HC Deb 16 June 1981 vol 6 cc861-6
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 Luxembourg on 15 June, which I attended accompanied by my right hon. Friend the Minister of State.

The Council was mainly concerned with business outstanding from last April's price settlement. I recalled to the Council the undertaking that I had received from the Commission at the time of the price fixing that clawback on sheepmeat would be calculated to take account of the price of export quality sheepmeat. The Commission had undertaken to put a proposal in this sense to the Management Committee but had not yet done so. There was no doubt in my mind that this could be done in a perfectly legal way, and I pressed the President of the Commission, Mr. Thorn, to make a proposal as soon as possible. Mr. Thorn promised to put a well-balanced proposal to his colleagues in the Commission at once. In the meantime, I have maintained a United Kingdom reserve on other parts of the price fixing.

On other matters connected with the price fixing, the Greek quota on iso-glucose was reduced from the Commission proposal of 16,500 tonnes to 13,000, to bring it more into line with that prevailing in other member States. No agreement was reached on the transport and storage subsidies for sugar from the French overseas territories.

Progress on the question of controlling the use of hormones in animal husbandry and medicine was again blocked by one member State.

A preliminary discussion was held on a Community support system for cotton, but no decisions were taken.

Mr. Roy Mason (Barnsley)

I thank the right hon. Gentleman for his statement, but I hope that he will continue to oppose the use of synthetic hormones in animals for human consumption.

Secondly, assuming that the right hon. Gentleman vetoes the finalisation of sugar prices in order to get a better clawback price for our sheepmeat exporters, can he tell us what effect the projected sugar price levels will have on the future of the African-Caribbean-Pacific cane sugar producers?

Thirdly, is the right hon. Gentleman aware that the Common Market sheepmeat regime, of which he boasted to the House when it was negotiated last year, has been disastrous for our sheepmeat exporters? They have suffered a loss of 50 per cent. in their export trade with Western Europe. Some companies are said to have gone bankrupt because of it, and on the operation of the deal the French seem to have beaten him again. Therefore, can he say what the prospects are for a satisfactory settlement for our traders at the next meeting of the Council of Ministers, and how he proposes to compensate those who have suffered a severe loss in trade, even to the extent of bankruptcy, as a result of his bad deal with the EEC?

Mr. Walker

On the question of the use of hormones, there was agreement by all the member States that the use in animals of the substances known as stilbenes and thyrostatic substances should be banned, but, alas, this was not agreed to, because of a reserve by the French Government on the issue. However, I hope that shortly there will be an agreement.

The right hon. Gentleman referred to sugar prices. There is no disagreement on the price that will be paid to the ACP countries, but at the moment discussions are still taking place about meeting the transport costs of ACP countries for cane sugar. The Commission is reporting on the matter and I hope that that report will be completed in the near future.

The right hon. Gentleman also referred to the sheepmeat regime. I know that throughout the negotiations he was highly sceptical of our ever reaching an agreement. I hope, however, that he recognises that the agreement provides British sheep producers with the best guaranteed returns that they have had for years, and provides the British housewife with the cheapest lamb that she has had for years.

In terms of the export effects of the regime, in the Council of Ministers we decided, when the regime was agreed, to review it in March this year. That was a perfectly valid and sensible agreement. As the right hon. Gentleman knows, because I pointed it out to him, just before Christmas our exports of sheepmeat to the Continent were higher than they had been prior to the regime being in force. Our exports have fluctuated since, and adjustments need to be made. We have already obtained two major adjustments, and I believe that as a result of our negotiating position we will obtain a third major adjustment in the near future.

Sir Paul Bryan (Howden)

Did my right hon. Friend have an opportunity to raise the question of the threat of the French subsidised turkey industry to our turkey industry? If not, when does he think that he will have such an opportunity?

Mr. Walker

I have already had detailed correspondence and discussion about this matter with the Commissioner for Agriculture, Mr. Dalsager. Unfortunately, he has been taken ill and will not be returning to his duties, probably, until the end of next month. But I have been promised by his office a detailed reply and observation on the points that I have raised, and I thought it right to continue my negotiation with the Commissioner who will be in charge of these affairs. Obviously, I hope that quick decisions will be made.

Mr. Geraint Howells (Cardigan)

I am sure that hon. Members on both sides of the House are grateful to the right hon. Gentleman for trying to solve the problems of our meat exporters. Can he clarify what is meant by the "well-balanced proposal" by Mr. Thorn? Which country blocked progress towards agreement on animal husbandry? Finally, will the Council of Ministers discuss the marginal land survey at its next meeting?

