HC Deb 02 May 1977 vol 931 cc24-5
27. Mr. Biffen

asked the Secretary of State for Prices and Consumer Protection what estimate he has made of the likely percentage increase in total food prices during the current year as a consequence of EEC arrangements.

Mr. Hattersley

As my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 27th April, the outcome of the recent CAP price negotiations could add about ⅓ per cent. to average retail food prices in the year up to 1st April 1978. The two remaining transitional steps which we are committed to take under the Treaty of Accession will add about a further 1 per cent. to food prices in this period. The effect on the British consumer of the 2.9 per cent. green pound devaluation will be more than offset by the butter subsidy which we have negotiated.

Mr. Biffen

Is the right hon. Gentleman aware that, in the light of a falling trend of domestic food consumption, his words to the Federation of Young Farmers at Blackpool this weekend were particularly timely and his indictment of the common agricultural policy will be welcomed in many quarters of the House? Can the right hon. Gentleman further confirm that Commissioner Tugendhat has indicated that a Community scale system of food subsidies would bankrupt the Community budget, and can he therefore say that it is his view that the fundamental reform of the common agricultural policy which he seeks must turn upon the prices that are paid to agricultural producers themselves?

Mr. Hattersley

Yes, I agree with that exactly. Because of the differences between the amount of agricultural employment in one Community country and another, I do not believe that we could ever expect the Community to return to the sort of agricultural financing that we enjoyed in this country for so many years. What we ought to expect the Community to do is not to increase the support prices for commodities which are already in structural surplus. That I regard as a radical change, and I believe that the House as a whole would regard it as a change for the better.

Mr. Madden

As previous attempts to secure fundamental changes in the Common Market's agricultural policy have failed lamentably, why does my right hon. Friend believe that present conditions are more favourable? As the accumulated cost of the Common Market to British housewives has been quite staggering since we joined, why does he not knock a few more holes in the CAP, let it sink gracefully, and let Britain withdraw?

Mr. Hattersley

One of the signs of hope is the success of the negotiations which my right hon. Friend the Minister of Agriculture had 10 days ago, when he obtained a deal which was better in British terms and better in terms of reforming the CAP than anything else that had happened during our period within the Community. My other hope stems from my belief that other members of the Community, particularly the industrialised countries of the Community, must sooner or later realise what a vested interest they have in reforming the CAP. Representatives of other Governments have already made speeches supporting that sort of view, and I believe that eventually common sense will prevail and the sort of reforms for which I hope will come about.

Mr. Body

Is the right hon. Gentle man aware that the figures he has just given are gross underestimates? For example, they have not taken into account the appalling burden on our meat producers of having to pay import levies on feeding stuffs, which now amount to £40 or £45 a ton, when the cost of feeding stuffs can amount to as much as 75 per cent. of the cost of meat production.

Mr. Hattersley

The point that the hon. Gentleman makes is open to dispute, but what is not open to dispute is that the analysis I have just given of the cost to the British consumer of the deal done 10 days ago is as I have described it. I do not think that any reputable authority would argue with those figures.