HC Deb 31 October 1979 vol 972 cc1245-60
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith)

With permission, Mr. Speaker, I wish to make a statement about meetings that my right hon. Friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland, and I attended in Luxembourg.

My right hon. Friend, who is this afternoon accompanying the Prime Minister on her visit to the Chancellor of the Federal German Republic, represented the United Kingdom at a meeting of the Council of Ministers (Fisheries) on 29 October, and at meetings of the Council of Ministers (Agriculture) on 29 and 30 October.

The Fisheries Council agreed to set up a high-level group of officials to consider the state of fish stocks and the proposals which the Commission intends to put forward for their future management. This will prepare the way for discussion at the next meeting of the Council on 3 and 4 December, and will enable a fresh start to be made on the negotiation of an acceptable common fisheries policy. The Council also extended to the end of the year, on terms that continue to safeguard the United Kingdom's position, the existing Council decision on fishing operations in 1979.

At an informal meeting of the Council of Ministers (Agriculture), Vice-President Gundelach described the crisis approaching for the common agricultural policy through its rising cost and the impending exhaustion of the Community's "own resources", which finance it. There was a general discussion of possible methods of reducing the cost of the policy, particularly on milk and sugar. The Commission will be making proposals in due course. My right hon. Friend made it clear that the United Kingdom would not agree to any increase in the ceiling on "own resources" or any measure intended to evade effect of that ceiling in limiting the cost of the CAP.

The formal meeting of the Agriculture Council was concerned almost entirely with sheepmeat. My right hon. Friend informed formed the Council of recent developments in relation to France's import restrictions and demanded an assurance that the French Government would comply with the judgment of the European Court by removing immediately and permanently all levies or restrictions of any kind on imports of sheepmeat from the United Kingdom. The French Minister declined to give such an assurance. Other Ministers expressed the strongest disapproval of France's attitude. My right hon. Friend made it clear that this was the first time that a member country had decided positively to ignore the Treaty and the verdict of the European Court, and that this constituted a threat to the very foundations of the Community. The Commission supported the view of my right hon. Friend and stated that the action of the French Government was not just playing with fire but was playing with potential catastrophe. The Commissioner stated that he would be raising this crucial issue at today's meeting of the Commission and would be recommending that it should take action against the French Government to secure early French compliance with the Court's decision.

There was also some further discussion of proposals for a Common Market organisation for sheepmeat, but no progress was made. France proposed the unbinding of the Community's obligations to New Zealand and other third countries under the GATT, so as to enable the Community to control or reduce the level of imports. My right hon. Friend said that in no circumstances would we agree to any diminution of New Zealand's rights. He also rejected French suggestions for intervention measures, and made it clear that we could not accept proposals for Community-financed premiums that discriminated grossly against the United Kingdom, or any regime that did not fully safeguard the interests of British producers and consumers, and New Zealand.

Mr. Mason

We are obliged to the Minister of State for making that statement in the absence of his right hon. Friend.

First, with regard to fisheries, is he aware that there is still a strong suspicion within the industry that the Minister will allow the fisheries policy, endorsed by all parties in the House, and by the industry, to be compromised, and that the new study on conservation and fish stocks, particularly in terms of the social and economic effects of conservation, deepens the suspicion that, in the end, smaller total catches will be allowable and reduced quotas will be forced on Britain? I hope that the hon. Gentleman can once again reassure the House and the industry that the Government intend to stand by the all-party fisheries industry plan that was endorsed in the House on 26 July.

Secondly, on sheepmeat, from what the Minister said it would seem that the French are adopting this intransigent attitude against the Courts' decision to force the Common Market into a new sheepmeat regime in order to gain preferential treatment for their farmers and to frustrate eventual complete free access, as well as threatening the future levels of import of New Zealand lamb into this country.

The hon. Gentleman knows that these are major matters. I wonder whether he can tell us the extent to which he will be able to keep all his Common Market allies with him when the Minister has to battle to resist this opposition.