Mr. Walker

We hope that the marginal land survey will be completed by October. When it is completed, we will participate in the discussions on how to treat its results.

The agreement on the use of hormones in animal husbandry was blocked by France alone. The French stated that the new Government wished to have more time to consider the matter. I hope that progress will be made at the next meeting.

The hon. Gentleman asked me what Mr. Thorn meant by his "well-balanced proposal". That question should be put to him rather than to me. We have made clear to the Commission what we consider to be a well-balanced proposal, which is a substantial reduction in the clawback for our sheep exporters.

Several Hon. Members rose—

Mr. Speaker

Order. I hope that I shall be able to call all those who have already risen before we move on to the next business.

Mr. Robert Crouch (Canterbury)

Is my right hon. Friend aware that in my constituency, which is a large agricultural area, there is still no lack of support for our membership of the EEC and for working the common agricultural policy? What I am finding increasingly difficult is to obtain acceptance of the fact that not all members of the Community play by the rules, and the question of turkey subsidisation outside the Commission's rules, raised by my hon. Friend the Member for Howden (Sir P. Bryan), is something that really sticks in the gullet. I am sure that you will agree, Mr. Speaker, that I choose my words very carefully. It does rather stick in the crop. Will my right hon. Friend take the gloves off soon and fight for all members of the Community to abide by the rules?

Mr. Walker

Yes. I think that there is no way in which one can have a common agricultural policy and a free movement of agricultural produce across the frontiers of Europe if any one country perverts the fairness of competition by substantial national aids. For an industry like the poultry industry, which can expand very quickly and take a major share of anyone's market, such a situation would be intolerable. We have made this clear to the Commission and we hope that it will accept its responsibilities and act swiftly and effectively.

Mr. David Stoddart (Swindon)

Has the right hon. Gentleman noted the remarks of his right hon. Friend the Secretary of State for Employment, in which he criticised the CAP and said that farmers are getting far too much benefit? Does he agree with that statement? What measures is he taking urgently to achieve a reformation of the CAP, if not its abolition?

Mr. Walker

One important reform that has taken place in the lifetime of the Government is that the CAP is taking not over 80 per cent. of the European budget but 69 per cent.—and it is a declining take.

Mr. Peter Mills (Devon, West)

I congratulate my right hon. Friend on the stand that he is taking, but will he bear in mind that the problem is having a serious effect on slaughterhouses in the South-West and elsewhere? Will he inform the French Minister of Agriculture that enough is enough and that in future we may have to take serious steps to stop French exports of produce into Britain if the French do not allow us to export our agricultural products into France?

Mr. Walker

My hon. Friend will know that the effect of the clawback is not primarily in the French market. In fact, we are exporting more lamb to France than prior to the regime coming into operation. The importance of the clawback lies in our traditional markets in Germany, Holland and Belgium. We are not asking for the elimination of the clawback, which would be wrong in principle. We are merely asking for a proper consideration of the export value of lamb, and this request has been agreed to by the Commission. It was agreed to by the Council of Ministers at the time of the price fixing. All that we are demanding is that both the Council and the Commission adhere to the undertakings that they gave in April.

Mr. Robert Maclennan (Caithness and Sutherland)

What calculation has the right hon. Gentleman made of the effect upon the level of British exports of lamb if the Community accepts his clawback proposals? What calculations has he made also of the impact of the acceptance of the proposal upon the level of French prices? Notwithstanding what he has said, it appears that it is still the French who are opposed to the proposals. Finally, why does the right hon. Gentleman believe that this is an issue that can be settled by the Management Committee? The French appear to be arguing that it is an issue that will have to be ratified by the Council, with their agreement.

Mr. Walker

It is an issue that involves an adjustment of a management formula, and the Commission and the Presidency agree that it is a matter that comes within the jurisdiction of the Management Committee. When we obtained the price fixing, as part of the overall agreement it was recognised that it was a proposal that the Commission would put to the Management Committee. We knew, therefore, that it was a proposal to be decided upon a majority vote and not upon the power of veto. Therefore, we agreed to a price package that included a reference to the Management Committee. Our view that it is a matter for the Committee is supported by many other member States.

Mr. Albert McQuarrie (Aberdeenshire, East)

During his discussions, did my right hon. Friend have any opportunity to take up the reports that large quantities of wine from the EEC have been sold to Russia at discount prices? As the cost of the wine was paid for in part by the British Government, will he take up the matter as one of some urgency, if he has not had the opportunity to do so previously, to ensure that the Russians cease forthwith to obtain the benefits of EEC wines?

Mr. Walker

That is a matter that we have already taken up with the Commission. I shall keep my hon. Friend informed of the progress that is made.

