Green Pound

HC Deb 04 November 1976 vol 918 cc1607-12

11. Mr. Dykes

asked the Minister of Agriculture, Fisheries and Food what action he now proposes to take in the EEC Agricultural Council to adjust the green pound for the recent depreciation of the pound sterling.

13. Mr. Geraint Howells

asked the Minister of Agriculture, Fisheries and Food if he will alter the value of the green pound bringing it into parity with the £ sterling.

15. Mr. Peter Mills

asked the Minister of Agriculture, Fisheries and Food whether he will now devalue the green pound.

19. Mr. Boscawen

asked the Minister of Agriculture, Fisheries and Food whether he will now devalue the green pound.

23. Mr. Brotherton

asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the value of the green pound.

26. Mr. MacGregor

asked the Minister of Agriculture, Fisheries and Food whether he will devalue the green pound.

Mr. John Silkin

As I made clear in the debate on 22nd October, I shall continue to keep the green pound under review but I do not consider now to be an appropriate time to make a change.

Mr. Dykes

Will the right hon. Gentleman seize this opportunity to be bold, straightforward and dramatic, and concede that the green pound will have to be fully adjusted downwards by the time that the United Kingdom gives up the presidency of the Council of Ministers in the first half of next year?

Mr. Silkin

The hon. Gentleman is looking eight months ahead. I have to deal with the position at this moment, and that position is absolutely clear. At the moment I do not have the slightest intention of devaluing the green pound.

Mr. Hoyle

Will my right hon. Friend please say that he will continue to do what he has done up to now and protect the interests of the British housewife, because that is what matters and will stop prices rising? Prices have been rising ever since we have been connected with the EEC. I admire the stand that my right hon. Friend is taking and I hope that he will continue to take it.

Mr. Silkin

I am grateful to my hon. Friend. The rate of devaluation proposed by the ommission—4.5 per cent.—would have made a difference of about 1p in the pound on food at this moment. That was something to which I was not prepared to agree.

Mr. Howells

I am sure that the Minister is well aware that the cost of importing food and feeding stuffs has increased 400 per cent. over the last 15 years. I am sure, also— —

Mr. Speaker

Order. Will the hon. Gentleman ask a question?

Mr. Howells

I am just wondering whether the Minister—

Hon. Members

No.

Mr. Torney

"Is the Minister aware …?"

Mr. Howells

Is the Minister aware—[HON. MEMBERS: "Hear, hear."]—that he will not devalue the green pound? What incentives will he give farmers to increase production from the land?

Mr. Silkin

I am afraid that, in the cheers which greeted the hon. Member, I missed the last part of his question.

Mr. Howells

What incentives does the right hon. Gentleman intend to give to producers to improve or increase production from the land?

Mr. Silkin

Clearly, one must look always at what the question is in regard to the agriculture industry. This is made much more clear when one realises how long it took the hon. Member to frame his question. Of course I will keep this totally under review. At present, I do not believe that there is any danger to British agriculture at all from the stand I am making. So far as the British consumer is concerned, there would be a considerable amount of danger if I did not make a stand.

Mr. Torney

Does my right hon. Friend agree that if we had never entered the Common Market the Tory Party would not now need to worry about the green pound, since we should still have our own system of price support and the annual review to help farmers?

Mr. Silkin

I absolutely agree with my hon. Friend that if we had not entered the Common Market we should today be discussing many different questions.

Mr. Mills

Is the Minister aware that he has shown today his lack of knowledge of agriculture and food production by saying that he is thinking only of the near future? Agriculture is a long-term business. Although it may be in the interests of the consumer in the short term to say "No" to the green pound, in the long term it will be fatal.

Mr. Silkin

I have great respect for the hon. Member, who occupied a distinguished post in the Ministry in which I now hold one also, but I should like him to go back to do his sums on the 4.5 per cent. devaluation of the green pound suggested by the Commission, weighing what actual benefit the farmers would have got from it, and the loss to the consumer.

Mr. Ioan Evans

I congratulate my right hon. Friend on his appointment and on his stand on the green pound. Rather than trying to make a silk purse out of a sow's ear, should we not be trying to end the common agricultural policy and revert to the policy that we had from the end of the war, which was good for British farming and for the British housewife?

Mr. Silkin

My hon. Friend has bowled a kind of posthumous googly, because we dealt with the CAP earlier. I said then that there were many changes that could be made in it and that I was anxious to get them under way as soon as possible.

Mr. Boscawen

Surely the Minister realises that it is not the hard cash value of altering the green pound by a small amount which matters to the industry; it is the raising of confidence in the industry that we are moving in the right direction. He must make a small movement soon.

Mr. Silkin

If the confidence of the agriculture industry depends upon the token devaluation of the green pound, which would hurt the consumer but would not help the industry, I can only say that the industry has been very badly advised over the past short while.

Mr. MacGregor

Is the Minister aware that since he last spoke in the House about the green pound the decline in sterling has caused as big an increase in the retail price index as a modest devaluation of the green pound would have done, without any benefits to increased food production and therefore to the housewife in the long run? Will he also comment on the Agricultural Development Committee's view that there are substantial benefits to be gained by the balance of payments in the long run from narrowing that gap?

Mr. Silkin

When the hon. Gentleman thinks about the first part of his question, I think that he will see that what he says applies equally to the green pound and its relation to what the consumer pays for food. Were one to devalue, it would inevitably increase food prices, about which the hon. Gentleman was rightly disturbed a moment ago. On the question of a general, for ever, policy about the green pound, one way or another, I think that I made it clear in the debate on 22nd October that this is a question not of philosophy but of what is best for Britain at any particular moment. That is what I intend to work by.

Mr. Cledwyn Hughes

Does my right hon. Friend agree that while the old system of farm support worked very well and while the CAP is in need of urgent revision, if we returned to the old system it would cost this country about £1,000 million a year?

Mr. Silkin

I have, and have always had, a great respect for my right hon. Friend, but the Question on the Order Paper was whether I intended to devalue the green pound. I think that we would both agree that if I did so now it would be disastrous. When people talk about a 40 per cent. gap, I wonder whether they realise what the effect on agriculture would be if we closed that gap. It would destroy it as surely as it would destroy the consumer.

Mr. Pym

Does the right hon. Gentleman acknowledge that this misalignment of the green pound is one unhappy consequence of the failure of the Government's national economic policy, resulting in the fall in the value of sterling? Will the Minister acknowledge that, whereas the immediate result of what he is doing is that the consumers benefit to the tune of more than £½ million a day at our partners' expense, he is running the risk of shortages in a year or two's time so that in the long run the consumer will be disadvantaged? Has the right hon. Gentleman given sufficient consideration to that aspect?

Mr. Silkin

The right hon. Gentleman has asked three supplementary questions in one. The answer to the second part of his supplementary question is "No, Sir". We are concerned with the immediate position, but we are also watching and guarding the whole future of the agriculture industry and will continue to do so. Secondly, it is impossible to have a common agricultural policy unless we have something like a common prices policy. Therefore, it was necessary to invent the unit of account. That requires differing monetary compensatory amounts and has nothing to do with the economic position of any country. It goes back to 1969. The only alternative would be economic and monetary union, which is what the Germans would have liked at that time but which is, as far as I can see, the wish of nobody in the House.