Council of Agriculture Ministers

HC Deb 09 February 1983 vol 36 cc999-1006 3.32 pm

The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker)

With your permission, Mr. Speaker, I should like to make a statement about the meeting of Council of Agriculture Ministers in Brussels on 7 and 8 February. I represented the United Kingdom with my right hon. Friend the Minister of State.

The Council continued its discussion of the Commission's price proposals for 1983–84. No decisions were taken, and the Council of Ministers will resume negotiations on these matters at its meetings in March.

The Council agreed a further one month extension of the arrangements for New Zealand to export butter to Britain in accordance with agreement reached in the Council last October. The French and Irish Governments refused again to lift their reserve on the regulation implementing this agreement. I raised the question of the commitments which the French Government entered into last October in a trade agreement negotiated with the Soviet Union, which the Commission has found to be contrary to article 113 of the Treaty of Rome, and stressed to the Commission its duty to see that the illegal aspects of this agreement were stopped.

During the course of the Council, as the House knows, the European Court of Justice issued its judgment in the case related to United Kingdom imports of ultra-heat treated milk. As I informed my hon. Friend the Member for Devon, West (Sir P. Mills) yesterday, the judgment states that the United Kingdom would be entitled to lay down the objective conditions which it considers ought to be observed as regards the quality of milk before treatment and as regards the method of treating and packing UHT milk of whatever origin offered for sale in its territory.

The Government will study the judgment in detail and will as soon as possible take the steps necessary to comply with it. Our aim will be to provide for the import of UHT milk from other member states subject to its satisfying the same health and hygiene requirements on which, in the interests of public health, we insist for the production and processing of our own milk. The necessary legislation will be set in hand urgently as soon as the details of the judgment have been studied and consultations held with the Commission and with other member states.

Meanwhile, in order to deal with the immediate situation created by the judgment and to retain full safeguards for public health, the Government are taking temporary precautions against the import of unsafe milk by amending the open general import licence so as to prohibit imports while the necessary studies and consultations take place.

Mr. Norman Buchan (Renfrewshire, West)

How much progress has the Minister made with the French about New Zealand? Did he make it clear that this country stands by the negotiated agreement for the import of New Zealand butter without any trade-off or ties of any kind? Has he made it clear that that is the view of the whole House?

Secondly, the Minister said very little about prices. Did he adhere to the pledge in his party's last election manifesto that the Conservatives would call for a freeze on the price of products that were in surplus production? In particular, has he called for a freeze on, if not a reduction in, cereal prices?

We support the Minister's action on milk. We cannot tolerate a lowering of the health standards that apply in this country. We need a long-term solution. We cannot allow interference wih our dairy industry by the Common Market. There could be serious consequences for the producers, for jobs in the industry and for our old friend the door-to-door delivery. I hope that there will be a guarantee of a long-term solution, if not an outright ban. A drop in the consumption of liquid milk, which might well be the result of such imports, would merely force us to contribute even more to the butter mountain.

I have seen representatives of the Consumers Association, as, no doubt, has the Minister. As he knows, the association is anxious about prices, among other things. Is not the most effective way to deal with the price aspect, which affects the entire livestock industry, to ensure that the immense stocks of cereal in this country are released to the livestock industry at the price at which we are willing to subsidise their export? That would help dairy industry prices marginally and pig producers enormously. I hope that the Minister will give an assurance today that he intends so to release those stocks.

Mr. Walker

I believe that not only all Members of the House but the majority of EC countries and the Commission accept that an agreement was reached with New Zealand that was in the interests of both New Zealand and Europe and that it must continue. I think that it is now clear to the French and the Irish that their stand is most unpopular throughout the Community and that no changes can be made to buy their agreement.

On price fixing, any study of cereal and milk surpluses will show that there have been substantial price reductions in real terms and that the period of office of this Government compares favourably with that of previous Governments in this respect.

With regard to UHT milk, I entirely agree that this country is almost unique in having the benefit of regular doorstep deliveries which not only provide high quality milk to the households of this country but perform an important social service for the elderly and others. I certainly do not believe that any UHT milk that complied with our health regulations would have any chance of competing with that. Anyone who has tasted the stuff would find it difficult to drink it instead of the normal product delivered to the doorstep unless there was an enormous price differential. I certainly boast that my dog eats Lymeswold cheese, but it certainly would not drink UHT milk.

Clearly we shall permit only the sale of milk that meets all the appropriate safeguards. Port inspections and so on will be required, and we shall have to consider methods of doing that.

The hon. Gentleman referred to cereal prices. If he wishes to reduce cereal prices for livestock feeding throughout Europe, he must consider the substantial budgetary and financial costs involved, which would still have to be met, albeit in a different form, by consumers and taxpayers. There is no easy gimmicky way to cut cereal prices to livestock producers because the price reductions have to be paid for—unless one considers that the prices paid to cereal producers throughout Europe are far too high, and it would be difficult to argue that and to maintain a viable cereal industry in this country.

