HC Deb 23 January 1980 vol 977 cc441-52
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker)

With permission, Mr. Speaker, I wish to make a statement about the Council of Agriculture Ministers' meeting in Brussels on 21–22 January, at which I represented the United Kingdom, with my hon. Friend the Minister of State.

The Council had a general discussion on the proposals on milk and sugar which the Commission put forward in December. The Commission confirmed that it would be changing these proposals and that new proposals, together with proposals on the price fixing, would be made on 6 February. I stated the urgent need to achieve savings in expenditure on the CAP but pointed out that these savings must be made in a way that did not discriminate against any one particular country.

In this regard, I confirmed that the United Kingdom Government would not agree to any co-responsibility levy which provided exemptions to exclude from the levy a substantial percentage of producers in other member States. I also confirmed our objection to the original proposals for a sugar quota which resulted in a larger cut for Britain than for any other country. The Commission confirmed that it would be reviewing the sugar quotas, taking into account the much higher production of the United Kingdom during 1979.

I expressed the necessity to confirm the difference between savings in expenditure and increases in income obtained from levies. On the Commission's original proposals, in 1980 85 per cent. of what were described as savings would in fact be increases in income derived from levies.

In a discussion on sheepmeat, I strongly objected to the fact that the French Government continued to disregard both the treaty and the findings of the European Court. The Italian Presidency and the Commissioner pointed out the damage that this was doing to the Community and urges the French Government to comply with the decisions of the European Court so that progress on a permanent sheepmeat regime could be made in tolerable climate.

The French Minister was asked during the meeting to confer with the Commissioner on legal interim measures that would enable the French Government to comply immediately with the Court's decision. After discussions with the Commission, the Commissioner had to report that the French Government were unwilling to pursue any of these legal interim measures that were available to them.

The French pressed for a commitment on common measures which would include intervention. I pointed out that seven member States had opposed intervention and that we remained totally opposed to any intervention within a sheepmeat régime. At the end of the discussion, the Italian President expressed his regret that the French Government were unwilling to agree to comply with the law and stated that it was now the Commissioner's duty to take every action available to safeguard the treaty. The Commissioner informed me of the further legal action being taken against the French, and I presume that, with the instruction of the Presidency and the general views of the Council, the Commission will now seek an interim injunction from the European Court against the French illegal actions.

In a discussion of additional support measures for wine outside the agreed wine package, I pointed out the great expense of these measures and the lack of need for them. Therefore, no progress was made towards any decision on this question.

There was a discussion on certain proposals which are part of the structural package. I maintained the United Kingdom's reserve on the whole of this package and pointed out the difficulties that were likely to be involved in funding such a package.

Mr. Mason

The House is obliged to the right hon. Gentleman for that full statement. With regard to milk and sugar, I am pleased to note that fresh consideration is being given to the original Commission proposals. I hope that the right hon. Gentleman will continue to take a firm stand on both these issues, and particularly on the unfairness of the sugar quotas against Britain.

Regarding sheepmeat, will the right hon. Gentleman agree that the French tactics must not be allowed to succeed? Their aim is to delay recognition of the European Court's decision until they can get a favourable sheepmeat regime for themselves in barters and deals on the United Kingdom budgetary problem, on fisheries policy and on the sugar quotas.

Am I right in thinking that, even if the Commission seeks an interim injunction from the Court in order to make France comply, it will still take some weeks, and by then the Minister will be into the agricultural price review with the intransigent French trying to blackmail him and the Council on sugar, milk and so forth? Will the right hon. Gentleman take it, therefore, that we hope that he makes sure that the French do not succeed in their goal?

What is the Council's present view on shipments of grain and subsidised butter going to the Soviet Union, and what is Her Majesty's Government's policy on this issue, since it must stick in the gullet of the British taxpayer that he is subsidising butter mountains in the Common Market and the beneficiary is the aggressor in Afghanistan?

Mr. Walker

I am grateful to the right hon. Gentleman, and I welcome his support on the milk and sugar questions. The points which he made are totally valid. In almost the very words which he used, I expressed to the Council of Ministers that, in my judgment, the French Government were pursuing a tactic of trying to create a major crisis in the Community in the hope that, in order to avoid such a crisis, major concessions would be made to the French viewpoint on sheep-meat. If the Council followed that course, it would, I beleive, be disastrous for the future of the Community.

I think that the important feature of this Council meeting, perhaps more than any other, is that it was clearly seen that this was not a dispute between the British Government and the French Government but was a dispute between the whole of the Community and the French Government. It is, in fact, the whole Community which is being threatened by these tactics, and if they were allowed to succeed and bring benefit to France, that would be against the interests of the Community as a whole.

