HC Deb 26 November 1976 vol 921 cc337-45
The Minister of Agriculture, Fisheries and Food (Mr. John Silkin)

With permission, Mr. Speaker, I should like to report to the House on my discussions at the Council of Ministers (Agriculture) in Brussels on 22nd-23rd November. The main questions discussed were the proposed action programme for milk, imports of beef, and animal health. I was accompanied at this meeting by my right hon. and learned Friend the Secretary of State for Wales, my hon. Friend the Under-Secretary of State for Prices and Consumer Protection and my hon. Friend the Parliamentary Secretary at my own Department.

On milk, I conveyed to my EEC colleagues the views which I expressed in this House during our debate on 22nd October. I made clear that it is our approach to the Community milk surplus that there should be growth in production in the right areas, such as parts of the United Kingdom, but a contraction in less suitable areas and in the total volume of Community output. The surplus makes necessary a price policy which concentrates on the needs of the efficient producer.

I made clear that we cannot accept a tax on vegetable oils and fats, or the proposal for exclusive use of butterfat in milk products. Little progress was made at this meeting towards settling a total package for milk, and discussion will be resumed at the Council on 20th-21st December. There was agreement, however, on Community aid to school milk programmes, which could be worth about £5 million a year to this country. There was also agreement on Community aid for accelerated programmes for the eradication of brucellosis, tuberculosis and bovine leucosis.

On beef, it is our policy to liberalise imports so as to get more stable supplies for our consumers from the traditional beef exporting countries of the world. Accordingly, I pressed for the Community's import restrictions under the safeguard clause to be relaxed. The Council discussed the main principles of the import regime which will be in effect when the present restrictions are removed. I now expect that the Commission's proposals will be modified so that the charges on imports will be lower, and imported beef may be cheaper than at first proposed. The levy could range from nil when Community prices are clearly above the guide price to perhaps 115 per cent. of the basic levy when they are below the intervention price. Whilst this is a step in the right direction, I withhold my agreement to it until I can be satisfied that the Commission will also put forward a reasonable proposal for beef imports under the "balance sheet" arrangements for 1977, which allow for reduced levies on beef for manufacturing.

On animal health, the present derogations from EEC directives expire at the end of this year for imports of meat, and at the end of 1977 for imports of live animals. The Council agreed to amend the directives to meet the special situation of the United Kingdom, Ireland and Denmark. I consider the results to be very satisfactory. In the interests of maintaining freedom from foot-and-mouth disease, Northern Ireland, like the Irish Republic, will have a five-year extension of the derogation permitting the continuation of its national rules. For Great Britian the existing Community safeguards will be supplemented by provisions both for meat and for live animals, which will give us the protection we need. We were asked to agree that cattle vaccinated against foot-and-mouth disease in other member States could be imported into Great Britain for slaughter in port abattoirs. I refused to accept this. We shall not now be required to take such animals, either for breeding and store or for slaughter.

It has already been agreed that there should be a Community review of the scope for making best use of the qualifications and skills of environmental health officers as well as veterinary surgeons. At this week's Council we pressed that environmental health officers should undertake certain functions resulting from the proposed directive on meat-based products. We made progress in putting our case to our Community colleagues and this question will be reconsidered at the next Council.

Mr. Peyton

I greatly regret that my first appearance at this Dispatch Box dealing with this subject should be the occasion of a protest. The meeting to which the Minister has been referring ended on 23rd November. This is the first time that the House of Commons has heard anything about it, save from the Press. Will the right hon. Gentleman improve the arrangements inside his Department to ensure that the Opposition get at least the customary courtesy of a copy of such a long statement in reasonable time beforehand? I had it a quarter of an hour before the House sat this morning. I regard that as either inefficient or a gross discourtesy.

I want to deal first with what is in the statement, which, so far as one can see, gives no cause for alarm. I shall then comment on what is not in the statement, which gives me the impression that the Government are once again putting things off and thereby making the problem worse. I refer particularly to the dairy industry.

What did the Minister mean, on the question of milk, when he said that The surplus makes necessary a price policy which concentrates on the needs of the efficient producer."? Will the Minister translate that as soon as possible into terms that mean something to producers? I hope that after the meeting on 20th-21st December the Minister will make an immediate statement to the House.

We are with the Minister in his refusal to accept a tax on vegetable oils and fats, which would be almost uniquely unhelpful, particularly at this stage. We also endorse what he has done in agreeing to Community aid for the school milk programme. We welcome the accelerated aid for animal health programmes and the eradication of the diseases he mentioned.

