HC Deb 18 March 1982 vol 20 cc490-4 3.54 pm
The Minister for Agriculture, Fisheries and Food (Mr. Peter Walker)

With permission, Mr. Speaker, I should like to make a statement on the Council of Agriculture Ministers' meeting in Brussels from 15 to 17 March.

Ministers resumed their consideration of the Commission's price proposals for 1982. There were wide differences of view in the Council, but some progress was made in clarifying positions on the major products. Work will continue at the Council's next meeting on 31 March and 1 and 2 April.

An attempt was made to reach agreement on a measure for the distillation of surplus wine into alcohol. With the support of the Netherlands and Belgium, we argued that we were unable to agree upon such arrangements until the consequences for the alcohol market had been studied and until we were sufficiently assured that there would be no unregulated sales that would have a serious impact on this country's industrial alcohol producers.

Mr. Norman Buchan (Renfrewshire, West)

I am grateful to the right hon. Gentleman for coming to the House, even if he did not have much to report, because it gives us the opportunity to pose a few questions.

The Opposition entirely agree with the right hon. Gentleman's opposition to the proposals to convert wine into alcohol. Quite apart from building monstrous lakes and lochs of wine at enormous cost to the British taxpayer, the proposed method of producing ethyl alcohol is expensive, and we must protect our own producers, not least those in Scotland.

Will right hon. Gentleman clarify whether the Soviet Union is purchasing wine from the EEC for 5p a pint?

The statement raises a serious issue. Did nothing happen at the meeting? The Financial Times today tells us that not one iota of what was said was new and that the Minister was simply marking time. How much more time will he take? Is he not playing the game wrongly? Rather than allying himself with those attacking the French, who are attempting to operate national aids, should he not seize the opportunity to open up the Market's tight and stringent regulations to achieve some flexibility, secure independent operation and proper national aids in Britain, support the industry where it should be supported, and thereby give some comfort to our consumers?

Mr. Walker

I thank the hon. Gentleman for his opening remarks. It is right at this time of year, even if there is little to report, to give the House the opportunity to ask some questions. I note the hon. Gentleman's Scottish influence. He is now converting lakes into lochs. We will take that into account in future wording.

With regard to the meeting, as with the previous Government, it is traditional that, before the main attempt to get a price fixing, there should be a meeting at which the various member countries set out their positions and main demands. It was expected that this meeting would be of that kind.

I disagree with the hon. Gentleman about national aids. As he knows, Britain operates legitimate national aids. National aids to hill farms are much better under this Government than they were under the Labour Government. It is our policy to continue that assistance. The aids, which are agreed by the Commission, do not violate the laws of fair competition within the Community. However, our view is that the aids operated by the French are designed purely to give them an advantage over British goods in the market place.

Mr. Buchan

Is it not time that we were given a fairly full disclosure of the nature of the discussions taking place? The Minister still has not told us about that. We have to pick it up from Edith Cresson or President Mitterrand. We have no way of knowing whether what they say is correct. It would be useful if the Minister could tell us whether the overall budget is holding matters up. Will he at some time give us a fuller picture? If not, he will understand that next Wednesday we shall have to explore the matter in some depth.

Mr. Walker

Traditionally, before a major price fixing meeting, there is a debate in the House. That debate will take place next Wednesday. The degree to which I report the details of the discussions takes into consideration the patience of the House.

Mr. Albert McQuarrie (Aberdeenshire, East)

My right hon. Friend will be pleased to know that members of the National Farmers Union of Scotland are delighted at the strength of his opposition to the demands of other member nations. Will he give a firm undertaking to continue that opposition in order to achieve a proper price review to the satisfaction of the British farming industry?

Mr. Walker

Clearly, the object is to obtain a price fixing which takes into consideration the balance of interest between farmers and consumers and their mutual interest in ensuring that production in this country continues at a suitable pace. That will be our objective in the negotiations.

Mr. John Evans (Newton)

Will the Minister answer the question asked by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) as to whether the Russians are buying wine from the EEC at 5p per pint?

Mr. Walker

I do not know the details of the most recent negotiations, but wine has been sold to the Soviet Union, as it has been for many years.

Sir Marcus Kimball (Gainsborough)

Is my right hon. Friend aware that, however long, protracted and even alcoholic the negotiations may be, any revaluation of the green pound would be unacceptable to the industry and, I suspect, to Conservative Back Benchers?

Mr. Walker

I think that the Government's reversal of the green pound policy has been of considerable benefit to British agriculture and to the economy as a whole. That is why we have made it clear that the Commission's proposals to revalue the green pound are entirely unnacceptable.

Mr. Tom Ellis (Wrexham)

Does the right hon. Gentleman accept that one of the most effective and practical ways of reforming the CAP would be to ensure that proposed price increases are below prevailing rates of inflation? Will he try to establish a general rule that no individual price increase should exceed the minimum rate of inflation in any Community country?

Mr. Walker

I think that it is wrong to make a rule about every commodity, as there may be times when it is of advantage to depart from it, but during the Government's period of office price increases in the annual price fixing have been well below the annual rate of inflation and below the inflation in food prices and wages in the same period.

Mr. David Crouch (Canterbury)

I congratulate my right hon. Friend on his strong line on a matter in which British Agriculture Ministers are often less interested. There could have been a trade-off if the Minister had been more interested in apples, lamb and butter. I am glad that we have a British Minister who is concerned about wine. Many millions of gallons are involved. If the proposal had been accepted, the weight of alcohol would have greatly disturbed the balance of production opportunity for industrial alcohol in this country. It is a very serious matter. Will my right hon. Friend consider putting to the other members of the Council, when he meets them again at the end of the month and in April, the suggestion that this alcohol could be turned to uses other than wine, such as food or possible admixture with petrol?

