HC Deb 20 October 1981 vol 10 cc149-75
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 the Council of Agriculture Ministers' meeting in Luxembourg on 19 October, which met under the chairmanship of my right hon. Friend the Minister of Agriculture, Fisheries and Food. I represented the United Kingdom.

The Council had a general debate on the Commission's guidelines for future decisions on the common agricultural policy contained in its report under the Council of Foreign Ministers' mandate of 30 May 1980. There was a constructive discussion, out of which widely differing views emerged. These issues will now be considered by the Foreign Affairs Council in preparation for next month's meeting of the European Council.

I emphasised the very real need both to contain the cost of the CAP and to deal with the problems of surpluses. We supported the Commission's recommendation for a strict policy on prices, particularly for products in surplus, and the need to relate these more closely to world prices. Regarding measures to discourage unwanted production, I opposed those levies on production which discriminate between producers.

I strongly supported the Commission's view that there must be much stricter controls on national aids.

One country, France, advocated restrictions on the import of certain feeding stuffs from third countries. I opposed this because of its adverse effect on food and feed costs.

The changes recommended by the Commission should continue to slow the growth in agriculture spending. I stressed that in our view the rate of growth in agriculture expenditure should be markedly below the growth in the Community's own resources.

The Commission reported on its further discussions in the Netherlands to eliminate rapidly the preferential gas tariff available to Dutch growers. The Commission had sought to remove this distortion from the start of the 1982 heating season. Supported by the great majority of member States, I emphasised again the serious difficulties faced by United Kingdom growers, and the urgency of a solution for the 1981 heating season about to start. Mr. Dalsager, the Commissioner, said that he would be presenting his proposals to the Commission this week, and that they would be for the current season.

The Council also discussed the recent Commission proposals on battery cages for hens. I said that after a reasonable transitional period the cage area for each bird should be increased to 600 square centimetres. I also made clear that there must be on-the-spot inspection to ensure fairness Community-wide. A number of differing views were expressed, but some countries supported the United Kingdom in the improvement of standards. We shall press for progress on this at the next Council.

The French requested adjustments in MCAs to help their pig industry. The Commission refused this.

Mr. Roy Mason (Barnsley)

I am obliged to the Minister of State for his report. I am sure that he is aware of the extreme anger that is felt in the British glasshouse industry, and in the House of Commons, registered by more than 250 Members who signed a motion dealing with the plight of the glasshouse industry. Is he aware that the industry has suffered considerably in recent times due to subsidised gas being provided to Dutch glasshouses, thereby creating unfair competition and cheap imports? Meantime, the Commission has not taken any action against the Dutch, leaving the problem to national Governments to solve as best they can. As a result of, I think, the Minister's pressure within the Council, the Commissioner is now looking at a formula which may equalise fuel costs in the glasshouse industries within the whole European Economic Community. Is that so? When is it likely to be agreed by Ministers? Who will pay?

On the question of battery hen cages, the animal welfare lobby will have to be recognised. There are growing pressures on the subject throughout the Community. I hope that the Minister will bring constant pressure to bear on the other Agriculture Ministers in the Council to achieve harmonisation on larger cage sizes. I believe that we have the best record in the EEC.

Reform of the common agricultural policy is still as urgent as ever. We must vigorously demand action to stop surplus food production, with its subsidised exports and high costs of storage. The latest example is sugar. The African, Caribbean and Pacific countries, already disturbed at the raw deal that they got in the price review, now witness millions of tons of surplus sugar being produced by beet growers in the EEC. They fear that this may be dumped on world markets at subsidised prices, thereby ruining their market.

Although that sugar is at present being stored, the threat will persist. Even now, the stocking of millions of tons of sugar is a further financial burden on the CAP and the Community budget. I therefore ask the right hon. Gentleman and his right hon. Friend, who is Chairman of the Agriculture Council, what they will do to get the guilty members of the EEC—not the United Kingdom, because we have cut back our beet quotas—to stop this absurd and costly process.

Finally, in view of the difficulties that the Minister experienced yesterday, does he visualise any progress being made on the mandate dealing with the reform of the CAP, either at the Foreign Ministers' meeting or even at the summit meeting in November?

