Food Prices (Hansard, 19 January 1978)

§ 3. Mr. Gwilym Roberts
asked the Minister of Agriculture, Fisheries and Food what are the latest estimates available for the effect of Common Market membership on British food prices; what food price increases in this context are expected during 1978; and if he will list them in the Official Report.

§ The Minister of Agriculture, Fisheries and Food (Mr. John Silkin)
I regret that I cannot assess the effect of membership of the EEC on our food prices because of the difficulty of predicting how prices would have moved if we had remained outside. As for 1978, the effect of the final transitional step on 1st January cannot be accurately calculated but might lead to an increase of up to 1 per cent. on retail food prices. I cannot, at this stage, forecast what further price increases may occur in 1978.

§ Mr. Roberts
Will my right hon. Friend take the opportunity to confirm or contradict the appalling reports which are going around today that the Government are contemplating a 5 per cent. devaluation of the green pound? Does he not agree with me that the green pound is far too blunt an instrument and that the only effect of these changes would be to add to the housewife's burden and make the Goverment's incomes policy far more difficult? Does he not believe that, if there are farming producers with problems in specific areas, they should get more selective help than this sort of weapon?

§ Mr. Silkin
Before I can confirm or deny reports, I must, of course, see the reports. I can tell my hon. Friend that my view on devaluation of the green pound remains exactly what it has been since 19th October 1976, when I first stated it to the House. It is that any movement in the green pound must be considered in the national interest, and in the national interest alone. On my hon. Friend's general argument that the green pound is a blunt instrument, I am bound to say that I agree. I regret that we cannot make it a good deal sharper.

§ Mr. Bulmer
Will the Minister say what estimate has been made of the loss of investment and jobs that has followed from the Government's refusal to allow British farmers to compete on equal terms with their EEC counterparts?

§ Mr. Silkin
The hon. Gentleman must carefully define the term "farmers" here. The agriculture industry is a very large one. Some sectors of it, of course, are affected by the green pound. Large sectors of it are not. For example, sheep-meat is not, at the moment potatoes are not, poultry is not and horticulture is not. So we have to be much more selective, as my hon. Friend the Member for Cannock (Mr. Roberts) said. But, of course, against that we also have to weigh in the balance the national interest, which is the extent to which the consumers—the housewives—in this country may benefit from it. It is the balancing of these two difficult factors that is the main purpose of the job of a Minister of Agriculture at the moment.

§ Mr. Spearing
Although my right hon. Friend has difficulties in doing the calculations that he was asked to do, has he not read the Commission's recent CAP office statement to the effect that the current levies on grains imported into this country and the EEC are at least the equivalent of the world price, thus making grain prices double what they would be if we were outside the Market? Would he not agree that, prima facie, that puts between 25 per cent. and 30 per cent. on to the prices of bread, other foods and cattle food? Will he make the calculations to see what prices would be in circumstances which currently affect grain in the EEC?

§ Mr. Silkin
I have made the point many times in this House that the question of common prices and, in particular—because, of course, it relates to this point, too—the creation of structural surpluses are elements of the common agricultural policy which need strong and violent reform. This has been the basis on which this Government have stood and with which they intend to continue. Of course, my hon. Friend is quite right in much of what he says. It will be my task over the next four years—or that of my Labour successor should I be moved—to see that we move to a sensible prices policy.

§ Mr. Peyton
Since the right hon. Gentleman has reiterated his known views about the devaluation of the green pound, would he care to add to them and help the House greatly by saying whether he contemplates making any announcement on the devaluation of the green pound during or before Monday's debate?

§ Mr. Silkin
Before considering whether an announcement should be made, we first have to decide what the policy may be. The policy on the green pound, as I told the Farmers' Club—I hope that the right hon. Gentleman read my speech, because it was a very good one—was that the whole question was under continued and continual consideration. It remains so.

§ Mr. Peyton
The right hon. Gentleman will not be surprised when I say that I was amazed that he saw fit to mention his speech to the Farmers' Club. It was not a box office success, according to all reports. Perhaps he will now try to answer my very simple question. Does he have it in mind to make a statement on the green pound during or before Monday's debate?

§ Mr. Silkin
As for the box office, I was speaking as Minister of Agriculture, Fisheries and Food, and the box office returns were not very much in my mind. It was the national policy that was in my mind. That national policy dominates what I say. Should it occur to me to make an announcement one way or another before the debate on Monday, I shall certainly inform the right hon. Gentleman.

§ Mr. Torney
I regret that my right hon. Friend has had such difficulty in making an estimate of the increase in food prices since we have been in the EEC. I suggest to him that he looks to the tremendous taxes and levies that there are on food that we import from third countries and also at the cheapness of food from third countries compared with the price of food coming from the EEC. In that way, might he not get an estimate of the increase which he can give to the House at a later date?

§ Mr. Silkin
I was not really asked that question, Mr. Speaker. If I am asked how much food prices have gone up since we entered the EEC, I am perfectly prepared to tell the House that the increase is about 128 per cent.