HC Deb 17 November 1983 vol 48 cc973-4
Mr. Baldry

asked the Minister of Agriculture, Fisheries and Food what is Her Majesty's Government's policy towards the proposal made on 21 September 1983 by the European Commission to apply a tax on oils and fats.

Mr. MacGregor

We regard the proposal as contrary to the Community's domestic and international interests, and we are strongly opposed to it.

Mr. Baldry

I am glad to hear that. Does my hon. Friend agree that it would be outrageous for the European Commission to impose a tax on fats and oils to help fund the common agricultural policy at a time when the EC is supposed to be searching for economies in the CAP and reductions in surpluses generally? Does he further agree that the imposition of such a tax could only damage the consumer and the British food industry?

Mr. MacGregor

I agree with all that my hon. Friend says. It is estimated that the proposals will increase butter consumption in the Community as a whole by only 16,000 tonnes. That is a tiny amount compared with both butter consumption and butter surpluses. Therefore, it does not really deal with that problem. I agree that it has the effects that my hon. Friend mentioned on consumers and some sections of the food industry. Moverover, it will exacerbate our relations with third countries and cause them to retaliate. As my hon. Friend said, it is the wrong way to tackle the problem of increasing surpluses and expenditure.

Mr. Loyden

Is the Minister aware of the adverse effects that this will have on the food industry in Merseyside? Is what he said at the Dispatch Box today the line that will be taken by his right hon. Friends at Athens later this year?

Mr. MacGregor

I think that the effect on Merseyside will be small—it would be wrong to exaggerate it—and the proposal in its current form would have a small effect on the food industry. We do not want to impose on the industry anything that would have an adverse effect. The danger is that a tax, if it were introduced, could be increased in future years. I assure the hon. Gentleman that that is the line that we have taken in the discussions, and we are supported by other member states.

Sir Peter Mills

Does my hon. Friend agree that that would be a retrograde step and that the butter industry can stand on its own feet? Will he proclaim the virtues of butter against some margarines which are made from dubious animal fats?

Mr. MacGregor

I agree with my hon. Friend about the impact on the butter industry. As I said, I think that this is the wrong way to tackle the problems that we undoubtedly face with dairy surpluses.