Mr. Buchanan-Smith

As the right hon. Member and the whole House know, we are seriously concerned about the position of the glasshouse industry and the unfair competition with which it has to contend. We were not alone in the Council in this regard. We were strongly supported by almost every other country, and we shall continue to press very hard.

We do not yet know the proposals that the Commissioner intends to put forward. I repeat that the Commissioner intends to put forward the proposals this week and they would relate to the current season, not to the 1982 season, to which the Commission proposals related previously. That is a considerable improvement.

As I am sure the right hon. Gentleman knows, we have not stood aside from the problems of our glasshouse growers. In the interim period, until the matter is settled satisfactorily—and it can be settled satisfactorily only on a European basis—we have given £5.5 million towards the fuel costs of our glasshouse industry.

I am grateful for the support that the right hon. Gentleman gave to the line that I took in the Council on battery hen cages. Again, we are not alone. Germany and Denmark, in particular, joined us in pressing for higher and improved standards. We shall continue to work for them.

On the matter of reform of the CAP, I was interested in what the right hon. Gentleman said about sugar. However, I remind him that last year, because of the effect of the common agricultural policy, we protected British consumers from prices in world markets that were higher than in the Community. The CAP acted directly in the interests of British consumers.

As regards negotiations with the ACP countries, I beg the right hon. Gentleman to look at the effect on British refiners. What we agreed in April was a package which raised the prices for ACP producers and which also increased the margin for refiners in this country. I know that the right hon. Gentleman shares my concern for the protection of jobs in the sugar refining industry. Therefore, I hope that he will support the line that we have taken.

As to the mandate discussions going to the Foreign Ministers Council and the European Council, a great divergence of view was expressed yesterday, yet I believe that we had a constructive discussion in which a number of very useful points were put. This matter must now go to the Foreign Ministers and then to the European Council. I believe that we made a very good start on this yesterday.

Sir Derek Walker-Smith (Hertfordshire, East)

Is not the subsidisation by the Dutch of energy for their horticulture proving to be a very protracted and slow-moving saga? Is it not time that concern was reflected in action, and, in particular, what are the Commission's intentions for bringing the appropriate proceedings in the European Court of Justice to quash the infringement of distortion of competition, the prevention of which is specified as one of the cardinal principles of the EEC Treaty?

Mr. Buchanan-Smith

As my right hon. and learned Friend knows, the Commission did not propose to bring forward harmonisation until the autumn of 1982. I and other Ministers there regarded this, as my right hon. and learned Friend does, as totally unsatisfactory. That is why we pressed the Commissioner for earlier action. He has been in discussion with the Netherlands Government, and, given the fact that he will be bringing forward proposals this week in relation to the current heating season, I think that we should wait to see what those proposals are. If we find that those proposals are not satisfactory, we shall certainly press the Commissioner regarding action in the European Court.

Mr. Robert Maclennan (Caithness and Sutherland)

I understand the Minister's arguments against the extension of State aids and the continuing pressure downwards on prices as the Government's general approach to the reform of the CAP, but is he quite confident that in taking the line that he has he will not be putting at risk some British marginal farmers who may be dependent upon State aids in the future?

Mr. Buchanan-Smith

I ask the hon. Gentleman to make a distinction between those aids which originate within the actual State and those which undoubtedly distort competition between different countries and create gross unfairness, particularly for many United Kingdom producers. I accept the hon. Gentleman's point regarding the effects of restriction on prices. What we discussed yesterday was that, in relation to those areas that had difficulties as a result of price policies, one had to look at income aids in particular sections of agriculture in difficulty. That is part of the mandate discussion, but we believe that that must be dealt with on a Community basis and not through national aids.

Mr. John Wells (Maidstone)

Will my right hon. Friend give an assurance that if the proposals that are to be laid this week, to which he has referred two or three times, do not produce any goodies for some considerable time, our Government will take unilateral action on the glasshouse question? We are all grateful for the £5½million, or slightly more, that has been found, but that money has now gone. My right hon. Friend has referred to the current season starting now. The British grower is in great difficulty, and we must have swift action.

Is my right hon. Friend aware that British confectionery manufacturers are having to pay considerably more for their sugar than is paid by their competitors in Europe, which is therefore having a very adverse effect on British confectionery manufacturers?

Mr. Buchanan-Smith

I shall look into the second point. If my hon. Friend has more details, I should be grateful if he would give them to me.

