HC Deb 14 November 1979 vol 973 cc1349-57
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker)

With permission, Mr. Speaker, I should like to make a statement about the Council of Agriculture Ministers in Brussels on 12–13 November at which I represented the United Kingdom.

No decision was reached on the sheep-meat regime, and further discussions will take place at the December meeting of the Council. In the discussion that took place, we had support from other member States for our view that there should be no form of intervention. The French and Irish Ministers seem no longer to be pressing for a renegotiation of the GATT arrangements with New Zealand and other third countries—a proposal rejected by the Commission, the United Kingdom and all other member States.

I made it clear that any transitional system of premium payments would have to be fair to the United Kingdom and not result in the British taxpayer simply paying for other countries to retain benefits that arose from the illegal import controls imposed by the French Government.

The Council discussed proposed measures on wine, structures, alcohol and potatoes but no progress was made.

Mr. Mason

The House is obliged to the right hon. Gentleman for his statement and appreciates especially that he regularly reports back from the meetings of the Agriculture and Fisheries Councils even though, as he has indicated today, there is little progress to report.

On sheepmeat, will he assure the House that at the December Council he will protect New Zealand's right to export to the Common Market and particularly to the United Kingdom? Also, although at this stage intervention seems to be ruled out, if he is pressed further at the December Council, will he state that France, on the basis of its own social and political grounds, can fund intervention itself and that there should be no funds for that purpose from the Common Market or the United Kingdom? Will he continue to bear in mind the cost of free access of sheepmeat to France on the British consumer? As he knows, British sheepmeat could rise in price by up to 20 per cent. to the British consumer, with a possible knock-on effect on other meat prices as well. What safeguards has he in mind for the British consumer?

As for our own sheep farmers, has the right hon. Gentleman anything to say today about the hill livestock compensatory allowances? If any group of people in the agricultural community in Britain has suffered in recent months and has a genuine case for help, it is the sheep farmers on the hills. I hope that the right hon. Gentleman will be able to say something positive about that today.

Were there no discussions on milk, on the co-responsibility levy, on sugar and on a quota, and were there any preparatory discussions on the restructuring of the CAP?

Mr. Walker

Sugar and the restructuring of the CAP were not on the agenda. We dealt with those matters at the previous meeting. I guess that they will reappear on the agenda at the December meeting.

I can give a categorical assurance that under no circumstances would we change the present arrangements for New Zealand unless it were at the request of the New Zealand Government on a voluntary arrangement that they wanted for their benefit. If they do not want such a change, we shall keep the existing arrangements and would certainly agree to no change in them. If there were intervention in France, it should be at the cost of the French Government. I assure the House in no way will the Government support Community financing of an intervention policy on sheep-meat.

As regards lamb and hill livestock subsidies, there was an increase of 50p as a result of last winter. I promised a review. It has taken place. The Government will make an announcement on the result of it. The right hon. Gentleman cannot have it both ways. He cannot say that he is sympathetic with the British hill farmer but wants lamb prices to the consumer to be kept down.

Mr. Peter Mills

I congratulate my right hon. Friend on the stand that he takes on these matters. Does he agree that as this is a national problem in France, with social implications, the French should pay the premium or the deficiency payments? Why should the Community as a whole have to pay for this? Surely national problems should be dealt with by the national Exchequer.

Mr. Walker

I agree with my hon. Friend. When the Community changes a regime, it makes transitional arrangements for those affected. The Government make the clear point that the French and Irish prices of sheepmeat are totally related to the illegal actions of the French Government over the past two years.

Mr. Donald Stewart

Is the Minister aware that his statement that no decision had been made on sheepmeat means that the French are winning, as they will shortly concede the matter when the issue is finished for this year? What action does he intend to take on that? Secondly, will he repeat his assurance that the fishing issue will be kept separate and not mixed up in a future package deal?

Mr. Walker

On the first point, the contrary is true. The French Government have been demanding an immediate Community-financed sheepmeat regime. The French Government would be winning if we agreed to that. However, we have totally disagreed.

Mr. William Hamilton

As the United Kingdom is the most lucrative market for European food producers, does not that put us in an extremely strong negotiating position? Will the Minister seriously consider retaliatory action against the French, who are deliberately defying a European Court of Justice statement?

Mr. Walker

I understand the hon. Gentleman's suggestion—indeed, it has been suggested by many people—that we should immediately retaliate. I ask the House to judge by results. My judgment is that the French Government are now discovering that their actions are creating a considerable disadvantage to France in the Council of Ministers. There is a range of matters of immense importance to France. I judge that soon the French Government will sensibly decide to comply with the law. If in the interim period we had decided to disregard the law in exactly the same way, and other Com munity countries had done the same, we could have discovered a range of factors adversely affecting all European countries. I much prefer to lead the pressure on the French during this period as I believe that it will be successful.

