Green Pound (Hansard, 17 February 1977)

§ 4. Mr. Dykes
asked the Minister of Agriculture, Fisheries and Food how long he considers that the green pound calculations for individual products within the common agricultural policy can remain unadjusted in relation to the level of the £ sterling's value in international transactions.

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

§ The Minister of Agriculture, Fisheries and Food (Mr. John Silkin)
The Commission's proposals for agricultural prices for 1977–78 are now under discussion in Brussels. It would be premature to say now if or when a change in the green pound would be in the national interest.

§ Mr. Dykes
Will the right hon. Gentleman seize this unique opportunity to be straightforward and direct with the House? Does he think that the bulk of the eventual adjustments in the green pound will come after the negotiation of phase three?

§ Mr. Silkin
The point of being straightforward is to tell the House exactly what one believes from the beginning right the way through. My first major speech in the House on agriculture was on 22nd October, which was within a very few days of having taken over the office. On that occasion I made clear my views on the green pound. I have not altered my views in the meantime.

§ Mr. Brotherton
Is the right hon. Gentleman aware that the Government's refusal to bring the green pound more into line with the value of the £ sterling aounts to national dishonesty? Is he aware that that dishonesty not only affects our credibility abroad among our friends but works adversely against our agriculture industry?

§ Mr. Silkin
The hon. Gentleman has raised two questions and I crave your indulgence, Mr. Speaker, for trying to answer both of them. As for alleged dishonesty, what we are talking about is a Community budget of £2,575 million, of which about £1,400 million is devoted to items that are of no real benefit to this country. We are talking about mcas of £400 million.
In the light of all that, the truth is that Great Britain pays into the Community budget a great deal of money and a great percentage. It is not a question of taking out; it is a question of putting in as well.

§ Mr. Gould
Will my right hon. Friend confirm that the green rates were introduced by the French and Germans in their own interest long before we became members of the EEC? Will he further confirm that the German producer benefits much more substantially from the green deutschemark than the British consumer benefits from the green pound, even though this fact is disguised by the way that EEC food prices are linked far more to the "snake" currencies—in other words, to the deutschemark—than to the pound?

§ Mr. Silkin
My hon. Friend is right. He is a good historian, and there was a long history to this matter before we entered the Community, going back to 1969. It is also true that the green currency basis has changed from gold to the dollar, to the average of all the currencies, and now to the "snake", which, as my hon. Friend points out, means effectively the German mark.

§ Mr. Henderson
Whatever the global aspect of the amount, there are certain sectors of the agriculture industry which are particularly vulnerable to the effects of the green pound. Will the right hon. Gentleman accept that the beef sector is being adversely affected by the Irish Government's action on the green pound 685 and that this effect is serious for many producers in different parts of the United Kingdom.

§ Mr. Silkin
There are a couple of Questions later on the Irish representative rate. I rather assume that the hon. Gentleman's question might well come up then. In any event, I suppose that this is a kind of invitation to see that it does. Let me, however, put this to the hon. Gentleman. A change in the value of the green pound does not necessarily help all sectors of agriculture. One can be selective about this. It puts up the prices of cereals but it does not automatically put up the guaranteed price of milk or the beef target price. It does not necessarily put up the price of pigs, poultry or eggs.

§ Mr. Gwilym Roberts
Does not my right hon. Friend accept that an adjustment of the green pound could be the last straw that will break the consumer's back, and that it could well destroy our chances of economic survival and, with them, the future of the Government? Can he assure the House and the Labour movement that he will be absolutely firm with the farmers and with the EEC in this matter?

§ Mr. Silkin
No hon. Member in this House has ever suggested that we should devalue the green pound so that it reached a par with the £ sterling. That would be total lunacy, not only for the country but for the agriculture industry too. The green pound happens to be a national asset and I regard it as in my trusteeship.
Mr. Peyton: I hope that the right hon. Gentleman will prove a good trustee and a reliable one. Is it not the case that merely a marginal devaluation of the green pound would have saved a great deal of damage being done to the pig industry? Will he learn from that and take action to save other producers in other areas of the industry from equal damage?

§ Mr. Silkin
What the right hon. Gentleman is suggesting—I hope that I am not being too coy about this—is that, although the real reasons for the difficulties about pigmeat are concerned with the totally unfair and inequitable method of calculation of the mcas, if we were to be as craven as Governments have 686 been in the past we would give away something that is of national importance in order to get something we deserve. That I do not agree with.