As regards the major point about glasshouse growers, I hope that there will not be need for unilateral action, because on this issue the United Kingdom is by no means alone. Every other country in Northern Europe feels just as strongly as we do. I am sure that if the Commission comes forward with unsatisfactory proposals we shall not be alone in trying to seek a quicker and swift solution. We shall be in the van of that.

Mr. Colin Shepherd (Hereford)

In my right hon. Friend's quest to deal with the matter of surpluses in the forthcoming proposals, and his expressed anxiety in that respect, will he remember that surplus is beaten only by shortage, and that good housekeeping calls for the provision of a modest excess of production over requirements if there are not to be shortages which will cause stress?

Mr. Buchanan-Smith

I certainly agree with my hon. Friend about that. One of the responsibilities that I stressed in the Council yesterday is to maintain the security and stability of supplies to the housewife. Indeed, I say to those who criticise the CAP that this has been one of its achievements. We must not be misled—I am afraid that some people are misled—into believing that small quantities of food available in the world at cheap prices are the right way to found an agricultural policy or food policy for the producer or the housewife.

Several Hon. Members

rose—

Mr. Speaker

Order. If hon. Members are good enough to co-operate with me by asking brief questions, and if the answers are brief, I hope to be able to call all those who have been rising.

Mr. Geraint Howells (Cardigan)

Which products that we produce in this country are in surplus now? How much does it cost to keep them in the intervention system? Will the Minister comment on the marginal land survey and the Government's proposals to help in relation to hill and marginal land? Will those proposals be made known this year?

Mr. Buchanan-Smith

If the hon. Gentleman wants precise figures on the costs of storing what surpluses there are, I shall be happy to provide them. As he knows, for the Community as a whole, the two major products are milk and sugar. I very much commend the good efforts of the milk marketing boards and dairy companies in extending the markets for United Kingdom produce abroad, and in substituting United Kingdom produce for imported produce in this market. That is an area in which we need a considerably greater effort.

The question of marginal land production was not covered at yesterday's Council.

Mr. Albert McQuarrie (Aberdeenshire, East)

Was the question of the regulations introduced by the Minister of Agriculture on the question of the turkey and poultry industries and the banning of imports from France on the grounds of environmental health and Newcastle disease raised at the meeting? If it was, will my right hon. Friend give an assurance that in no circumstances will those regulations be eased so long as diseases are liable to occur, especially when our turkey and poultry industries are so desperately in need of assistance and we are coming to the time when their trade will be beneficial to the nation?

Mr. Buchanan-Smith

Yes, the question was raised. There was no substantial discussion on it because the Commission has asked the United Kingdom to comment on what it is doing. We shall be presenting our comments on this matter before the end of this month.

We would not have introduced this measure if we did not believe that it was necessary for the protection of the health of British poultry stocks. Having introduced that policy, we shall continue to defend it vigorously.

Mr. Stanley Newens (Harlow)

Does the Minister recognise that the longer that effective action to rectify the position of British glasshouse growers is delayed, the greater the damage that will be done to them, because at present they are having to make decisions about next year? Therefore, will the Minister make it clear that the Government will in no circumstances be prepared to stand by and allow the British glasshouse industry to collapse, and, if necessary, that they will take unilateral action to see that it does not collapse?

Mr. Buchanan-Smith

On the first part of the hon. Gentleman's question, he could not have put the point better than I did at yesterday's meeting of the Council of Ministers. I hope that he will at least acknowledge the improvement that we have so far achieved. The Commission is bringing forward proposals not for the 1982 season but for the current season. I accept that growers are now planning their crops for this season. In reply to earlier supplementary questions, I said that if the Commission did not come up with satisfactory proposals we should strongly press for whatever action might be needed.

Mr. Robin Maxwell-Hyslop (Tiverton)

Will my right hon. and hon. Friends get together with their counterparts in Germany, Belgium and France so that all of them put on countervailing duties, as they are entitled to do under the Treaty of Rome? Would not that consolidate and concentrate the mind of the Agriculture Commissioner quite remarkably and enable him to produce an alternative way of dealing with the problem?

Mr. Buchanan-Smith

We are already working in close touch with our colleagues in those countries. If we receive unsatisfactory proposals from the Commissioner, we shall get in touch with them to see what further action may be needed and we shall co-operate with them.