If free access of sheepmeat is agreed, what will the Government do to protect the British consumer? As we know, there is a vast disparity between sheepmeat prices in France as compared with Britain. Indeed, in France the price of sheepmeat is one-third higher than in Britain. Consequently, when there is free access there will be a merging of price levels. The hon. Gentleman's Ministry gave evidence to the House of Lords Select Committee on sheepmeat, suggesting that prices in Britain would rise by between 15 per cent. and 20 per cent. What assurance can the hon. Gentleman give to the British housewife that that will not happen? It will obviously benefit the farmers, but it looks as though the housewife may eventually suffer.

Finally, what possible methods were discusssed for reducing the cost of the common agricultural policy, especially in relation to milk and sugar.

Mr. Buchanan-Smith

I am grateful to the right hon. Member for Barnsley (Mr. Mason) for his welcome, in general, for what took place this week.

First, our discussion of the common agricultural policy was of a general nature. In that discussion my right hon. Friend put forward, in particular, the need to control prices as the most effective way of achieving a common agricultural policy within proper bounds for future financing. I assure the right hon. Gentleman and other Opposition Members that at the price fixing this summer we achieved the lowest level of any price fixing since we joined the Community. It was lower than any level achieved by the right hon. Member for Deptford (Mr. Silkin) when he was responsible for these matters.

I acknowledge what the right hon. Gentleman said about sheepmeat. In the final sentence of my statement this afternoon I emphasised that the interests of the consumer are extremely important. I emphasise that the real issue is freedom of access to the French market. Freedom of trade is fundamental to the European Community. It is something that is enjoyed by almost every other industry in this country into Europe, and for French industry into this country. The issue at stake is that our sheep industry should also have that degree of free access.

I give the right hon. Gentleman the assurance that in any sheepmeat regime that may be discussed or introduced we shall put the interests of the consumer forward as of primary importance, as well as the interests of the producer and those of New Zealand.

As to what may be done in the present situation, and in other countries within the EEC, I emphasise that this is not simply a dispute between Britain and France; it is a dispute between the Community and France. In that respect it is for the Commission, as the custodian of the EEC and of the Treaty, to decide what legal action should be taken to deal with the present problem. As I said, the Commission meets today to deal with that.

Finally, the right hon. Gentleman rightly raised the question of the importance of fisheries. I repeat yet again to the House that fisheries are not up for trading. The fishing industry of the United Kingdom stands on its own merits. Whether in relation to the budget or the common agricultural policy, matters in connection with the fishing industry stand apart and are not up for bartering. I give the right hon. Gentleman that categoric assurance.

Mr. J. Enoch Powell

Have not the Government yet realised that the success of France in the past in getting her way and placing her stamp on the Community was due to the fact that it was realised that her co-operation with the Community, and even her membership of it, depended upon her getting her way? Have not the Government yet understood that this is the nature of the game and that we shall get nothing which the interests of this nation require unless it is clear that our membership of the Community is what is negotiable?

Mr. Buchanan-Smith

I am disappointed that the right hon. Member for Down, South (Mr. Powell) does not understand the nature or character of the problem that France is posing the Community at present. The French Government have committed an act which has been declared illegal by the European Court. It is also an act that has been condemned by every member Government of the Community. To the extent that this is an illegal act, it is a completely new and unprecedented situation. I ask the right hon. Member to understand that, and the way in which it has to be dealt with.

Mr. Maxwell-Hyslop

Will my hon. Friend reconsider two of the recommendations of the committee on trade and industry in its report on the British fishing industry, namely, the banning of dumping at sea and the banning of transshipping? Unless these recommendations are implemented, there can be no accurate records of the attrition of the fish breeding stock. I hope that this Government, unlike the previous Government, will take those two recommendations seriously.

Is my hon. Friend seized of the point that it is doomed to failure to try to control milk production by reducing the price per gallon? The only effect of that is that producers try to produce still more milk to spread their overhead costs over a greater gallonage. That is the key to any system which will bring the supply of milk into closer relationship with the actual demand for it.

Mr. Buchanan-Smith

I certainly agree with my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) that one cannot neglect any means of trying to contain any additions to the milk surplus and the butter mountain in Europe, and the need to contain supplies. I assure my hon. Friend that in the discussions we had this week, and in those we shall have in future, we looked and will look at all means at our disposal. I believe that restraint on prices is an effective and important means and one that we should seek to follow through.