The right hon. Gentleman asked about the time scale. The application for interim measures can only be taken once the two cases which the Commission is bringing against France are in the Court. One action is already in the Court. The second, which is on the levy, will be in the Court within seven days. If an application for interim measures is then immediately brought, the total time scale will be three to four weeks before the Court could actually decide and order the interim measures.

There was no discussion on butter, although there was a discussion on grain, on which the Council agreed to comply totally with the insistence of the Council of Foreign Ministers at their meeting that there be no replacement by the Community as a whole of the American cereals going to the Soviet Union.

With regard to butter, it has been the consistent position of this Government and still so remains that it is appalling for taxpayers throughout Western Europe to provide massive subsidies for butter when the Community has been selling butter to the Soviet Union at 25p a pound which was sold within the Soviet Union at 110p a pound. We as a Government are totally opposed to the continuation of such trade.

Mr. Geraint Howells

Will the Minister agree that it is very difficult for a British Minister of Agriculture to persuade his counterparts to agree to anything in Brussels these days? In view of the seriousness of the situation, will the right hon. Gentleman agree that the Commission should reform the common agricultural policy if we are to save a great deal of money?

With regard to the export of lamb, does the Minister agree that the ban will not be lifted this year? Because of the serious plight of the sheep producers, will he consider increasing the deficiency or guarantee payment at the price review this year?

I am sure that the dairy and sugar producers in Britain are pleased that he is taking a firm stand on their behalf on Europe. Will the Minister say what are the latest developments on aid to marginal farmers in Britain?

Mr. Walker

It must be recognised that there is an existing CAP that has a budget of £8 billion. That is of considerable social and economic consequence to many of the member States. A radical and dramatic reform of that policy is not possible without causing considerable social and economic disruption within Europe. It is not for the Commission to reform the CAP; it is for the member countries collectively to do so. A major reform is necessary, but, for obvious reasons, it is unlikely to take place within a matter of weeks or months.

On the question of sheepmeat, this year I believe that the French will comply with the law and that there will be free entry to the market. I do not believe that after a Court decision, five months delay and an interim injunction, the French Government, in the face of opposition from all member States in the Community and the Commission, will pursue their action.

I enjoyed perhaps less than anybody the frustrations of the past few months. I am sure that in the interests of Europe it has been right to work through the Commission, to go through the right procedures, and to rally the whole of the Community against the French action. I hope that within the next month or two we shall succeed in opening the market.

The hon. Member for Cardigan (Mr. Howells) knows of, and has personally welcomed, the substantial increases made in hill farm subsidies. By that act alone, we have shown that it is our intention to ensure that sheep producers in Britain do not suffer.

Mr. Farr

I congratulate my right hon. Friend on being so firm about the co-responsibility levy for milk, the unfair suggestion about sugar and the other negotiations on French lamb, in all of which the House will support him in taking a strong and robust line.

With regard to the export of grain from Britain or Europe to Russia, I urge him to consider the large contracts that are already signed and under way with Poland and other Iron Curtain countries, and to ensure that Russia does not import excessive amounts through the back door.

Mr. Walker

I am grateful to my hon. Friend for his remarks on milk, sugar and sheepmeat. It is the policy of all Community countries that any exports of grain to countries such as Poland should be in line with the traditional volume of exports that have taken place to those countries. The Government believe that that is a right decision. Continuing sensible trade arrangements with these countries—but not on the basis of increasing exports to allow them to assist the Soviet Union—is the correct policy.

Mr. Wm. Ross

Surely it is clear to the Minister that the French intend to protect the income of their lamb producers at all costs. They will not submit to any measures that do not provide that income in the future.

Will the right hon. Gentleman expand on paragraph 8 of his statement, which is interesting but does not tell us very much?

Mr. Walker

I take the opportunity of the hon. Member's remarks to point out categorically to the House that the decision of the Court and the position of the treaty do not demand that sheep producers in France should suffer a drop of income. They have a perfectly legitimate, legal right under the treaty to provide aids to their sheep producers, as long as there is not a sheepmeat regime, that will maintain their incomes. The claim that the French Government are taking such action to defend their producers because there is no other way is a total myth.

The talks that took place yesterday between the Commission and the French Government were for the purpose of telling the French Government of the methods that they could employ, at their expense, to defend their sheep producers. I do not believe that the French will continue to persist in violating the treaty and the European Court's decision. It is not in the interests of their sheep producers to do so. I believe that they are taking this action to provide a bargaining position within Europe, and I intend to see that they do not succeed.

Paragraph 8 of my statement refers to structure packages. It is a series of regional aids to various parts of the Community that affects a whole range of countries, including parts of Britain. The totality of that package is expensive, and, in our judgment, is not cost effective in its present form.