While it is "so far so good" on beef, I hope that the right hon. Gentleman will keep in mind at all times the need to safeguard the home producer, upon whom our position will depend no matter what anybody does.

We agree with the conclusion in paragraph 4 about animal health. We endorse the Minister's view that the results are satisfactory. He is right to be cautious about vaccination against foot-and-mouth disease. There would be no justification for accepting any kind of avoidable risks in dealing with this serious scourge.

I now come to the things that are not in the statement and which we confidently expected would be in it. But we had been warned by extensive leaks in the Press about what the statement would contain. Does not the Minister accept the charge that the Government are putting off the day when the producer in this country can compete on anything like equal terms with Continental producers? Secondly, has not the time come when all of us should accept that the era of relatively cheap food is over? Does the Minister not agree that those in power will only deceive themselves as well as other people if they pretend that we can get back to that era, particularly against a background of a battered currency?

I wish to stress my last point. Will the Minister wholeheartedly accept that the more precarious our position becomes as a world trader the more important it is that we should do everything sensible to avoid long-term damage to our home producers, who have a vital role to play?

Mr. Silkin

I hope that the right hon. Gentleman will acquit me of discourtesy. I offer him the courtesy of congratulating him on what he has described to me as "a bed-of-nails appointment". I hope that we shall have long and interesting discussions across the Floor of the House.

The right hon. Gentleman will realise that one cannot make a statement to the House on the day of the opening of Parliament. That knocked out Wednesday, and, unfortunately, Thursday was a full day for statements. I apologise and hope that this situation will not recur. I shall look into the right hon. Gentleman's complaint that he did not obtain a copy of my statement until late.

I was delighted to find a certain amount of cautious praise for those matters that the right hon. Gentleman felt we had managed to achieve during our last discussions. I shall deal with those matters briefly and go on to the matter about which he had reservations. We are nearly self-sufficient in the European style of beef. Nevertheless, in the past we have always imported beef which is of a different kind from that produced here or in Europe. We have always imported beef for the meat-processing industry, for instance, and it is with that that we are primarily concerned at present.

I hope that the right hon. Gentleman will accept my assurance that I am in favour of having a strong home-based production. That equally applies to the dairy industry and to anything else that we can possibly produce ourselves. There is a dilemma. On two occasions I pointed out our philosophy to the Council. I said clearly that I believed that the fact that one wishes to avoid mountains, lakes or structural surpluses does not mean that efficient countries should not improve their output. I said that ours was such an efficient country. That is the philosophy of "Food From Our Own Resources"—which is not the most popular of White Papers among some of our Community colleagues. They regard it as anti-Communitaire, but not universal. I believe that that philosophy is right in the national interest and in the interest of the Community.

When the right hon. Member talked of the industry generally, he was making a veiled reference to the green pound and its possible devaluation. There is only one criterion concerning the green pound, and that is that its movement one way or the other must be in the national interest at any time. I have absolutely no dogma about it. It is not a totem pole of any kind. As Minister, I shall do my best to see that when there is a move it will be in the national interest.

Mr Craig

How will the Minister cope with the anomaly of the green pound that exists in Northern Ireland? The Government responded to the situation by a £1 million subsidy for a limited time. Do the Government propose to withdraw that subsidy and leave Northern Ireland to deal with the situation with its own resources?

Mr. Silkin

There is an anomaly in the position in Northern Ireland and the Irish Republic. To be frank about it—and I hope that my right hon. Friend the Secretary of State for Northern Ireland will not mind my saying this in his absence—the anomaly arises because of the ease with which cattle and pigs, in particular, can be smuggled across the border. We are moving as speedily as we can consistent with the promise given that we would introduce measures only when we knew that they were necessary, and that in any case such measures would be operated for a relatively short period of time. I hope that we can get the matter sorted out. I would be grateful if the hon. Member for Belfast, East (Mr. Craig) would not press me too hard, because there are difficulties, and discussions are necessary.

Mrs. Dunwoody

Is my right hon. Friend aware that we warmly welcome his sensible statement, which seems the first shaft of light in agriculture policy that we have seen for many a long decade? Will he continue his strong resistance to the more obvious nonsenses like a tax on vegetable oils? Will he also make it clear to the right hon. Member for Yeovil (Mr. Peyton) that if dairy produce is produced in large amounts and its price consistently rises, people in this country will not be able to afford it, and that when the housewife gets to that point the surpluses will simply go into intervention at considerable cost to the taxpayer and considerable irritation to every member of the Housewives' League?