Mr. Fletcher-Cooke

Is it seemly for my right hon. Friend to sit down with the French, while they are in contempt of court, and discuss new rules until such time as they have shown their willingness to obey the present rules? What is the point of discussing new regimes and new rules which can be broken in just the same way as the French are breaking the present ones?

Mr. Walker

That point is perfectly valid. It was made clear by the other members of the Council of Ministers and myself. This is how we proceeded tactically. We said that we should have every right to show total contempt of the discussions and to retaliate in a similarly illegal way but pointed out that if the French continued that would be the result for the whole of Europe. I believe that we shall succeed in making the French act legally without doing considerable damage to Europe as a whole.

Mr. Wm Ross

Is the Minister aware that there is not a common market for livestock products for the Nine—only for the Six? The French livestock authority, has the right to impose restrictions on imports from Denmark, the Irish Republic and the United Kingdom. Was that matter raised by the Minister at the recent meeting? Does he now intend to seek from the House powers to impose restrictions on imports into the United Kingdom to protect our farmers?

Mr. Walker

The French Government have not had such rights since 1 January 1978. That is why they are acting illegally. France decided to exercise the law correctly in relation to Ireland but to act illegally towards us. The European Court found against the French. They are now finding that their negotiating position and standing in Europe are fast deteriorating, to their national disadvantage, as a result of their attitude. That is why I believe that they will change their attitude.

Mr. Jay

Does the Minister's welcome assurance on New Zealand apply both to sheepmeat and dairy produce?

Mr. Walker

There are two different positions. The legal right of access of dairy products finishes at the end of 1980. Therefore, the New Zealand Government are currently renegotiating with the Commission a continuation of the voluntary arrangements that have existed up to now. They have a legal right under GATT, which preserves their position for all time.

Mr. David Price

Is my right hon. Friend aware that he has the support of the entire House in the attitude he takes on sheepmeat? Has he succeeded in persuading his fellow Ministers that we must insist on the importation of New Zealand sheepmeat as it is sold on the mass market, and that it is necessary to import it at one end of the year to balance our own production at the other?

Mr. Walker

The position was made clear. The New Zealand issue is said by one or two other member States to undermine immensely the agricultural market. It does not do that. It plays a traditional role in the British market. We intend to ensure that it continues in that role.

Mr. Dalyell

Is the Minister aware that the question of seal management is causing concern in Scotland and the North of England? Is it within the recollection of the Minister that Mr. Gundelach set up a study of the grey seal population in the North Sea? What has become of that study? What action is likely to be taken? Does he agree that the matter should be dealt with by all States riparian to the North Sea and not on a single State basis, as seals do not understand international frontiers?

Mr. Walker

I apologise to the hon. Gentleman. He raised this topic with me previously, but I did not follow it up. I shall now do so. I shall contact Mr. Gundelach and then write to the hon. Gentleman.

Several Hon. Members

rose—

Mr. Speaker

Order. I propose to call three speakers from either side and then the Minister.

Mr. Proctor

How far has my right hon. Friend gone with the fundamental reform of the common agricultural policy? If not very far, could he place the item on the agenda of the December Council of Ministers meeting?

Mr. Walker

My hon. Friend referred to the fundamental reform of the CAP. There has been a discussion on the overall financial problems of the CAP. In terms of the review of price fixing that will take place and the ceiling now being reached on budget expenditure, the Community will be required to decide where its priorities are and where it can make savings. We made clear that from this point onwards, if there is any increased expenditure under the CAP, similar savings must be found. That is bringing a fundamental, new approach to the CAP.

Mr. Hardy

I welcome the belated and mild recognition by the Government of the inadequacies of the European agricultural system and the fact that they have begun a modest effort to secure some improvement. Does the Minister consider that his efforts have been assisted or embarrassed by the line taken in Europe by some of the farmer Tory Members of the European Parliament?

Mr. Walker

All the farmer Tory Members are splendid. They make a good contribution.

Mr. Moate

I congratulate my right hon. Friend on the determined stand he takes on the sheepmeat regime. I hope that he will continue that stance. Has he taken into account the complaints made about the French dumping their apples here at the height of our apple-growing season? Did he raise those allegations at the last meeting of the Council of Ministers? If not, will he do so soon?

Mr. Walker

I have looked at a number of examples of the very low prices notified to me for golden delicious apples in Britain. There is no evidence of dumping from the cases we have examined. If any merchant or producer has evidence of dumping, we will speedily examine it.

Dr. David Clark

Will the Minister comment on the contention, widely held in France, that after the end of this year our health regulations will not prevent the mass importation of French milk?