Mrs. Kellett-Bowman

Will the Minister accept, on behalf of my farmers, my thanks for his extremely firm stand on the co-responsibility levy? Can he go further and say what will happen in four weeks after the interim injunction is passed? If the French do not comply, what are the means by which the interim injunction can be enforced?

Mr. Walker

It is the first time in the history of the Community that a member State has decided to continue to defy a decision of the European Court. There is always some acceptance that a Court decision might not be complied with within a few days, or even a few weeks, of the decision, as it may cause difficulties and rearrangements may have to be made. A community such as ours, would be tolerant in such circumstances.

When it is a question of five months' delay after a decision, with the Commission returning to the Court for further action, and the Court then ordering an interim injunction on the principles on which it has judged five months previously, I believe that for a member State to continue to act against the law and against the treaty would be intolerable to other member States. It would be for those member States, perhaps at a higher level than that of the Agriculture Ministers, to discuss what action needs to be taken to ensure that all member States comply with the treaty.

Mr. Maclennan

Why has the Minister apparently abandoned his claim for damages against the French Government in the European Court for the losses already suffered by the sheepmeat industry? Is he aware of the growing concern, especially among hill sheep farmers, that there is a weakening in the present market for fatstock that will be reflected in the autumn store prices? Although the Government are right to say that the case is between the eight member States of the Community and France, the principal sufferers are the farmers and hill sheep farmers of Britain. What will he do about that? Will he listen to the point made by the hon. Member for Cardigan (Mi. Howells) about increasing the guarantees?

Mr. Walker

As the hon. Gentleman knows full well, because he has tabled questions on the subject, the Conserva- tive Government increased the payment to the hill sheep farmers from the rather miserable 50p offered by our predecessors to a sum that is a considerable multiple of that figure. The result was to restore confidence that would otherwise have been lost.

I have dropped no claim for compensation. I have worked quickly through the Commission. It was the Commission that asked me for the figures on damage that had been done to both the British Government and the producers as a result of the illegal action by France. I have supplied the Commission, at its request, with that information and with the figures. In my judgment, it is the duty of the Commission to ensure that the treaty and the law are enforced.

Mr. Stanbrook

Is the Minister aware that a great many British people do not understand why we are being so beastly to the French, bearing in mind that they are pursuing policies similar to our policies in the EEC, namely, those directed at the national interest? Would not a little more intelligence on all sides be helpful in securing an amicable settlement with our most-needed ally in Europe?

Mr. Walker

No member State has pursued its national interest to the degree of, first, totally violating the basic principle of the treaty and, secondly, totally ignoring a major decision of the European Court. When a number of actions were taken against the British Government in the European Court in the lifetime of the previous Labour Government, and whenever those actions were against us, we always complied with the law. I should have thought that my hon. Friend, in view of his considerable connection with the law, would at least suggest that member States should set a good example in respecting the law.

Mr. Torney

In view of what the right hon. Gentleman has said about the rights of the French farmer with regard to the protection of sheepmeat, does he agree that the British sugar industry, and particularly workers in the British sugar beet industry, should have the same right of protection from unfair quotas imposed by the Commission as there is no surplus of sugar in this country? Will he promise to act, if necessary unilaterally, to protect that industry, particularly the workers who would otherwise be unemployed if the French get away with the quotas that they want to impose on it?

Mr. Walker

The hon. Gentleman mentioned workers in the sugar industry. I am receiving two lots of letters from those workers, one asking that I reduce the quotas in the sugar beet industry for the benefit of the cane industry and the other asking me to increase the quota to the sugar beet industry and lower the quota to the cane industry. Therefore, there is a slight difference of opinion among workers in that industry as to what should happen in regard to quotas.

I think that the quotas suggested by the Commission were unfair. We believe that it is essential to reduce the cost of the CAP by reducing the total sugar beet quota throughout Europe. We believe that all countries, including our own, must make a contribution, but the contribution that was suggested for the United Kingdom under the original proposals was totally unfair and unacceptable to the British Government.

Mr. Donald Stewart

Is the right hon. Gentleman aware that, despite his efforts and those of his predecessors, many of us are becoming rather tired of Ministers of Agriculture, Fisheries and Food deploring the CAP, the lack of an agreement on fisheries policy, the intransigence of the French and so on? There seems to be no prospect that any of those things will be changed for the benefit of the United Kingdom. Will he now start to take steps that are inevitable and, for the survival of the United Kingdom, start negotiations to come out of the Common Market?

Mr. Walker

In the world of the 1980s, with the considerable trading pressures of the new emerging manufacturing countries, of the United States and Japan and the increasing intervention in economic affairs by the Soviet Union, I believe that it would be totally disastrous for Europe to become divided. The need is for it to become much closer.

