do not quote from the NFU or those looking directly to the industry for their livelihood. I wish to read from a report in the Scotsman yesterday of the announcement by Professor Hall, Professor of Agriculture at Glasgow University and Principal of the West of Scotland College of Agriculture, of the financial results of the two hill farms operated by the college. Those results are a fair reflection of what happened in the hill areas in the past two years. These are large firms operating on a large scale.

In the Scotsman yesterday Professor Hall is reported as saying that in 1973 those two farms produced a profit of £11,000. He admits that the figures were boosted by inflation. They were very good figures from well-managed farms. Between 1973 and 1974, that profit was turned into a loss of £3,000. This demonstrates the tremendous down-turn in fortune. Professor Hall says that the conseqeunce of this down-turn was due not so much to what was happening in the sheep market but to what was happening in the beef market. He went on to say: The college are now seriously reconsidering the place of beef cattle on the hills". When organisations like the West of Scotland College of Agriculture are considering taking their cattle off the hills, how many more smaller farmers will have to do the same thing? If they do it throughout the country, it will be the housewives who will find that supplies of beef are short and that the price of beef will rocket. We shall have to import more from abroad, with all the adverse consequences that that will have on our foreign exchange dealings.

We gave the Minister of Agriculture the benefit of the doubt on 14th July. We hoped that he would go to Brussels strengthened by the resolution of the House of Commons. He returned with far too little. As the right hon. Member for Down, South has said, for far too long the right hon. Gentleman has not answered our questions. For far too long he has tried to palm us off with a lot of worthless platitudes, saying that he understands the industry, and what we need in the industry. He talks about meaningful action.

I wish that the right hon. Gentleman were here tonight. Far too often he has used phrases like "I am looking at this" or "I am watching that. I agree with the hon. Member". We would all wish him well in the House and away he would go. He returned full of pleasure with what he had achieved. But he has obtained far too little for the industry. He has not fulfilled his promises. Instead of looking and watching, he should give us some leadership. He must give the industry the returns and conditions under which it can operate profitably in the in the interests of the nation.

During the period while the right hon. Gentleman has been negotiating in Brussels we have seen the industry move from a mood of expectation to exasperation. We have seen the industry drift and sink from doubt to despair. In the face of the strong feelings on all sides of the House, the Parliamentary Secretary should tell his right hon. Friend that in future, if he is to satisfy the House, he must do a much better job in Brussels than he has so far done.

8.25 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang)

I am grateful to the hon. Member for Londonderry (Mr. Ross) for raising the problem of the differential between the United Kingdom green pound and the Irish green pound. I agree that serious practical problems emerge from this disparity. I do not think it is surprising that some hon. Members, in particular the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) should have used this debate, which is basically about the differential between the two green pounds rather than the general position of the United Kingdom green pound, to express their views on the settlement that my right hon. Friend brought back from Brussels and to comment on the adjustment which he secured in the United Kingdom green pound—or the representative rate as it is more frequently called in the Community.

I begin by seeking to explain as precisely as I can how the present situation has arisen. The common agricultural policy provides for prices to be fixed in units of account and for these to be converted into national currencies at fixed conversion rates, known as representative rates or green currencies. Any difference between the actual market rates and the representative rates has to be bridged by the application of monetary compensatory amounts in trade. The market rate for the Irish pound is, of course, the same as that for sterling. From the date of our entry into the Community until October last year, the United Kingdom and the Irish Republic also had the same representative rate. There was, therefore, no need for monetary compensatory amounts in trade between the two countries, though both the Irish Republic and the United Kingdom operated monetary compensatory amounts as import subsidies and export charges on trade with other countries.

In October 1974 the Irish Republic and the United Kingdom both made downward adjustments in representative rates, the Irish by rather more than ourselves. This required for the first time the introduction of monetary compensatory amounts on trade between the two countries equivalent to a net subsidy on imports into the United Kingdom from the Trish Republic of about 3 per cent. Further changes were made in February this year which increased the net subsidy to about 6 per cent. The decision taken by the Council last week to make a further 5 per cent. adjustment to both rates has made very little difference to the situation. From 4th August the net monetary compensatory amount subsidy on imports from the Irish Republic will be about 5.6 per cent.

I may say in passing to the hon. Member for North Angus and Mearns that the green pound is not simply part of the transitional arrangements.

Mr. Buchanan-Smith

I did not say that.

Mr. Strang

The hon. Gentleman said on two occasions "The green pound as a transitional arrangement has something to commend it".

Mr. Buchanan-Smith

May I correct the Minister? I was not using the phrase "transitional arrangement" in the specific sense in which it is used in the negotiations. I was using it to deal with the situation when values change. I apologise if I misled the hon. Gentleman.