Mr. Walker

I am grateful to the hon. Gentleman for allowing me the opportunity to make our position clear. In the only legal case concerning milk which has been taken up on health grounds, the Advocate General of the European Court, in his summing up, made a strong recommendation in favour of the British health regulations. Unfortunately, the judgment of the Court was made on another factor—the metric package—and it omitted any judgment on the health regulations. We believe that our regulations are justified and that the Advocate General was right in recommending in our favour. Therefore, we will keep our health regulations. On the evidence so far, we are confident that we shall win when this case is eventually decided by the European Court.

Mr. Hill

Is my right hon. Friend aware that hon. Members on both sides of the House appreciate his determined fight on the issue of lamb exports? He will appreciate that the French will win on this because it is a seasonal market. In his statement he made no mention of pigmeat. If my right hon. Friend listens very carefully, he will hear, throughout the Isle of Wight and Hampshire, the last dying gasps of the United Kingdom pig industry.

Mr. Walker

I am always sensitive to snorts from the Isle of Wight and Hampshire. As for a French victory, I hope that the French will quickly comply with the law. We will not simply have free access to that market then but we will have access free of all levies. Even at those seasonable times when the market has been open to British sheepmeat, our exports have been subject to very heavy levies indeed. In future there will be a considerable improvement.

I am glad to say that prices in the pigmeat industry have improved in the last few months. I hope that they will continue to do so, although I remain disturbed as MCAs are again created with the subsequent disadvantage to our pigmeat industry.

Mr. Foulkes

Will the right hon. Gentleman expand on the answer he gave to my right hon. Friend the Member for Barnsley (Mr. Mason) on the hill livestock compensatory allowances? Our hill farmers have experienced two very bad winters and are now getting less in cast ewes than they were getting four years ago. Will he also indicate whether in future the review will take place at a different time of the year, because now that the hill farmers have put their sheep to market it is far too late for them to be compensated fully for the expenses?

Mr. Walker

The hon. Gentleman should be aware that the last Labour Government were responsible for the timing of the review. As a result of that review, they decided to give a further 50p. We have paid that 50p in accordance with the previous Administration's assessment of the needs because it was not known what prices would be at the latter end of the year. At that time the forecasts were optimistic and I promised that we would review the position in relation to the prices reached at the end of this year. We have fulfilled that promise and I shall announce the result shortly.

Mr. Speaker

Was the hon. Member for Cardigan (Mr. Howells) present when I said that I would call those hon. Members who had been rising? No, I think not. However, in the mood of the House. I think I can call the hon. Member.

Mr. Geraint Howells

May I congratulate you, Mr. Speaker, and the Minister? I congratulate the Minister on his stand in Europe, but can he give us an assurance that he will not accept the intervention system now being proposed by the other European countries? In view of the present problem within the sheep industry, will he consider increasing the guarantee deficiency payment by 20p per kilo forthwith?

Mr. Walker

The answer to the latter question is "No". The answer to the first is that I stated at the Council of Ministers that under no circumstances would the British Government agree to an intervention system in sheepmeat. If, therefore, member countries persist in, and insist on, such a system, there will not be a sheepmeat regime.

Mr. Strang

Contrary to the impression given by the right hon. Gentleman in his reply to my right hon. Friend the Member for Barnsley (Mr. Mason), there is no conflict between the interests of lamb producers and those of the consumers. The present system of headage payments and deficiency payments provides a framework within which we have reasonable prices for consumers and adequate returns for producers. Will the right hon. Gentleman make sure that we retain the deficiency payment system and will he indicate when he intends to make his eagerly awaited statement on compensatory allowances? I think that he will accept, notwithstanding the 50p increase, that the plight of the industry is substantially worse than it was at this time last year.

Mr. Walker

I agree that the industry's position is worse. The previous Government's assessment was wrong and they were not generous enough. In my original statement I made it clear that we would review the matter at the beginning of November, that we would announce the results at the beginning of December and that the payment would be made in January. I hope to make the announcement before the beginning of December. That means that we will comply completely with the review I promised earlier in the year.

In relation to the consumer price and the effect on the sheep market, I hope that members of the Labour Party will make it clear whether they are opposed to or in favour of our producers having free access to Europe. If they are suggesting that free access of British food products to the European market should be stopped in the hope that the surpluses and the difficulty of getting rid of them would force down prices, I hope that they appreciate that that would be of very short-term advantage to the consumers. Such a scheme would destroy the producers, and that is of no use to consumers.

Mr. Speaker

Before I call the right hon. Member for Manchester, Ardwick (Mr. Kaufman) to make his application under Standing Order No. 9, I should tell the House that I have also received notice of an application from the hon. Member for Preston, South (Mr. Thorne). Since it is the same request, I give precedence to the right hon. Gentleman, who made it first.