HC Deb 20 July 1978 vol 954 cc768-71
5. Mr. Wiggin

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the progress of negotiations in the EEC towards the adoption of the European unit of account for agricultural purposes.

Mr. John Silkin

I have pressed the Council to discuss the Commission report which in principle favoured the introduction of the European unit of account into the common agricultural policy, and I have insisted that no decisions can he taken on the proposal to phase out MCAs until this issue has been resolved.

Mr. Wiggin

Does not the Minister agree that the staggering increase in food prices has been due very largely to the Government's mismanagement of our currency? Is he not aware that, unless stern action is taken by the Government to introduce a new unit of account for trading and food across Community borders, this trouble will prolong itself?

Mr. Flannery

Which way did the hon. Gentleman vote?

Mr. Silkin

With regard to the first part of what the hon. Gentleman said, I invite him, in return for my buying him a pound of butter and a pound of steak in the United Kingdom, to buy me a pound of butter and a pound of steak in Germany, because the difference is 44p per pound for butter and £1 for steak. We are dealing with a basket of currencies based upon the "snake", which, effectively, is the German mark. If we were to have a European basket of all the currencies—in other words, bringing the other two-thirds of the production and two-thirds of the population into the calculation—and if the common prices were lowered to those of the three countries with the weakest currencies—the United Kingdom, France and Italy—the difference would be enormous and the prices would go down to a level that would enable the hon. Gentleman to enjoy his butter and his steak in Bonn.

Mr. Powell

Is the right hon. Gentleman aware that no one who pretends to wish to see the common agricultural policy reformed will have anything to do with the alignment of currencies proposed at Bremen?

Mr. Silkin

I think that that question goes rather beyond the agricultural remit. But I agree with the right hon. Member that not only does the common agricultural policy need to be reformed but it needs to be fundamentally reformed.

Mr. Mark Hughes

Does my right hon. Friend agree that if he were to follow the advice frequently given from the Benches opposite of realigning the green pound forthwith, or very quickly, this would induce far too unacceptable a level of inflation in prices to the consumer in this country? Does he also agree that the evidence from Ireland and Italy is that by continual revaluation of their pound and green lira they have over- compensated their farmers for what they really require?

Mr. Silkin

My hon. Friend is right. Entry into the EEC has resulted in an increase of about 10 per cent. in the price of foods in this country.

Mr. Wiggin

What about the other 95 per cent.?

Mr. Silkin

The right hon. Member for Yeovil (Mr. Peyton) was suggesting—and, I believe, is still suggesting, unless he cares to reject it now—that parity between the green currencies should be established over a two to three-year period. That would add another 10 per cent. to the prices.

Mr. Wiggin

What about the other 95 per cent?

Mr. Silkin

While we are about it, if the Opposition are really so concerned about the level of food prices and so on, I must point out that there are a large number of counties represented by hon. Members opposite which do not propose to operate the free milk scheme.

Mr. Peyton

Perhaps the right hon. Gentleman would care to take the opportunity of explaining how he accounts for the rest of the increases in food prices which have taken place since his Government have been in office. [HON. MEMBERS: "The Common Market."] As he has taken the opportunity to dwell upon Conservative policy, may I ask whether he is aware that such modification as I have made from my original statement in the House has been due very largely to the mess and muddle caused by his own economic policy?

Mr. Silkin

I am glad to hear that the right hon. Gentleman is considering modifying his policy, because at the time when he was not modifying his policy the same statistics applied—that is, a 10 per cent. increase in food prices, which at that time, he told us, was necessary in the national interest. With regard to the rest of the price increases, the right hon. Gentleman is missing a very important point—namely, the increase in oil prices, the effect on fertilisers and the effect on prices all over the Community. If the right hon. Gentleman cares to look at prices there, he will see that they, too, have risen.

Mr. Peyton

I know of no greater expert than the right hon. Gentleman at missing points that are inconvenient to him. Does he acknowledge that while he and his friends have been in office, food prices have more than doubled and he has not bothered to explain why?

Mr. Silkin

I thought that I had bothered to explain. The right hon. Gentleman perhaps takes a little longer to understand these points than most other people. The first and most important issue is what could have been foreseen, and was in fact foreseen, by his Government when they took us into the EEC in the first place—namely, a 10 per cent. increase in food prices. What they could not have foreseen, I agree, was the increase in oil prices, which had its effect upon the food prices of all the temperate zones throughout the world.