Mr. Bob Cryer (Keighley)

Is the Minister satisfied with the progress that has been made in controlling poultrymeat imports into Britain, bearing in mind inspection standards in France? He will recall that several weeks ago he gave assurances to the House. The matter is one of continuing concern. Has the Minister reached a position in which he feels that it will be necessary to take unilateral action against such imports?

Mr. Walker

I shall be discussing with the poultry industry later this week or early next week the importance of achieving a balance, so that there are equal standards on both sides. I shall discuss with the industry ways in which that balance can be achieved.

Mr. John Carlisle (Luton, West)

When my right hon. Friend met the Council of Ministers, did he discuss with it the real difficulties that the agriculture trade now faces because of the non-payment of restitutions and MCAs? Is he aware that the difficulty caused by the Civil Service strike could lead to the suspension of our exports of grain to Poland?

Mr. Walker

No. This was not a matter for the Commission. It is a domestic matter for the United Kingdom. There is a real problem for both the agriculture trade and the farming community, which are not receiving VAT rebates, intervention board payments and the grants that should be paid to them. I hope that the difficulties will be settled quickly by means of speedy organisation, so that we avoid great damage being done to our export trade and to small businesses.

Mr. Teddy Taylor (Southend, East)

Will the decisions on sugar mean that there will be less dumping of subsidised sugar on the world market, which causes so much damage to the poorest countries in the world? Secondly, is it not right that only last month some of the restrictions on the sale of food and wine to Russia, which cost us a subsidy of £9 million for wine alone last year, were removed and not strengthened?

Mr. Walker

These are matters that are constantly reviewed by the Management Committee. As for my hon. Friend's first question, I am not sure in which way he is arguing. He used to argue that it was monstrous that British consumers were having to pay more. He will know that last year British consumers paid less for sugar, as a result of the Community's sugar agreement. The future for sugar will depend on world sugar price trends. My hon. Friend will know well from his usual consumer arguments that there was considerable stability in sugar prices last year, as a result of having a common sugar regime in Europe.

Mr. Robin Maxwell-Hyslop (Tiverton)

Will my right hon. Friend protect the British consumer from French turkeys that are fed on cancer-inducing agents, which are forbidden as feed in Britain? There is reason to believe that such substances are being fed to French turkeys in Brittany. Will my right hon. Friend protect our consumers by the exercise of his powers to prevent the import of food that may be a danger to health?

Mr. Walker

I cannot comment on that specific issue. If my hon. Friend gives me details, either from France or from anywhere else, of any feeding of animals or poultry that is a danger to health in Britain, they will be speedily examined. I can assure my hon. Friend that such are our stringent health precautions that any measure that is taken by any other country that has an adverse effect on the quality of food and an impact on health in Britain will be dealt with strictly and severely.

Mr. Tony Marlow: (Northampton, North)

At a meeting with farmers in Northampton on Friday their main concern was unfair competition from other Community countries—not only French turkeys, we have been told, but cheap loans and direct support for French agriculture by the French Government. Can my right hon. Friend tell the House what state all these situations are in at the moment, and if the Commission does not come up with a satisfactory solution what he intends to do about it?

Mr. Walker

About £430 million was injected into French agriculture by the French Government some weeks before the French election. A number of the measures within that national aid were, in the view of the British Government, not in compliance with the Treaty of Rome. The Commission has taken action against the French Government and is currently obtaining details of the aids. It has undertaken to the United Kingdom that it will take appropriate action. That is the state of play on French national aids. I confirm to my hon. Friend that we cannot continue with a common agricultural policy if any one member State decides to ensure that it shall enjoy an unfair advantage over other countries through substantial State aids.

Mr. Gavin Strang (Edinburgh, East)

Is the right hon. Gentleman aware that only he would have the brass neck to present the negotiation of a Common Market regime that prevents exports of British lamb to the Continent as a victory for Britain? How can he describe the damage that he has done to British lamb exports as a fluctuation? Will he face the seriousness of the issue?

Mr. Walker

The hon. Gentleman is so wrong on this issue so frequently that I welcome his further intervention from the Dispatch Box. I remember his advancing the same argument prior to Christmas, and subsequently trade increased substantially. He has returned to the argument now that trade has decreased. We have a positive export subsidy on our exports to third countries as a result of arrangements that I made. We have a premium on virtually all the exports that we make to the Continent. Our exports to France have increased substantially. It is our trade with Belgium, Germany and Holland that has currently decreased. If we obtain the adjustment that has been promised by the Commission, that, too, will be changed. It is time that the hon. Gentleman, who failed so miserably in this sphere, applauded a system that has given so much security to British sheep producers.