Mr. Buchan

I think that the Minister is unduly complacent about the possible competitive effect of cheap UHT milk, especially when used as a loss leader by supermarkets. He must take on board the anxiety expressed by dairy traders as well as by milk producers.

Secondly, the Minister seems to be saying that he is content to use taxpayers' money to release cheap cereals to livestock producers abroad but that he is not prepared to do the same for our pig industry. There is no budgetary difference except that we can save our own industry and get cheaper prices.

Mr. Walker

When the Labour Government were in office, neither on butter nor on cereals did they pursue that policy. Their Chancellor of the Exchequer and the Treasury calculated the expense of using that method. It sounds appealing and has great public response, but, whichever party is in power, it is unlikely to pursue that course.

Mr. Robert Maclennan (Caithness and Sutherland)

Will the Minister not pursue a policy just because the previous Labour Government pursued it, and will he look again at incorporation proposals?

With regard to UHT milk, increasingly known as utterly horrible tasting milk, will the Minister give a more precise estimate of the impact on employment? His own officials suggested to the Select Committee on Agriculture that there would be a substantial effect on employment.

Mr. Walker

I agree with the hon. Gentleman about the taste of UHT milk. It has been available in this country for a considerable time. The hon. Member for Renfrewshire, West (Mr. Buchan) mentioned the possibility of its being used as a loss leader. It has been used as a loss leader. A lower price has been applied to UHT milk. It has never been a success, for good and sound reasons. There is no better value in Europe than the service quality and price of milk delivered to doorsteps in this country. It is of very good value and will continue to be of very good value.

The Commission looked on several occasions at the use of cereals, including the period when the leader of the Social Democratic party was the President of the Commission.

Several Hon. Members

rose—

Mr. Speaker

I am mindful that there are two abbreviated debates to follow in which a large number of hon. Members have constituency interests. I hope that the hon. Members who are called will ask one quick supplementary question so that we can more quickly reach the main debate.

Sir Marcus Kimball (Gainsborough)

Bearing in mind the current price negotiations, will my right hon. Friend confirm that our European partners are seized of the urgency of doing something immediately for the pig industry?

Mr. Walker

As my hon. Friend will know, the pig industry always has had considerable fluctuations because of the speed at which it can increase or reduce production.

One of the disadvantages of our pig and processing industry has been the failure to obtain its proper share of the bacon market. This year substantial improvements have taken place. The pig industry, in my view, has never taken the advantage that the Dutch or Danes have taken in both Europe and World markets. I hope that there will be substantial improvement in our marketing operation in this field in the coming year.

Mr. John Morris (Aberavon)

In the light of the Minister's statement that he intends urgently to prepare legislation to allow imports of treated milk, will he recall the complete lack of expedition by France to comply with the judgment of the European Court on the import of lamb from this country? Is it not more important to prepare legislation carefully rather than hurriedly? Will he bear in mind the fact that, although the housewife is buying 15 per cent. of her liquid milk from the supermarket—a figure never anticipated by the trade—if she buys more she will be tempted to buy this dreadful milk and may well upset the balance in the wrong way, thereby losing the advantage of doorstep delivery? Would not that be a tragedy?

Mr. Walker

To lose the advantage of doorstep-delivered milk would be a total tragedy. Any Government in power should do everything possible to ensure that the doorstep delivery service continues for a whole range of reasons which I know the hon. Gentleman supports.

As for supermarket sales in this country, there is a class of people who, because of their accommodation in flats and the times at which they are at home, take advantage of the availability of milk supplies in shops. That is reasonable. I have nothing against it, providing it reaches sensible levels.

Throughout the Government's negotiations with the dairy trade, including the Co-op, and the milk producers, we have done everything possible to retain the doorstep delivery service.

I assure the right hon. Gentleman that legislation will be very carefully prepared on the basis of ensuring that the hygiene controls and regulations that we apply are strenuously applied to any milk coming into this country. I assure the hon. Gentleman that the object of port inspections and everything else that is done will be to sustain that state of affairs.

Mr. Geraint Howells (Cardigan)

What effects, if any, will the judgment of the European Court have on the future role of the Milk Marketing Board in this country?

Mr. Walker

None. The Milk Marketing Board has been accepted by the Community as a proper, recognised marketing organisation that is of considerable importance not just to milk producers but to consumers throughout the country.

Mr. Colin Shepherd (Hereford)

Is my right hon. Friend aware that his resolute and prompt action in defence of the status quo will be welcomed by the milk roundsmen, by the public in receipt of doorstep deliveries, by the Milk Marketing Board and by the Dairy Trade Federation? Is it not true that there are alarming implications within the judgment for the quality of milk treated by the UHT process? Does not that underline the extraordinary good value of the milk that is put on doorsteps every day?