Mr. Thomas Torney (Bradford, South)

Does the Minister agree that since its inception the common agricultural policy has been prejudiced against the United Kingdom farmer, food producer and consumer? Would it not be better if the hundreds of millions of pounds that Britain pours into the CAP were used in direct aids to farmers, food producers and consumers?

Mr. Buchanan-Smith

I do not agree with the hon. Gentleman. As I hope he will acknowledge, the CAP has brought considerable benefits in terms of security of food supply. I hope that he will recognise that over the years of the CAP we have seen a considerable improvement in Britain's self-sufficiency as regards the foodstuffs that we grow. I hope that the hon. Gentleman will stop such sniping at the CAP and that he will acknowledge some of the benefits to both producer and consumer alike.

Sir Walter Clegg (North Fylde)

Is my right hon. Friend aware that he will gain immense support from both sides of the House and from the country for the tough line that he is taking on the growers' problem? Will he tell the public—through the medium of this House—that English tomatoes, especially Fylde tomatoes, are much tastier than Dutch tomatoes?

Mr. Buchanan-Smith

I should like to add that Scottish tomatoes are extremely tasty as well.

Several Hon. Members

rose—

Mr. Speaker

Order. If I were not completely impartial, I would mention another tomato.

Mr. Nigel Spearing (Newham, South)

Did the Council of Ministers discuss the degree to which the common agricultural budget is going under or over target? Does not the right hon. Gentleman agree that, whichever way the budget is going, it is impossible to budget for this matter and that if it is under budget it could be over budget next year?

Mr. Buchanan-Smith

I am sure that the hon. Gentleman will be disappointed to know that the CAP is under budget. We are currently running at about 0.87 of the 1 per cent. of the VAT ceiling. Therefore, the CAP is well within the budget. The hon. Gentleman will also be disappointed to be reminded that during the last three years of the Labour Government, from 1976 to 1979, expenditure grew by 87 per cent., whereas in the three years from 1979 to 1982 it rose by only 33 per cent. I assure the hon. Gentleman that we shall continue with our policy to contain that expenditure, because we have proved that it can be done.

Miss Janet Fookes (Plymouth, Drake)

May I remind my right hon. Friend that the animal welfare lobby, both in this country and in other European countries, will be satisfied with nothing less than the orderly phasing out of the battery system, as advocated by our Select Committee on Agriculture?

Mr. Buchanan-Smith

I am aware of the views held on this subject. I am sure that my hon. Friend would acknowledge that the effect of completely going out of battery production would be to have a dramatic impact on the price of eggs. First, we must try to ensure that we have better-sized cages for battery hens and we must follow the recommendations of some of the bodies that have investigated the matter. Secondly, we should continue to pursue the study of alternative means of production to that of the battery cage. I made that point yesterday in the Council of Ministers.

Mr. Norman Atkinson (Tottenham)

The point that the Minister has made about battery hen cages goes in the right direction, but does he not realise that 600 square centimetres is little bigger than the size of the Order Paper? In any language, to imprison a bird within such a small floor space must constitute absolute cruelty. If the Minister is not prepared to pay the price for the abolition of cruelty to birds, he should be firm in demanding that the floor space in battery cages should be four, five or even six times the size of the bloody Order Paper.

Mr. Buchanan-Smith

rose—

Mr. Speaker

Order. I am not quite sure whether I heard the hon. Gentleman, but if he said what I rather fancy he did say I should tell him that that is not parliamentary language and is not the language used in this House.

Mr. Atkinson

You are right, Mr. Speaker. I withdraw the adjective that I used, and I accept that it was not parliamentary language. At least it makes the point.

Mr. Speaker

I am much obliged to the hon. Gentleman.

Mr. Buchanan-Smith

As the hon. Gentleman will have realised from my statement, we are pressing strongly for improvements in standards and we shall continue to do so. I am glad to say that we have support from other countries. Although we want to improve the standards in relation to battery hens, we must be aware of the likely effects, particularly on the price of eggs. If we abolished the battery cage system and moved to a system of free-range hens, there might be an 80 per cent. increase in the price of eggs. The Government are also responsible for looking after the needs of consumers.

