HC Deb 30 October 1980 vol 991 cc689-91
12. Mr. Jay

asked the Minister of Agriculture, Fisheries and Food what is the Government's latest estimate of expenditure on the common agricultural policy in 1980.

13. Mr. Leighton

asked the Minister of Agriculture, Fisheries and Food how the figure for the guarantee section of the EEC budget to pay for surplus products in 1980 compares with 1979.

Mr. Peter Walker

The Community's expenditure for 1980 is expected to be kept within the £7,600 million included in the original published Community budget for 1980. Of that total, £3,400 million relates to export refunds compared with £3,100 million in 1979 and £1,600 million relates to internal surplus disposal measures compared with £1,000 million spent in 1979.

Mr. Jay

Is it true that subsidised grain, as well as subsidised butter, is now to be exported by the EEC to the Soviet Union?

Mr. Walker

With regard to reports that appeared today about certain forms of feedstuffs being exported to the Soviet Union, a meeting of the management committee in Brussels is taking place today to discuss the matter. From the beginning the British Government have suggested that the EEC should examine all exports—not just grain—to the Soviet Union. At that time such action was not considered essential, either by the Commission or the other member States. If the reports are correct, they will substantiate the view perpetually propounded by the British Government. I hope that in future the Community will abide by our suggestions.

Mr. Leighton

Does the Minister accept that the guarantee section, which subsidises the food mountains, is becoming more expensive? Is he aware of the answer given to my hon. Friend the Member for Newham, South (Mr. Spearing) on 28 October, that instead of it costing 10 million units of account as it did this year, it will cost 12 million units of account next year? Is it not a fact that the CAP is becoming more horrendous every year? Would we not be better off outside it?

Mr. Walker

A year ago the two worst features of the CAP in terms of cost were the surpluses in dairy products and sugar. The butter mountain has been reduced by one-third during the past 12 months, and instead of paying export restitutions for sugar we are now obtaining rebates because the world price is higher than the Community price. There has been a substantial improvement in those two sectors.

Mr. Archie Hamilton

Does my right hon. Friend agree that we could make better use of the CAP resources if we were to change to a subsidy system, rather than the intervention buying system, especially for perishable goods?

Mr. Walker

Yes, Sir. I am no supporter of the intervention system for perishable goods. That is why it was an important breakthrough in the Community when we agreed to the premium payment system for lamb. By being able to point to the success of that scheme I hope that we can persuade the Community that it is a better system to ensure that perishable goods go to the housewife, instead of to the stores.

Mr Spearing

If £3,000 million is being spent through the CAP on support for milk and dairy products, why is there a difficulty in the balance of retail and wholesale production of milk in Britain, which, as the Minister knows, is threatening the dairy industry?

Mr. Walker

I do not think that that is the case. There is a considerable future for the British dairy industry. We have the doorstep delivery service, with a guaranteed high level of liquid milk sales. There is considerable scope for improvement in the manufacturing side of the dairy industry, as has been shown this year by our substantially improved exports of dairy products to the Community and our much larger share of the domestic market.

Mr. Bruce-Gardyne

Will it remain my hon. Friend's intention broadly to oppose increases in Community prices for foodstuffs already in surplus? Is he satisfied that the present position of the domestic green pound is logically compatible with that objective?

Mr. Walker

I think that my hon. Friend was absent when I pointed out that on the question of the green pound, the total effect on the retail price index was one-third of 1 per cent. As much of industry is complaining about the adverse effects of the level of sterling upon our export performance in industry, perhaps it is an advantage that in the sphere of agriculture the adverse effects are dealt with by a mechanism agreed within the Community.

I shall not comment on the question of price fixing, which is many months away. We shall judge the position on the merits and the facts an figures that are then available to us.