Mr. Walker

Yes. The Consumers Association, in its report, when dealing with the value of milk put on the doorstep every day, gave a number of selective prices—several of which were out of date—purporting to show how much cheaper milk was in Europe than in the United Kingdom. At present milk in Denmark and in the Netherlands, for example, is similar in price to that in the United Kingdom, but it tends to arrive in cartons and not in bottles, and not at the doorstep but at the shop. Milk in Denmark and the Netherlands has some of the cream content extracted from it, whereas the milk delivered in this country is whole milk with the appropriate amount of cream.

The price of milk delivered to the doorstep, in view of the service and quality, compares very favourably with that anywhere in Europe, with the exception of Ireland where there is a consumer subsidy on the delivery of milk.

Mr. Thomas Torney (Bradford, South)

I agree with much of what the Minister has said, particularly in defence of doorstep deliveries. I remind him of the employment situation in the doorstep delivery service. If we lose or weaken our doorstep delivery service, we shall add substantially to the almost 4 million unemployed people in this country. What will the Government and the Minister do ultimately to ensure that we keep our doorstep deliveries and keep this horrible milk out of our country?

Mr. Walker

I totally agree with the hon. Gentleman on the employment prospects. The important point about milk delivery is not only that large numbers of people are employed but that they are doing a good job in giving a service to consumers. It is very important to retain that position. In my judgment, maintaining doorstep deliveries and keeping milk production in this country at maximum efficiency are far more important than any threat from a rather bad tasting milk as an alternative. It is important that we ensure that our excellent delivery service, which is unique in western Europe, continues.

Mr. John Townend (Bridlington)

Will my right hon. Friend accept the thanks of the milk producers and milk roundsmen in east Yorkshire on the forthright way in which he got over to television viewers last night the fact that this imported milk is much lower in quality, is nasty in taste and does not compare in any way with our home-produced milk?

Mr. Walker

Some of the earlier reports yesterday morning did not take into consideration the fact that UHT milk is very different from the milk we are used to drinking in this country and there would be nothing like the present service. In this country—and this is something on which both sides of the House agree—this is a unique service of immense importance. It provides high quality milk at a very reasonable price.

Mr. D. N. Campbell-Savours (Workington)

Is French milk any more unhygienic than British untreated milk? Why not put aside this spurious and silly non-tariff barrier system of keeping out continental milk and instead tell the truth—that we are trying to protect United Kingdom farmers and to plan their trade in a very Socialist way?

Mr. Walker

The hon. Gentleman's statements are totally absurd, especially the use in his argument of untreated milk, which forms a minute proportion of the market. His statements will give great pleasure to the French—but perhaps that was his purpose.

Mr. Robert Hicks (Bodmin)

Does my right hon. Friend agree that the most fundamental problem facing British agriculture is the growing imbalance between livestock and cereals? What action does he propose to take to correct the imbalance?

Mr. Walker

At present the price fixing proposals endeavour to ensure that the imbalance between the rewards for livestock and cereals is corrected, but, in my view, it has not been corrected to a sufficient extent. There is a case for ensuring that the improvement in livestock prices is larger than any changes in cereal prices. That is the Government's attitude on the price fixing.

Mr. James Lamond (Oldham, East)

If British milk producers are delivering the right product at the right price at the right time—as the Prime Minister is always asking us to do—why does the Minister seem to find it necessary to emphasise so frequently that French milk is bad and that our delivery service is good? Cannot the customer decide for himself, or is this a case of double standards—protection for the farmers but no protection for the rest of our industry?

Mr. Walker

Actually, the double standards are on the other side. A number of anti-Europeans like the hon. Gentleman say in one breath that they want cheap food imports to lower prices to the housewife and say in the next breath that we should protect our milkmen and producers.

Mr. Albert McQuarrie (Aberdeenshire, East)

Will my right hon. Friend expand on what he said to my hon. Friend the Member for Gainsborough (Sir M. Kimball) about the pig industry and to the hon. Member for Renfrewshire, West (Mr. Buchan) about cereal prices? He will be aware of the serious situation now facing the pig industry. Will he undertake to look at this and try to alleviate the problem?

Mr. Walker

Anyone who looks at the post-war position of the pig or poultry industries will find that there have been substantial fluctuations in their fortunes, from very good rewards to very low rewards, because of the speed at which production can be increased. The Government have taken a number of measures that have been helpful to the pig industry. In my judgment, the main scope for improvement is in the marketing of both bacon and pork products. As my hon. Friend knows, we are doing a lot about that at present.