Mr. David Myles (Banff)

Given that the increase in production of milk and milk products has decreased to a trickle, and given that export restitution on milk products costs much less, will my right hon. Friend consider abandoning the collection of the milk co-responsibility levy, which is an increased burden on producers and which could cause the price of milk to consumers to increase?

Mr. Buchanan-Smith

The level of the co-responsibility levy is decided at the annual price review. At the next price review I shall bear in mind my hon. Friend's point. Yesterday, at the Council of Ministers, we made it clear—my hon. Friend was right to point this out—that it makes no sense to have a flat rate levy that the producer has to pay and which in turn raises the price to the consumer. It would be far better to hold down the price of the commodity instead of having the flat rate levy.

Sir Frederick Burden (Gillingham)

Although I accept the problems associated with abolishing battery cages at present, may I ask my right hon. Friend to give an assurance that every other method of egg production will be considered? Today my right hon. Friend has shown that the Government are concerned about the size of battery cages. Will he therefore introduce regulations to ensure that we at least expand the size of battery cages so that the worst cruelty that is now accepted is abolished first in this country?

Mr. Buchanan-Smith

I accept my hon. Friend's point about alternative forms of production. As he knows, this subject is being pursued by the Agriculture Departments in the United Kingdom. Consideration is also being given on a European scale. Yesterday I particularly asked the Commission to co-ordinate the efforts made in the different countries so that the results of research carried out in the different areas could be properly co-ordinated.

Mr. Geoffrey Johnson Smith (East Grinstead)

My right hon. Friend has told the House about the pressure being brought on the Government to drop the ban on the imports of French poultry. Is any pressure being put on the French Government to stop their unscrupulous subsidising of the French poultry industry?

Mr. Buchanan-Smith

I raised that point yesterday in relation to the different national aids that countries give. As my hon. Friend knows, the Commission has declared that some of the French national aids are illegal and others are still under investigation. I assure my hon. Friend that we shall continue to press that point.

Mr. John Townend (Bridlington)

Is my right hon. Friend aware that his statement will be welcomed by the glasshouse industry, particularly as he said that the Commission's proposals are imminent and will apply to the current season? However, is he aware that unless action is taken quickly much of the industry will be unable to survive another 12 months like the last 12 months?

Mr. Buchanan-Smith

Yes. Precisely because of the urgent state of the industry, my right hon. Friend introduced an aid scheme involving over £5½ million. I believe that money speaks better than words, and we have done it.

Mr. Barry Henderson (Fife, East)

After my right hon. Friend's contacts with Ministers and Commissioners in and out of the Council chamber, did he come away from Brussels more or less optimistic of being able to deliver before Christmas a package marked "Common Fisheries Policy"?

Mr. Buchanan-Smith

There was no discussion about the common fisheries policy at the meeting of Agriculture Ministers. There is to be a meeting of Fishery Ministers next week. I might be in a better position to answer that question then.

Mr. Tony Marlow (Northampton, North)

I am delighted that my right hon. Friend is fighting so vigorously for reform of the common agricultural policy. I anticipate that he is not over-optimistic that he will be successful. It will take a long time, but in the meantime will he consider asking the Community for compensation for that part of our food which we buy from the Continent at common agricultural policy prices and above world market prices, which my right hon. Friend himself said yesterday will involve a bigger gap in the future than it has in the past and is a burden additional to that of the budget and support for our own agriculture?

Mr. Buchanan-Smith

I should be interested if, in return, my hon. Friend would suggest giving back to the Community money that Britain gained in instances when prices in Britain were lower than in the world market.

Mr. Gavin Strang (Edinburgh, East)

I should like to comment on the Minister's reply to my hon. Friend the Member for Harlow (Mr. Newens). Is the right hon. Gentleman aware that we accept that he is concerned about the position of the glasshouse industry and hope that EEC action will end the unfair competition from the Netherlands? If that does not succeed, does the Minister accept that there is no alternative to national action, either by a comprehensive national energy policy or national protective measures? Will he give an assurance that the Government will address themselves to these matters quickly if necessary?

Mr. Buchanan-Smith

In relation to national action, money speaks better than words. The Government have already proved that they will not stand aside. The hon. Member for Edinburgh, East (Mr. Strang) has experience in these matters. He will know that it is foolish to anticipate publicly at this stage what we might do when, in the course of this week, the Commission is making proposals to meet our objections.

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