Green Pound (Hansard, 2 December 1982)

§ 9. Mr. Hal Miller
asked the Minister of Agriculture, Fisheries and Food what is the present value of the green pound.

§ Mr. Peter Walker
The present value of the green pound is 1.61641 European currency units.

§ Mr. Miller
In view of the considerable benefits to the country from the improvement of the balance of trade in agricultural products, which affects all in the agriculture industry at a time of considerable difficulty and lack of profitability—except perhaps recently to those in the grain sector—will my hon. Friend confirm that there will be no change in the green pound?

§ Mr. Walker
We are correct to pursue our green pound policy, which is in the interests of our balance of payments and of British agriculture. If the Labour Party's proposals to devalue the currency by 30 per cent. were implemented there would be negative MCAs of 33 per cent., which would be pretty destructive of British agriculture.

§ Mr. Maclennan
Now that the transition of Community prices has been completed, and as inflation rates are somewhat more stable, do the Government agree that the time has come—at least from the agricultural point of view—to enter the European monetary system and thus assist farmers who are nervous about the pressure that will be put on this Government, and no doubt future Governments, about the green pound?

§ Mr. Walker
That matter should be put to my right hon. and learned Friend the Chancellor of the Exchequer, not to me.
With regard to the general operation of the green pound and the MCA system, I point out that under the Labour Government, when there were negative MCAs virtually the whole time, the cost of food went up by about 122 per cent. During the period of this Government, when there have been positive MCAs most of the time, the cost of food has gone up by 32 per cent.

§ Mr. Douglas Hogg
Will my right hon. Friend confirm that the recent increase in the volume of exports is largely due to the fact that the MCAs are positive and that if there were substantial devaluation of the type recommended by the Opposition it would be wholly destructive to the pigmeat industry?

§ Mr. Walker
Such a policy would certainly do great damage to the pigmeat industry. In 1978, the last calendar year of the Labour Government, imports were increasing and exports were decreasing. Under this Government, imports are decreasing and exports are increasing.

§ Mr. Newens
Before the right hon. Gentleman decides to attack devaluation or anything of this type, will he recognise the great damage that has been done to agriculture and many other sectors of our economy by the very high interest rates that have been necessary to maintain the pound at existing parities?

§ Mr. Walker
I know that the hon. Gentleman rejoices in the fact that interest rates have come down so much over the past year. I am sure that if he looks at the performance of British agriculture in terms of production, export, import saving and everything else he will know what a creditable and superb record it is.