Mr. David Stoddart (Swindon)

The right hon. Gentleman will know of my interest in the importation of New Zealand butter. Is he aware that I very much support the stand that he has taken? Is he also aware that many people are worried about the waspish comments of Madame Cresson—who seems to have a long-term contract with "The World at One"—which indicate that she will veto next year's importation of New Zealand butter? Will he give a further assurance about that, because we need it?

Mr. Walker

I give a total assurance. Having done this joyful and happy job in Brussels for the past four years, I know that Madame Cresson is not the first French Minister who has made waspish remarks.

Mr. Anthony Nelson (Chichester)

Is my right hon. Friend aware that he will receive widespread support for the prohibition on the importation of unsafe milk? Many of us find it refreshing to have a Minister who not only advances British fisheries and milk interests but is proving extremely adept at playing our European partners at their own game.

Mr. Walker

I am grateful to my hon. Friend, but the Government have always complied with the basic law of the Community and will always do so. The Community has laid down that we should make changes in our method of importing this milk, and that we will do. In fairness, it has also laid down that we shall still have the power to apply standards of hygiene and health control that we consider adequate. We must now ensure that those standards are applied on an adequate and effective basis. If that is done, no milk producer in Europe will be able to compete with either our milk producers or our dairy industry, given that they will have to meet the same hygiene standards. We need have no fear from competition if other countries apply the same standards as we do.

Mr. Stanley Newens (Harlow)

Does the right hon. Gentleman recognise that, if permission is granted to import any UHT milk, it will undermine the viability of milk rounds somewhere in the country to the detriment of consumers, the dairy industry and farmers? In those circumstances, will he bear in mind that consumers in remoter areas will have less access to milk if it is put on as a loss leader in supermarkets? Will he, therefore, take a firm stand and not concede one iota of these new suggestions?

Mr. Walker

If, as I believe is true, we are better and more efficient at producing milk on the farm than any other country in Europe and that we have the best dairies in Europe, including the Co-op dairies, we have considerable opportunities in the European market, including France. Despite what Madame Cresson suggested, it might be of much more joy to French housewives if good, fresh, English milk were available to them. That might be a possibility.

Mr. Teddy Taylor (Southend, East)

If the Common Market succeeds in forcing this unsafe and unhygienic milk into Britain, would it not be a more permanent solution for our farmers if there were some means of dissuading European farmers from producing more milk, dairy products and other food for which there is no demand in Europe and for which we have to spend £7 million a day in subsidy to send to Third world countries?

Mr. Walker

That is an extraordinary remark. The European Court has stated categorically that we shall have the power to enforce whatever hygiene standards we consider appropriate. There is, therefore, no problem in terms of hygiene. More than most hon. Members, my hon. Friend tables question after question pointing out to the British housewife the joy of buying food at the cheapest price available in the world. On that basis, he should rejoice at cheap milk coming into the country.

Mr. Ron Leighton (Newham, North-East)

Does the right hon. Gentleman agree that a compulsory obligation to allow the entry of French UHT milk is in every way contrary to the British national interest? Does he accept that the highest court in this land should be this Parliament, not some alien institution that takes a decision which causes him to scurry here to promise the urgent introduction of legislation? Does not this issue point to the folly of ceding some of the powers of this Parliament in 1972? Should not we seek to repatriate those powers as soon as possible so that decisions on what is in the interest of British milk producers are taken in the House of Commons?

Mr. Walker

The hon. Gentleman knows that when in office the Labour party decided to renegotiate our terms of membership, and as part of those terms the Labour Government accepted the jurisdiction of the European Court.

Mr. Hal Miller (Bromsgrove and Redditch)

Having listened to the protestations of Labour Members, does my right hon. Friend recollect that it was under a Labour Government that the right hon. Member for Deptford (Mr. Silkin) allowed UHT cream into the country without apparent regard to health safeguards?

Mr. Walker

Fortunately, I have no responsibility for the activities of the right hon. Member for Deptford (Mr. Silkin).

Mr. Eric Deakins (Waltham Forest)

Perhaps we can come back to the price negotiations in Brussels with which the Minister dealt cursorily in his statement. What are the major areas of disagreement between the member states and the Commission? Is the Minister opposing the continuation of the milk co-responsibility levy? What positive proposals has he put forward in these discussions to reduce the cost of the CAP both to the British housewife and to the British taxpayer?

Mr. Walker

In answer to the hon. Gentleman's first point, there are many conflicting views and much disagreement at this stage. The hon. Gentleman talks about my statement being cursory, but, as everyone knows, at this stage of the year there is a process of general rounds of the table, and everyone gives a long list of what they would like ideally to have, but of course none obtains the full list. That is the basis. It has gone on year after year, including those years when the Labour party was in power. It is perfectly reasonable. During the time that I have been responsible for the price negotiations, in real terns the increases in farm gate prices and in food prices to the British housewife have been much lower than during the time of my predecessors. I hope that that splendid trend will continue.