Mr. Strang

I am grateful for that clarification. What the hon. Gentleman is saying is that the representative rate should be adjusted at intervals to keep the market and the representative rate close—I presume to within 1 per cent. or 2 per cent.

Mr. Buchanan-Smith

What I am saying is that as currency values change, whereas in relation to other commodities the change in the values takes place immediately for reasons of good production and so on, these changes should be cushioned over a certain period. I was criticising the Government for allowing the transitional arrangements in this period of devaluation to take far too long.

Mr. Strang

That is helpful. The representative rate will always be with us for as long as we have a common agricultural policy which fixes its prices in units of account.

I come now to the first direct question which the right hon. Member for Down, South (Mr. Powell) put to me. As I remember, the question was whether this was something which had been planned and had been deliberately arranged for some laudible reason—that is, the discrepancy between the Irish and United Kingdom representative rates. My answer is simply that in a rational world, with sensible and rational arrangements prevailing in relation to trade between the Irish Republic and the United Kingdom, there would be no discrepancy. It is not a sensible arrangement on rational grounds in terms of the geography of Ireland and in particular in terms of the fact that there is one market rate for both currencies.

Indeed, in Brussels we have regularly pointed out the inconvenience to farmers, traders and the customs authorities of monetary compensatory amounts in Anglo-Irish trade. These problems are greatest, of course, on the border between Northern Ireland and the Irish Republic. There is an incentive to take advantage of the different internal price levels each side of the border.

Before I turn to the practical problems which were of particular concern to the hon. Member for Londonderry, I shall try to explain the situation that arises in practical terms. In practice we have a situation in which adjustments in the representative rate in Brussels are made on the basis of the effect they will have, on the one hand, on farm prices in the member State concerned and, on the other hand, on consumers. The considerations which the Irish Minister has in the Council of Ministers concern his consumers and his farmers. Similarly, the considerations of my right hon. Friend are his consumers and his farmers. If one tries to develop this theme, it will be seen that there are a number of ingredients.

One ingredient is the balance which the United Kingdom Government have decided to draw between consumers and producers. Inevitably we must draw that balance. Secondly we have the balance which the Irish Government have decided to draw between their consumers and producers. Thirdly we have the natural desire of the United Kingdom Government and the Irish Government to avoid the differential, subject to the other considerations. In addition, the Commission itself has a point of view.

It is worth pointing out that the Commission has a vested interest in reducing the disparity between sterling and the representative rate. It is the Community which has to bear the cost of the subsidy which is payable on imports into the United Kingdom. There are other reasons which might be called European ideological reasons. It is natural that a European bureaucrat will not like the idea of sharp differences as a result of the differential between market and representative rates. I refer to the sharp additional differences between the prices for agricultural commodities in the different member States.

I move on to the practical problems to which reference has been made. Those problems include the Irish difficulties which have arisen because of the differential. The problems have been most marked in respect of pigs and beef cattle. For those commodities the introduction of different representative rates was a new complication in an already difficult market situation. There had been a severe cutback in the Northern Ireland pig breeding herd as a consequence of the low level of returns, particularly during the first half of 1974. The level of employment in pigmeat plants in Northern Ireland has suffered as a result. For beef cattle, throughput and employment in the processing plants was also under threat because of the possible pull of higher market prices from the Republic.

The House will know that the Government took special action to maintain employment in the Northern Ireland meat plants by providing special payments to bacon curers. Payments have also been made to beef producers between April and July of this year. These measures have been successful in preventing any further deterioration in the employment situation in the Northern Ireland meat plants.

I might say in passing that I am grateful to the hon. Member for Londonderry for recognising that we have succeeded in solving some of the problems of the pig industry. We are keeping the situation under close review. The hon. Gentleman referred particularly to the smuggling of cattle from South to North and then back into the South. This is a very serious problem. Anyone who understands what can be made out of the smuggling will realise what I am talking about. The Government are actively considering the matter so that they can take steps to reduce its seriousness, if not completely to eradicate the problem.

Basically, however, the geography of Ireland presents problems. There is not only the disparity between the two relevant rates, although I would be the first to acknowledge that the advantages to be gained from smuggling across the border will be enormously removed in the long run when we move to full EEC prices in the United Kingdom. Closing the gap between the United Kingdom and the Irish green pound will go some way to solving the problem. It will not solve the problem completely, as indicated by the various beef support arrangements. A big incentive to smuggling is the variable premium. This was a problem before we joined the Community, but it still remains even after the representative rates have been equalised between the two countries and the rest of the Community.