Mr. Walker

We have already made it clear to the Council that we believe that there are better methods of disposing of the surplus than that at present envisaged. We have suggested conversion into animal foodstuffs—a project that one major British company has developed to quite a high degree. The rather ill prepared proposals before us in the past two days were not agreed, because in that form they could have done considerable damage to British industry.

Mr. Stanley Newens (Harlow)

Was the equalisation of fuel costs to glasshouse growers discussed? If not, can the Minister give us any information about current progress on this vital issue?

Mr. Walker

I know that the hon. Gentleman has a great interest in this topic. Bilateral talks and negotiations on this matter took place with Denmark, the United Kingdom, France, Germany and Holland. Having had talks, the Commissioner reported that he felt that there was no reason why agreement should not be reached within the next week and that he would report to the Commission to that effect next week.

Mr. John Farr (Harborough)

Was any progress made towards solving the problem facing British producers with regard to the co-responsibility levy? Secondly, was any progress made on the illicit aid of more than £500 million given by the French to their farmers?

Mr. Walker

Discussions took place on the co-responsibility levy. We made it clear that we opposed the giving of any preference to smaller producers and that on balance we favoured abolition of the levy and a lower price for milk. That view, however, was not shared by the Commission or by many member States. Nevertheless, we made it clear that that was the United Kingdom's position.

On French national aid, since I last reported to the House the Commission has announced that it has commenced legal proceedings against the French Government.

Mr. Dennis Skinner (Bolsover)

Will the Minister get away from all these obscure answers and tell us straight what is happening? Will he guarantee that there will be no overall increase in prices greater than that offered for nurses' wages? If a Treasury Minister can say that, because of the recession and other problems caused by the Government, nurses can have no more than 6 per cent. as that is in the so-called national interest, why should another Minister go to the Common Market and agree with Sir Henry Plumb, leader of the Tories in the European Assembly, to a possible deal of 16 per cent. or a patched-up deal of just below the inflation rate of 12 per cent.? Why does he not tell him that he cannot have more than 4 per cent.?

Mr. Walker

First, I am glad to say that during the Government's period of office nurses' incomes have risen very much more than those of farmers. [HON. MEMBERS: "Oh."] Secondly, I shall not agree any price increases which would raise the food price index to anything like the levels that occurred under the Labour Government.

Several Hon. Members


Mr. Speaker

Order. I shall call those hon. Members who have been rising in their places.

Sir Anthony Meyer (Flint, West)

Is my right hon. Friend aware that there is great sympathy for the almost impossible task that he faces in seeking to protect the longterm interests of British farmers and consumers within the framework of the extremely complicated budget negotiations, which are greatly affected by his own private set of negotiations? Is he further aware that support for his firm stand will extend to any further steps that he may take to achieve agreement?

Mr. Walker

I am grateful for my hon. Friend's support. As always, it is a difficult negotiation of great importance to the agriculture industry and to the British economy as a whole.

Mr. Robert Parry (Liverpool, Scotland Exchange)

Has the Minister received any representations from the edible oil industry about the EEC and economic problems? What plans has he to protect the industry?

Mr. Walker

I have made it clear that in no circumstances will we agree to a tax on oil.

Mr. David Myles (Banff)

As the talks drift closer to the start of the livestock marketing year, I am sure that my right hon. Friend is aware of the concern of livestock producers about the level of support for the next marketing year. Will he make a statement on any alteration in prices and the date from which it will apply?

Mr. Walker

I cannot give assurances about dates from which anything will apply as I do not know when agreement will be reached. However, I can give assurances that the livestock sector in this country will continue to obtain substantial benefit from the sheepmeat regime. The Commission, at our behest, has advocated continuation of the beef premium scheme, so important assurances can be given to British livestock producers on both those matters.

Mrs. Elaine Kellett-Bowman (Lancaster)

Does my right hon. Friend agree that a formula connecting the revaluation or devaluation of green currencies with national inflation rates would be fair both to member States and to farmers and consumers?

Mr. Walker

I know that such a proposal has been floated in the European Parliament. Certainly, it would be most unfair to British farmers to have a revaluation which in real terms would give British farmers a far lower increase than those of other countries in Europe.

Mr. Eldon Griffiths (Bury St. Edmunds)

Will my right hon. Friend in his discussions take account of the small but growing wine industry in this country, which is improving in quality, especially in the Eastern counties? With regard to his answer about Soviet wine purchases, is he aware that the Soviet Union actually sells wine to the EEC—although I regret to say that some of it has been used as paint remover?

Mr. Walker

Unlike my hon. Friend, I am not a connoisseur of Soviet wines, nor, I must confess, of English wines either, but I hope they will improve, expand and have great success.

Mr. Gavin Strang (Edinburgh, East)

Will the Minister ensure that the proposal to convert wine into industrial alcohol, at huge cost to the British taxpayer and other taxpayers, is totally rejected? Is he aware that it threatens thousands of jobs in this country, particularly in central Scotland? May I make it clear to him that there must be a permament solution if we are to secure future important investment in this area?

Mr. Walker

I am grateful for the hon. Gentleman's support for the view and stand that we take on this issue.