£ Sterling

HC Deb 05 March 1979 vol 963 cc888-9

10. Mr. David Hunt

asked the Secretary of State for Prices and Consumer Protection if he will estimate by how much the devaluation of the £ sterling, since October 1974, has affected food prices.

Mr. Maclennan

It is not possible to distinguish the effects of the changes in the exchange rate from the many other factors affecting food prices over the period from October 1974.

Mr. Hunt

Will the Minister accept that, even if he were able to calculate a figure, the position would be much worse were it not for the achievements of the private enterprise oil industry in the North Sea? Will he accept, further, that the present position is directly as a result of Government mismanagement which has made life in this country very much more difficult, especially for those on fixed incomes?

Mr. Maclennan

The hon. Member will be aware that so far from the pound sterling having been devalued during the past year it has appreciated against a trade-weighted basket of currencies by 1.4 per cent., which is one of the contributory factors towards the stabilisation of the inflation rate.

Mr. Gwilym Roberts

Will my hon. Friend congratulate the Minister of Agriculture, Fisheries and Food on his determined battle against devaluation of the green pound, and will he ask him to continue this battle, since it is in the interests of housewives in general?

Mr. Maclennan

It is the Government's policy to recognise from time to time that changes in the green rate are inevitable in the wider interest of the economy as a whole. But my hon. Friend is right to point to the determination of my right hon. Friend the Minister of Agriculture, Fisheries and Food to ensure that the interests of consumers and counter-inflation policy are borne very much in mind in the balance against other pressures for change.

Mr. Dykes

In view of the earlier references to the common agricultural policy, does the Minister agree that, notwithstanding the partial recovery of the pound against other European currencies, the green pound differential through the MCAs in effect provides a substantial subsidy to our farm prices, representing one quarter of our contribution to the Community budget?

Mr. Maclennan

I recognise that if we were to abandon altogether the present green pound level it would mean a substantial increase in the price of food. I do not know whether that is what the hon. Gentleman is recommending. It would mean an increase in the food index of about 6 per cent.