On fisheries policy, I am well aware of the work done by the sub-committee to which my hon. Friend referred and his participation in that work, In that sense, I am sure that he welcomes the fact that between now and the December meeting of the Council of Ministers on Fisheries there will be a scientific examination at Community level of how fish stocks should be conserved. I believe that at that stage, or in our later deliberations, the points that my hon. Friend raised will certainly be taken into account.

Mr. Jay

As the French habitually break the rules of this organisation when it suits them, why should we keep them?

Mr. Buchanan-Smith

I am afraid that the right hon. Gentleman ignores—chooses to ignore is perhaps a better way of putting it—the crucial heart of this issue. It is not simply a question of rules; it is a question of law. That is what elevates this problem to a much higher and very different level than any other issue faced during the 20 years of the Community's existence. Therefore, I ask the right hon. Gentleman to see the problem in that light and to realise that it is not just a matter of rules but a matter of law.

Mr. Geraint Howells

I congratulate the Minister and his colleagues on their stand in Luxembourg yesterday. I hope that they will stand firm in the future, as their predecessors did last year. Under the Treaty of Rome, are we bound to accept a sheepmeat regime? If so, can the Minister give an assurance that the guarantee deficiency payments scheme will not be traded in for an intervention system in France? Can he also give an assurance that he will not dismantle the marketing system for wool? Also, in view of the crisis in the sheep sector of the industry in this country now, will he consider increasing the guarantee deficiency payment by 20p per kilo to our sheep farmers?

Mr. Buchanan-Smith

The guarantee price for sheepmeat at present is one of the matters that are subject to the annual agricultural review that is about to take place. I am, of course, very well aware of the importance of wool. This is not for consideration at present in relation to the sheepmeat regime.

As to deficiency payments, or what method might be used in a sheepmeat regime, we have already voiced very firmly our concern about the high costs to the Community of an intervention-type system. We shall certainly continue to scrutinise very closely whatever proposals come forward. I give the hon. Gentleman the assurance that until a regime is worked out we shall maintain our deficiency payments system.

As to the necessity or otherwise of having a sheepmeat regime, under the Treaty of Rome it is incumbent upon the Commission to bring forward proposals to the Council of Ministers on the way in which trade in particular commodities should be regulated. That is what the Commission has done in some respects already in relation to sheepmeat. It is that which we shall be discussing in the months ahead.

I thank the hon. Gentleman for his welcome for what I have said this afternoon. Until a regime is worked out and agreed for sheepheat, as the decision of the European Court made clear, there is nothing to prevent the French Government taking their own national action in order to protect the incomes of their producers. That point cannot be emphasised enough.

Mr. Body

When on earth will the Council of Ministers deal with a scandal that is far greater than that of the so-called sheepmeat or butter scandal, namely, the growing surpluses of sugar as production rises and consumption goes down? These massive surpluses of sugar are now being exported to the world market at prices that are most certainly dumping prices, causing Third world exports to be displaced and great destitution to tens of thousands of people in poor countries.

Mr. Buchanan-Smith

As my hon. Friend will have noticed, this was one of the matters referred to in the general discussion in Luxembourg this week, because, alongside milk, the problems of sugar are the next most important in terms of surpluses. My hon. Friend is also absolutely right, particularly in relation to sugar, when he says that this creates problems for Third world countries. It is that aspect that we shall be emphasising in our future discussions.

Mr. Maclennan

I accept that the Minister is right to focus upon the breach of law, which is a Community matter, but does he also accept that the principal damage by this breach of law has been suffered by British sheep producers who, as a result of the closure of the French market at the peak period of their sales season, have suffered a diminution of their returns? What action do the Government propose to take to deal with the damage that is being suffered now? Will the Minister reaffirm that the conclusion of a sheepmeat regime is a wholly separate matter from the French breach of the law that has already occurred?

Mr. Buchanan-Smith

I absolutely accept what the hon. Gentleman said in his closing remarks. There are two separate issues here. One is the decision of the French Government to defy the European Court, which is a legal matter on its own, and the other and longer-term question is whether we have a sheepmeat regime, and, if so, what that should be. That is why I emphasise, in reply to an earlier question, that there is a remedy in the hands of the French Government already to deal with any bridging between those two items. I also accept that prices obtained by British sheep producers are lower than they were at this period last year. There is no doubt that the lack of access to the French market had its influence on those prices. I assure the hon. Gentleman that this is a matter that we have had in mind in all of the representations that we have made in the Council of Ministers.