Mr. Silkin

I am grateful to my hon. Friend for the kind thoughts that she has expressed. I am glad that I have pleased her so far, at any rate. She is quite right when she talks about the real problem of the surplus. It is all very well to be able to produce, but one also needs the consumer to consume. Even what I believe were justified rises in the price of milk recently, in accordance with our own arrangements, appeared to meet some consumer resistance. There clearly is a law of diminishing returns here.

Mr. Stephen Ross

Is the right hon. Gentleman aware that the Liberal Party also welcomes his statement, particularly as it affects animal health and the qualifications for environmental health officers? Is he also aware that throughout the farming industry there is a belief that he is erring a little too much on the side of the consumer?

Mrs. Dunwoody

Rubbish.

Mr. Ross

Is not the day coming—I echo the words of the right hon. Member for Yeovil (Mr. Peyton)—when the Minister will unfortunately have to apologise to the consumers for the increase in the costs of food which are inevitably coming upon us? He should be warning the public of these increased costs, which I and many other hon. Members believe to be inevitable. Will he wear his other hat more often and look after the interests of the producers, since that food may not be available in this country in a few years' time?

Mr. Silkin

One thing that I must do as the Minister, if I cannot at this moment say that we are all Socialists now, is to say that we are all consumers now. I do not think that there is a distinction between the producer and the consumer. Unless the consumer can afford to pay for what the producer produces, what is left tends to end up in the mountains of which we speak. But I take the hon. Gentleman's underlying point, which is that I must watch out for danger signals which might hurt production. I fully intend to do that and I assure him that as far as I can I shall keep the correct balance.

Mr. Spearing

Does my right hon. Friend agree that the problem in the milk sector is the lack of proper organisation in terms of liquid milk in the other EEC countries? Can he not persuade them to adopt the Milk Marketing Board structure? Does this not mean that imports of cheese, for example, from Denmark cost £828 a ton as against only £527 a ton from New Zealand? Does this not add to the increased costs of food which this country has to pay for being in the EEC, despite the so-called green pound subsidy, which is only half the increased costs, according to estimates? Does that not mean that we have a "2p off" policy on a price which is 4p more?

Mr. Silkin

My hon. Friend has raised two basic and important points. The first is the question of the Milk Marketing Board. We have had over 40 years' experience of the Board now, and it has proved its worth as one of the most efficient instruments there could ever be. I should like to see the Community adopting that basis. What I am determined to do is press as hard as I can, if I cannot persuade my colleagues that this is good for them—I believe that it is—to keep at any rate the principles of the Board in our own country. My hon. Friend's second point goes back to the question of pricing, which is a vital question. Of course, inevitably, the price package comes up in the next six months or so, as my hon. Friend knows. I shall draw his remarks closely to the attention of the then President of the Council.

Mr. Arthur Jones

I think that the Minister's statement referred to liberalised imports, without referring to beef. He elaborated that somewhat in reply to my right hon. Friend the Member for Yeovil (Mr. Peyton). Can he give any indication of the increased levels that will flow from this agreement? Can he give an undertaking that it will in no way be to the disadvantage of the British beef producer?

Mr. Silkin

On the second point, that is what one is trying to achieve. I went a little further into the background and history of it because that is relevant today. On the second point, the hon. Gentleman will have gathered from what I said that this has not yet been finally arranged and that I am withholding my agreement until I get a satisfactory statistical basis—which I hope will be in December. Then, I think I shall be able to give the hon. Gentleman the information that he seeks, but at the moment it is a matter of negotiation.

Mr. Peyton

I asked the right hon. Gentleman whether he would undertake to make a statement following the resumed meeting of the Council of Ministers, on 20th-21st December, before the House rises. I hope that he will agree to do so as an absolutely firm commitment and that on that occasion he will remedy the omission of today and at least mention pigmeat and the problems of pigmeat producers in a sympathetic fashion.

Mr. Silkin

Because he is just one degree newer than I am in these matters, the right hon. Gentleman has probably not heard me mention this before. The pigmeat sector is something that worries me. I assure him that I have it very much in mind. Indeed, although it did not appear officially on the agenda, the right hon. Gentleman knows that we have already put in hand the method of recalculation of the MCAs, and we are in discussions with the Commission on the point. On his second point, I should be delighted to make a statement, assuming that the House is still sitting. I hope that it will be, because it will be a very important Council meeting. I shall endeavour to see that the right hon. Gentleman gets his copy of what will no doubt be a brilliant statement perhaps a little earlier than he did today.