HC Deb 05 March 1979 vol 963 cc881-2
7. Mr. Marten

asked the Secretary of State for Prices and Consumer Protection whether he has made any representations to the EEC concerning the level of prices.

Mr. Maclennan

I frequently attend meetings of the Agriculture Council. The Government have consistently made clear their strongly held view that the common price level in the EEC is too high.

Mr. Marten

What has the Common Market actually done to help bring down prices in this country?

Mr. Maclennan

It is reckoned that food prices are about 10 per cent. higher than they would be if we were not members of the EEC, but my right hon. Friend the Minister of Agriculture, Fisheries and Food is negotiating to try to eliminate the surpluses and excessive common price increases. It is hoped that that will help to stabilise the trend which is wholly unacceptable to the Government. As a footnote to that answer, there is an EEC subsidy on butter which is worth 5p per pound.

Mr. Heffer

Does my hon. Friend agree that, apart from the inflationary policies carried out by the Opposition when they were in office, one of the reasons for the dramatic increase in prices was that we entered the Common Market? Does he agree that it is only now that some of those prices are beginning to level out, at a much higher level than they should have been in the first place?

Mr. Maclennan

Food prices have increased as a result of our joining the EEC. That was brought about in part by our having to move through five stages of increases to price levels that were more approximate to those of the Community. That was understood and predicted to be inevitable when we took the decision and the country voted in the referendum to remain in the Community.

Mrs. Kellett-Bowman

Is the Minister aware that when the cost of living rose in 1978 by 8.4 per cent., only 0.4 per cent. of that was due to the 7.5 per cent. devaluation of the green pound, whereas twice as much—0.8 per cent.—was due to an increase in car prices? Does he not believe that we must have an increase in British agricultural output if we are to maintain a steady supply of food to consumers and to sustain our balance of payments in the coming years?

Mr. Maclennan

It is certainly the Government's policy, as described in the recent White Paper, to see increased agricultural production where it can be achieved efficiently and competitively. For that purpose, it is necessary that from time to time farmers' support prices be increased. That is a recognised part of the Government's policy.