United Kingdom hill sheep farmers, in particular, had a very difficult time last winter, and they have had a bad time in the store sales this autumn. It is for that reason that my right hon. Friend has brought forward the review of hill livestock compensatory amounts. Indeed, tomorrow we shall be having a meeting with representatives of the industry in relation to what those amounts should be. They are due for payment as from 1 January.

Several Hon. Members

rose—

Mr. Speaker

Order. It is quite clear that if questions and answers are to be as long as those to which we have just listened I shall not be able to call some hon. Members who are hoping to catch my eye. Those who are successful in doing so can help others if they are brief. Otherwise, we shall have to move on.

Mr. Hicks

Can my hon. Friend justify to the House the reasons for the apparent optimism that the review that is to take place with regard to fishing stocks and conservation will demonstrate an indication by the European Council and the Commission of a greater understanding of the United Kingdom situation and will not be just another delaying tactic?

Mr. Buchanan-Smith

I emphasise that we see this as no more than simply a fresh start and an opportunity to open new negotiations. How those negotiations may proceed will be a matter of time. We shall have to see. However, certainly I put no higher emphasis on it than that at present.

Mr. Torney

Does the Minister agree that the only real way to protect British interests in the light of the French action is to act unilaterally? When French milk starts flooding into Britain in January, will he take that kind of action in order to safeguard not only our doorstep deliveries but the jobs of thousands of workers in milk distribution?

Mr. Buchanan-Smith

With respect to the hon. Gentleman, we know perfectly well that all that he is seeking to do is to spread speculative scare stories concerning this situation. I would just say to the hon. Gentleman that if that is the kind of argument that he is putting forward I hope that he will realise that what he is advocating is illegal action, and illegal action cannot be justified even if it is to meet illegal action by someone else.

Mr. Pollock

Does my hon. Friend accept that his probity and sturdy defence of fishing and farming interests are held in particularly high regard in the North-East of Scotland? Further, while I welcome his general assurance about there being no intention to trade off the British fishing industry against any general question of the EEC budget, may I ask for a specific assurance that at the next meeting in December he will bear particularly in mind the vital needs of the fishermen around the Scottish coasts?

Mr. Buchanan-Smith

I willingly give that assurance. I add to that by saying that the one thing that we welcome—the previous Government also welcomed it—was having the attendance, throughout the negotiations, of representatives of the fishing industry from all parts of the United Kingdom. It is our intention to continue to seek their advice and to consult them at every stage of our negotiations.

Mr. John Morris

The Minister repeatedly talks of a breach of the law. What legal action can be taken by the Commission or the United Kingdom Government to enforce the judgment of the European Court? Has the Minister thought of the possibility of a British national suing in the French courts to enforce this judgment or to obtain damages, and would he give help in that event?

Mr. Buchanan-Smith

The present situation, as I emphasised a moment ago, is that the French Government are in dispute with the Community. Matters were clarified at the Council of Ministers on Tuesday as to precisely what the French Government's attitude was. Under the Treaty of Rome the remedy for that rests in the hands of the Commission. The Commission is meeting today to decide what it will do. It would be premature for me, in the House of Commons, on the actual day that the Commission is meeting to decide what to do, to try to speculate on what that action might be.

Mr. Peter Fraser

I warmly welcome my hon. Friend's undertaking that there will be no trade-off of fishing interests in any EEC negotiations. Will he assure the House that in reaching an established fishing policy there will be no trade-off within that policy of inshore interests and historical community rights, particularly around the coastline of Scotland, in view of the resulting social and economic consequences if these industries were to collapse?

Mr. Buchanan-Smith

We welcome the the study of the scientific aspects of conservation. However, we must also consider the very point that my hon. Friend mentioned—the socio-economic aspect and the dependence of communities on the fishing industry. I willingly assure him that that will be a major factor in any renegotiation.

Dr. David Clark

The Minister said earlier that the consumers' interests must be protected. How does he intend to do that?

