HC Deb 14 June 1979 vol 968 cc596-9
3. Mr Hal Miller

asked the Minister of Agriculture, Fisheries and Food what is the current rate of the green pound.

Mr. Peter Walker

The present rate of the green pound is 1.81094 European currency units, giving a current United Kingdom MCA of 12.2 per cent.

Mr. Miller

Will my right hon. Friend accept that, although we welcome his commitment to devalue the green pound in the lifetime of this Parliament, there is a need to do something more immediate and specific in the pig industry?

Mr. Walker

I agree with my hon. Friend that the pig industry is experiencing and has experienced considerable difficulties. I very much regret that in the past four or five years, while our pig herd has declined considerably, those of the Dutch, Germans and Danes have substantially increased. An important aspect of the green pound policy is remedying the discrimination against our pig producers and processors. That is why urgent consideration is being given to our future green pound policy.

Mr. Torney

Is the Minister aware that a devaluation in the green pound would cause considerable increases in the basic price of food commodities such as butter, cheese, bacon and meat? Will he take steps to avoid that? Does he agree that it would add to the inflationary spiral that has already been caused by the Budget and that it would increase the massive surpluses that already obtain in Brussels? For those reasons, will he take steps to avoid devaluing the green pound?

Mr. Walker

When my predecessor agreed to a devaluation of the green pound last March, he stated that the cost of a 5 per cent. devaluation of the green pound would be a 1 per cent. rise in food prices. Since, in the lifetime of the previous Government, food prices rose by 120 per cent., I should have thought that a 1 per cent. increase was a small price to pay to stimulate British agriculture and to save a large number of jobs.

Mr. Wm. Ross

Is the Minister aware that a decrease in the value of the green pound will inevitably lead to a considerable increase in the price of grain? Will he tell us what effect that will have upon the production costs of pigs and poultry in the Province?

Mr. Walker

The total effect of a 5 per cent. devaluation over all food prices is 1 per cent. It is very much against the interests of British producers to have the enormous disadvantage of MCAs in pig farming and many other spheres at the present time.

Mrs. Kellett-Bowman

May I add my congratulations to my right hon. Friend upon his appointment? It was greeted with great delight in the farming industry. Following his reply on the green pound gap, and in view of the serious state of British farmers, revealed in the Socialist Government's White Paper "Farming and the Nation"—which showed that the farmers' incomes fell by 11 per cent. in real terms last year—will my right hon. Friend maintain his strong opposition to any discriminatory levy in the milk regime which would exempt German fanners and thereby discriminate against efficient British producers?

Mr. Walker

I am grateful to my hon. Friend for her remarks. I agree that the proposals currently before us would heavily discriminate against British dairy producers. We would accept only a co-responsibility levy that was equal for all producers throughout Europe and not discriminatory against British producers.

Mr. John Silkin

Since, in addition to the recently announced increases in bread and milk, the Government have added another 7 per cent. on VAT for biscuits, confectionery and soft drinks—and all that follows an increase of 100 per cent. in the price of butter which the Conservatives' transitional increases forced the Labour Government into making—does the Minister feel that this is the time to continue punishing the housewife by a further devaluation of the green pound?

Mr. Walker

First, the announcement of the increase in the price of milk should have been made by the right hon. Gentleman on 1 April and not by me. Second, the right hon. Gentleman had the remarkable record of presiding over a period when food prices rose by 120 per cent. and farming incomes went down.

15. Mr. Nicholas Winterton

asked the Minister of Agriculture, Fisheries and Food when he intends to devalue the green pound in order to provide a position of fairer competition for British farmers.

Mr. Peter Walker

The Government are committed to devalue the green pound in order to enable United Kingdom producers to compete on level terms with those in the rest of the Community. They are committed to do this in the lifetime of this Parliament. I am considering the matter of timing.

Mr. Winterton

My right hon. Friend is reported to have indicated that he is seeking to take into his Department specialist advisers to help our farmers with their marketing. Is he aware that the best service he can do for farming at this time is to have a speedy devaluation of the green pound and a recalculation of the monetary compensatory amounts in order to achieve the objective which I am sure the whole House shares?

Mr. Walker

I recognise the importance of doing that. The advantage would be in competing both at home and abroad. But I believe that an improvement in marketing can also have a considerable part to play. I believe that there is a great deal of scope for British producers to improve marketing, irrespective of green pound policy.

Mr. Torney

Does the right hon. Gentleman agree that devaluing the green pound would greatly increase the prices of basic foods and that that would cause greater surpluses? Is he aware that we already have huge surpluses within the Common Market and that the action he proposes would increase them and increase the opportunity for the Russians to buy butter at give-away prices, as they are doing already?

Mr. Walker

I must repeat to the hon. Gentleman that when the last Government devalued the green pound by 5 per cent. they pointed out that it resulted in an increase in food prices of 1 per cent. and an increase in the retail price index of one-third of 1 per cent. I am sorry that the hon. Gentleman is not concerned about the rising unemployment in certain sections of agriculture and the fact that the present system is an advantage to foreign producers at the expense of British producers.

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