Several Hon. Members

rose—

Mr. Speaker

Order. I propose to call the five hon. Members who have been rising to speak, but I urge them to be brief.

Mr. Bruce-Gardyne

Will my right hon. Friend confirm reports that have appeared in the press to the effect that he has told his colleageus that the Government are ineradicably opposed to any increase this year in the price of commodities that are already in surplus?

Mr. Walker

It has remained the Government's policy that in regard to those commodities which are clearly in surplus, and for which there is no strategic purpose in the surplus continuing, it is absurd to increase their price. That is the attitude that we have consistently taken.

Mr. John Home Robertson

Will the right hon. Gentleman vigorously pursue his legal action in order to obtain compensation from the French for the damage that has been caused to our sheep industry by their illegal import ban? If he is successful in that legal action, how does he propose to distribute among the producers who are affected the funds that he obtains?

Mr. Walker

I must correct the hon. Gentleman. The legal action is not a legal action of the United Kingdom Government. It is a legal action of the Commission, which has sought from me information with regard to damages. Obviously the decisions of the European Court with regard to compensation and damages are unknown and are, indeed, difficult to predict as there is no precedent for a Government failing to comply with the decision of the Court. If as a result of these processes there comes a time when compensation is payable, I shall he happy to dwell upon the subject of how I distribute the compensation that I receive.

Mr. Michael Brown

As one who represents a constituency with both a large sugar beet acreage and a sugar beet factory, may I ask my right hon. Friend to state what sort of response he has received from the Commission in reply to his representations?

Mr. Walker

We have received a very important step forward and response from the Commission. As my hon. Friend will know, the quota for Britain was previously based on the average for the previous four years, two of which were very bad years for Britain due to the drought and during all four of which we suffered from massive MCAs against us as a result of the policy of my predecessors. Therefore, we considered that this was an unfair basis. I am glad to say that at this meeting the Commission confirmed that it would take into account the 1979 production figures, which are by far the best sugar beet production figures in British history.

Mr. Dalyell

If ethyl alcohol was not on the agenda, why not?

Mr. Walker

Because it was not put on the agenda.

Mr. Dalyell

This affects many jobs in the Grangemouth and Falkirk area—

Mr. Speaker

Order. Out of fairness, I shall call the hon. Gentleman, but he ought to wait until he is called a second time.

Mr. Dalyell

The Minister knows full well, and so does the Secretary of State for Scotland, that this is a matter of great industrial importance to this country. It is not good enough to come here time after time and casually to say that it is not on the agenda. Surely it is up to the right hon. Gentleman to put it on the agenda.

Mr. Walker

I am sorry, but the agenda is not decided by each of the nine member States. In this connection, we discussed a proposal for the distillation of wine into alcohol and, therefore, there was a discussion relating to this topic. We made clear what the hon. Gentleman and the Commission know to be the position of the United Kingdom, which is that we are anxious to preserve a whole area of industry in this country which would be in jeopardy if the wrong decisions were made.

Mr. Myles

I, too, congratulate my right hon. Gentleman on his actions up to now, but may not the time now be right, when the French are softened up a little, for he and the French Minister of Agriculture to get together behind closed doors to settle the lamb issue?

Mr. Walker

I have had talks with the French Minister on several occasions and have discussed that topic with him outside the Council of Ministers' meeting. My hon. Friend's suggestion that that is the way to solve this problem fails to understand that this is not a dispute between the British and French Governments. It is a dispute between the Community as a whole and the French Government. What the French Government are doing is a violation not merely against this country but against the Treaty of Rome and the decision of the European Court. It is the entire European Community which should be concerned with that fact.

That is why I believe it is right that the negotiations, talks and agreements should take place between the French Government and the Commission. It is not a matter for bilateral talks between the British and the French. From the very beginning, we have been willing to allow the French Government to take legal actions to protect their sheep producers, and there is no reason why complying with the law should in any way damage their producers. That remains the situation.

Mr. Strang

Following the right hon. Gentleman's answers on the question of sheepmeat, is it not quite intolerable that he should be negotiating with the French and with other member Governments on a new EEC sheepmeat regime under the duress of the continued French defiance of the European Court? Has not the time come when the right hon. Gentleman should make it clear to the Commission and to his partners that he will not participate in any more negotiations on a new regime until the French comply with the European Court's decision?

Mr. Walker

No, because the only truth in that suggestion would be if our negotiating position was in any way affected by the French Government's attempts at duress. So long as our negotiating position is totally unaffected by that duress, the whole Community recognises that we are willing to negotiate a perfectly sensible regime, but not one dictated to us by the methods of the French Government.