Mr. Buchanan-Smith

It is quite evident that if a sheepmeat regime that depended totally on intervention were introduced, because of the difference in prices between France and the United Kingdom, it could have a disastrous effect on consumer prices in the United Kingdom. The kind of regime that will operate is one of the matters under discussion. We believe that there are other regimes that would be much better able to look after the interests of the consumer and would balance the interests of consumers, producers and New Zealand. These are the three factors that must be taken into account.

Mr. Myles

I welcome the statement made by my hon. Friend. In the interests of brevity I shall wear only my fishing hat, even though I am also interested in sheep. I welcome the high-level study of the fish stocks and I hope that it will produce an answer very quickly. If the answer is that there are reasonable herring stocks in the North Sea, will the Minister ensure some sort of allocation to North Sea fishermen in order to keep our industry alive?

Mr. Buchanan-Smith

One of the benefits of this committee is that it is starting on the basis of a scientific assessment of the fish stocks. All the national measures introduced by the previous Government and ourselves have been based on scientific advice in relation to conservation. In that sense it is sensible to begin on that basis.

On the question of herring stocks, there is, as of now, no scientific evidence that the stocks have recovered sufficiently to enable us to open fishing. The British Government will resist any attempt to open fishing until we are certain that the stocks have recovered to a level sufficient to allow commercial fishing once more.

Miss Maynard

On the question of freedom of access, does the Minister agree that the French are blocking our lamb in order to use this as a bargaining counter to assist the flow of milk into this country in due course? Does he agree that we now have sufficient evidence to show that the only real solution to this problem for the British people, consumers and producers, is to get Britain out of the Market?

Mr. Buchanan-Smith

The hon. Lady is entitled to make her own speculations about the motives of the French Government. The job of the British Government is to deal with this strenuously and firmly, as we have. The answer to the second part of the hon. Lady's question is "No".

Mr. Hawkins

Will my hon. Friend bear in mind the needs of the British producers of sugar beet in the eastern region of England? I urge him not take too much notice of the views of my hon. Friend the Member for Holland with Boston (Mr. Body), because this industry gives considerable employment not only to farm workers but to transport workers and others in my area.

Mr. Buchanan-Smith

Once again, there is a balance here. While it is up to the British Government to look after the interests of the sugar beet producers, equally, we have our obligations under the Lomé convention and we fully intend to fulfil them.

Mr. Austin Mitchell

I welcome the statement that there can be no sacrifice of our legitimate demands in fishing in order to secure a reduction of the ludicrous budgetary burden that has been imposed upon us. Will the Minister confirm that, whatever the outcome of the study of stocks, no settlement is acceptable that does not provide for a 12-mile exclusive zone, a dominant share in the catch up to 50 miles, and the ability to apply our own national conservation measures to conserve stocks in the waters up to 200 miles? In that way we can escape from this fetish of free access, on this subject at least.

Mr. Buchanan-Smith

I repeat the assurance that the Prime Minister gave to the industry on more than one occasion about our objectives in the negotiations and the principles that must be observed. These are supported by the Labour Front Bench and the industry. I assure the hon. Member that we remain every bit as firm in our support of those principles as we have throughout.

Mr. Speaker

If hon. Members will ask brief questions I will call all those who have been rising since the beginning of supplementary questions.

Mr. John Home Robertson

Is the Minister aware that many of us sincerely hope that the United Kingdom Government will continue to break the rules on fish conservation measures until those rules can be made a little more intelligent? Is he further aware of the depressing effect of the continuing ban on lamb exports to France on the hill sheep farming industry? Will he undertake to take that factor into account—

Mr. Speaker

If the hon. Member continues, another hon. Member will be cut out. The hon. Member really must try to ask a brief question, because we are well over time.

Mr. Home Robertson

Will the Minister take that factor into account in his current review of hill livestock compensatory allowances?

Mr. Buchanan-Smith

The hill livestock compensatory allowances review is a wide one, and all factors will be taken into account.

On the fishing question, we do not believe that the measures that we have taken are illegal. It is true that they are being tested in the European Court, but we believe that we took those measures on legal grounds in the proper interests of conservation and in the absence of a common fisheries policy.

Mr. Straw

Has the Minister seen the report in today's Financial Times in which the reporter said that while the Minister had taken a hard line in negotiations by saying that the French would have to subsidise the French lamb farmers out of their own national budget, he later said that he would consider a Community funding scheme? Is that report correct? If so, does it not represent the first stage of a shoddy compromise by the British Government in letting the French off the hook?