The level of the Irish green pound is primarily a matter for the Government of the Irish Republic. As regards the United Kingdom representative rate, we have said that we remain ready to consider further adjustments should these be necessary to assure our agricultural industry of a full return.

In the meantime we are working urgently to see what measures can be introduced to help to mitigate the problems. The present situation is unsatisfactory, although by introducing last April the special aids to safeguard employment in the meat and bacon factories we did much to avoid some of the more serious effects.

I turn to the more general questions which have been raised about the green pound. The hon. Member for Londonderry, the hon. Member for Cardigan (Mr. Howells) and the hon. Member for North Angus and Mearns concentrated on this aspect. I know that farmers would like to have seen a greater reduction than that announced by my right hon. Friend in the United Kingdom green pound following last week's meeting of the Council of Ministers. This was not an easy decision. The Government's attack on inflation is of paramount importance. If we can curb inflation, it will be of major benefit to farmers as well as to all other members of the Community.

It was therefore difficult at this juncture to change the green pound because of the effect of that change on food prices. At the same time we recognise that some increase in producers' support and market prices was needed for the sake of our future food supplies. A balance had to be struck. The 5 per cent. change should mean an increase of over £100 million on producers' returns in a full year, the largest benefit going to the milk sector. This is a very substantial increase. It is a midyear increase on top of the considerable improvement in support levels as a result of the 1975 annual review, the new beef regime and the 1975–76 common price package.

Mr. Buchanan-Smith

The Minister mentioned an extra £100 million return to farmers. Will he also say to what extent costs will rise in the period since the last increase? To get the matter in perspective it should be looked at in respect of the wage award, but can the hon. Gentleman say what effect it will have on the net returns of farmers, which is what matters?

Mr. Strang

I agree that we should examine the matter not only in terms of wage awards. The hon. Gentleman will recognise that workers' costs are rising substantially too. There is nothing peculiar about farmers in terms of the cost-price spiral. There is no dispute between us about profitability and the difference between a farmer's costs and his income. It is only by increasing the net return and his profitability that we shall achieve the investment which we need in order to secure expansion. There is no difference between us on that point.

I felt that the hon. Member for North Angus and Mearns was a little unreasonable. It does not help the farmers' case to describe what we have achieved as "a pittance". if we look at the whole package, we see that beef more than any other sector is the area which has benefited. It has done so because we have been able to announce the target prices to February next year.

Last week's announcement of the monetary scale of beef target prices has shown producers that there is the clearest prospect of returns of £26 to £27 per live cwt next spring. The hon. Gentleman's pessimism is not fair in those circumstances.

Mr. Buchanan-Smith

I mentioned Professor Hall.

Mr. Strang

I have great respect for Professor Hall. I did not read the Press report but I presume that he was commenting on the returns of the past year from the farmers.

Let us look at the prospects. The critical matter in regard to store cattle—with which many constituents of the hon. Member for Cardigan are concerned—is store prices. That is why we were so anxious, first, to load the increase in the price on to next year for beef, and secondly to be able to announce target prices which would bring confidence into the beef sector at this critical time.

We have never been able to fix store prices. They depend on confidence and on what the fatteners think they will make out of the animals. That is why we are hopeful that these very significant increases in target prices, continuing into and through the spring, will help to ensure that those concerned with store cattle, who took a hammering last year, will secure prices commensurate with their investment and with their costs.

In talking to any of these beef fatteners or store cattle producers it is clear that not one of them will want the variable premium taken away. They recognise that fatteners now have, in effect, a guaranteed price which has completely transformed the situation, and for which my right hon. Friend deserves more credit than he has been afforded from the Opposition. In addition, there is the level at which the guaranteed price is set. That is why we have announced these very significant increases from next spring, and we hope that they will will be reflected in firm prices in the store markets in the late summer and autumn of this year.

As to the difficulty which any Government have in striking a balance between producers and consumers, we recognised that some increase in producers' support and market prices was needed for the sake of our future food supplies. The increase which we have secured has, in our view, struck the right balance.

It must also be pointed out that the combined effect of the green pound change and the stronger market rate for sterling has not yet been fully appreciated by the agriculture industry. These two changes are reducing monetary compensatory amounts very substantially. Next week the monetary compensatory amounts should fall to 8.6 per cent. I ask hon. Gentlemen to ponder that, because a disparity of over 20 per cent. was reached about a month ago. As a result of the adjustment which my right hon. Friend secured in Brussels, and also because of the firming of sterling, we have now got it right down to 8.6 per cent.