Mr. Buchanan-Smith

The hon. Member is wrong to talk about a shoddy compromise. This Government, and indeed the previous Government, have always shown themselves ready to discuss a sheepmeat regime. We have spelt out our concern over, for example, an intervention scheme, which could be very expensive in terms of resources. We believe that we have approached the negotiations in a constructive manner, as did the previous Government. We will look at any sensible scheme that is put forward and judge it on its merits, subject to the qualifications that I have mentioned today.

Mr. Cryer

Does the Minister not realise that the determination of the French Government to protect French farmers will also be reflected in their attitude towards the common agricultural policy? Does he not realise also that he has not the slightest chance of changing the CAP as long as France remains opposed to any alterations? What does he intend to do about that? Do the Government have any alternatives? Do they envisage any possible use of our membership as a bargaining weapon by saying that if the alterations are not made this country will withdraw from the EEC? The British people would be delighted.

Mr. Buchanan-Smith

I remind the hon. Member that with a Conservative Government representing the United Kingdom at the last price fixing, we achieved the lowest rate of price increase since we joined the Community——far lower than under his Government. I also remind him that in that price fixing milk prices did not increase. Perhaps the hon. Member did not listen to the statement, but in the longer term, the moment of reality is approaching for the CAP. The CAP budget is now nearing the ceiling of its resources and that, in itself is a discipline that all the Community member States must recognise. Indeed, this was acknowledged in the discussions this week.

Mr. Spearing

Is not the real problem the insistence on free movement of food and agriculture products irrespective of the damage that it does? Will the hon Gentleman confirm that from 31 December this year the derogation on the movement of milk from France into Britain will cease? If he has to choose between the existence of the dairy and agriculture industries as we know them today and obeying the edicts of the court set up under the Treaty of Rome, which will he choose?

Mr. Buchanan-Smith

It is true that within the Community there must be freedom of access. That is something that we have observed in relation to potatoes, for example. As to milk, I must remind the hon. Gentleman that there are restrictions on health grounds, in that we lay down particular standards in relation to the movement of milk. Discussions are currently taking place within the EEC as to what the health standards might be for a Community regime. All I can say is that we intend to maintain those health standards in relation to milk that is available in the United Kingdom.

Mr. Stoddart

Is the hon. Gentleman aware that the British housewife in particular will applaud the action of the French in restricting imports of lamb and mutton since it will keep prices down in our shops? Is he further aware that many of us also agree with the French decision not to bow to the kangaroo court in Luxembourg, and that we wish that the British Government would take the same sort of stand in the interests of Britain?

Mr. Buchanan-Smith

This court was set up under the Treaty of Rome, and under the Treaty of Accession that was passed by this House that court has proper legal status. If the hon. Gentleman is advocating illegality, I hope that he realises precisely what he is saying.

Mr. Leighton

Does not the Minister understand that the French civil service has been well trained to protect the French national interest, usually by dressing things up in Community language, although it is quite willing to break the rules if need be? Rather than berate them, as the Community Court brings judicial decisions into political affairs and is an instrument of federalism, he should welcome this precedent, which we might well want to employ after Dublin on far more important things than lamb chops.

Mr. Buchanan-Smith

The hon. Gentleman must recognise the facts of the case. Room is open to the French Government to look after the legitimate interests of their industry. Those means are open to them if they choose to do so.

Mr. Strang

Is the Minister aware that the Opposition, and some leaders of our fishing industry, are deeply anxious that the proposed high-level group of fisheries officials will be a smoke screen behind which the Prime Minister will negotiate a reduction in Britain's net contribution to the EEC budget in return for future concessions in the Fisheries negotiations? Will he go some way towards alleviating our fears by giving an assurance that any EEC fisheries settlement will be put to a vote in this House?

Mr. Buchanan-Smith

I made it absolutely clear earlier that there is no way in which, in the fisheries negotiations, the British fishing industry is up for trading in any sense at all. If the hon. Gentleman cares to put that kind of construction on my remarks, that is up to him. However, before he asks such a question he ought to consult members of the fishing industry who were present at the discussions in Luxembourg this week.