The hon. Gentleman, not unreasonably, went on at length about how this fall in the value of sterling had increased farmers' costs, and of course he was right, but he must also recognise that, on the same argument, the strengthening of sterling is helping these same costs of farmers.

The nub of the problem for producers is not so much the relationship between the representative rate and the sterling rate. It is the real prices they receive for their products. The reason why they concentrate their attention on the green pound, quite rightly, is that this is the most obviously, the quickest and the most direct way, in the context of the Community, to secure a real increase in prices. That figure of 8.6 per cent. is lower than the monetary compensatory amounts have been since last November. it is much less than half the level of only a few weeks ago.

Perhaps I might now comment briefly on the points made by the hon. Member for Cardigan about the hill farming directive. He was right in what he said about the consequence of this adjustment being not simply higher end prices and intervention prices and changes in the target prices for beef. It also affects the maximum amounts payable under the lessfavoured-areas directive. I should like to write to the hon. Gentleman on the subject of Welsh milk producers' returns. He will recognise that this is a specialised point in relation to Wales.

Mr. Geraint Howells

I hope that when the Minister is writing to me he will bear in mind the fodder shortages in some parts of Wales. Straw is very expensive these days. I paid £40 a ton for a load of barley straw last week and £68 for best quality straw. Will the hon. Gentleman consider lowering the qualifying weight for fat cattle, especially suckling calves, from 6½ cwt. to 5 cwt. so that they may qualify for the beef premium this autumn? That would help store farmers and especially the single suckled herd.

Mr. Strang

I shall want to look at that. There are other implications following from it. But the hon. Gentleman is right about fodder. I am sure that even the hon. Member for North Angus and Mearns will recognise this.

There is very little that the Government can do about the fodder situation. If we do not have the reflection in store prices that we hope for as a result of these increased target prices, part of the reason may be the fodder position. But I hope that the difficulty will not be exaggerated. We are getting information all the time. The agricultural Press shows that we do not yet known what the fodder position will be by the autumn.

I make one last point about what the hon. Member for Cardigan said. It is the case that British milk producers receive less than producers in other member States of the Community. This arises partly because of the differential between the representative rate and the market rate for sterling. But it also arises from the transitional arrangements which were negotiated by the previous Government. Inherent in the package for entry into Europe was the provision that there would be a transition between United Kingdom food price levels and Community food price levels. We are working through that transition. It will not be until we reach the end of the transition that we shall be in a position where the returns of United Kingdom producers are comparable with those in other member States of the Community.

I turn now to the speech of the right hon. Member for Down, South. I have answered his first question directly, but I am afraid that I shall not answer his second question directly. These decisions in the Council of Ministers are taken in secret. When a regulation is fixed, it becomes the law of the land. If it is a directive, it becomes a matter to which the Governments of member States respond. That is inherent in the Community as it stands, and it is not the practice of British Ministers—I doubt whether it is the practice of Ministers of the other member States—to discuss the details of the negotiations in the Council of Ministers. Every Minister has to win.

Mr. Gordon Wilson (Dundee, East)

Why?

Mr. Strang

Because that is the nature of the game. Every Minister likes to be able to point out to his member State that what he has secured is fair and reasonable. In practice it is not an unreasonable claim. That is one reason why the meetings go on for so long and the clock has occasionally been stopped. Inevitably there is great argument and interests conflict.

If we examine the problem of the decisions being taken in secret and try to work out a means of changing the system, we begin to strike at the fundamentals of accountability in the context of the Community. One way of doing this in theory would be to seek to exercise that accountability through the Parliaments of member States. The more one examines that prospect, the more one sees how hard it is to achieve it. In principle it means that if a decision is taken in the Council of Ministers, it will have to be endorsed by every Parliament to ensure full accountability. Therefore, if one is for democratic accountability one is forced to go down the path of democratisation of the Community looking at the relationship between the Council of Ministers and the European Parliament.

It would be better if hon. Members on both sides of the House who supported our remaining in the Community were more forthcoming on this matter. I believe that we have had a useful debate and that the right hon. Member for Down, South was right when he said that the question of the green pound, and in particular the differential between the United Kingdom rate and the Irish representative rate, should be subjected to full parliamentary scrutiny.

We recognise that at present agriculture is in a difficult position. Just as the hon. Member for North Angus and Mearns recognised that the agricultural industry suffered from inflation, so he must recognise that when a Government come to take decisions on agricultural policy they cannot take them in isolation from other, broader considerations.

In many respects it is unfortunate that the major decisions on "Food from our own Resources" have to be taken at this time, because the Government's maximum concern must be to get the rate of inflation down not only for the benefit of consumers, but for the benefit of all industry, including agriculture.