HC Deb 02 April 1984 vol 57 cc661-72 4.18 pm
The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling)

With permission, Mr. Speaker, I wish to make a statement on the meeting of the Council of Agriculture Ministers in Brussels on 30 and 31 March. My hon. Friend the Minister of State and I represented the United Kingdom.

The Council was able to agree on all outstanding issues on prices and other aspects of the common agricultural policy, including the provisional agreements reached at earlier meetings on milk, on monetary compensatory amounts and on other products, details of which I have previously given to the House.

This settlement represents, for the first time, a positive step in controlling the growth of unwanted food surpluses and the consequent huge increases in the cost of the CAP. We can, for instance, expect milk production, which is the greatest problem area, to drop in the current year by about 6 million tonnes below what would otherwise have been the case. The Commission estimates that this alone will save the Community over £1,000 million in a full year. Even so the House must understand that even at the revised level of production, about 10 million tonnes of milk will be produced over and above what the Community itself consumes.

Moreover, the trend makes it doubtful whether, in 1984 at any rate, agricultural expenditure can be easily met within the budgetary provisions. Of course, it is still early in the year and the situation could yet change, but I made it clear to the Council that, in the United Kingdom's view, the Community will need to take the necessary steps to limit expenditure if budgetary problems arise.

Of course, the settlement will cause problems to farmers throughout the Community, but since last July, when the post-Stuttgart proposals were first published, farmers have urged that the uncertainty thereby created be ended as soon as possible. That has now been done.

The supplementary levy for milk, which has been widely discussed since last July, will take effect immediately. The agreement provides for this to continue for five years with a review at the end of the third year. I told the House on 22 March that I was determined to ensure that Ireland was brought within the supplementary levy system and that appropriate arrangements were made for Northern Ireland. I have achieved both of those objectives. Ireland has no guarantee of future expansion beyond this year and I have obtained for Northern Ireland an additional quota of 65,000 tonnes.

On the detailed arrangements for implementing the supplementary levy, I secured important changes which will enable redistribution of quotas to take place without restrictions relating to size of herd.

We are discussing the details with the farmers' unions and the milk marketing boards and information on the supplementary levy will be given to individual farmers as soon as possible. Meanwhile, I urge producers to consider carefully, and to take advice from local advisory officers, before deciding how to adapt their milk enterprises to take account of the impact of the supplementary levy system.

The House will remember that the Commission's original proposal implied a revaluation of the green pound, which was estimated to reduce farm incomes in the United Kingdom by 10 per cent. The NFUs put the deletion of this proposal as their prime negotiating objective. I am glad to confirm that I have not accepted this proposal, nor, unlike Germany, are we committed to any future revaluation. That adds up to a complete success in this sector.

Another outstanding issue for us was the beef variable premium scheme. Despite very strong opposition from the Commission and all other member states, I insisted on retaining this scheme for the United Kingdom. There is a small reduction in the maximum rate from 10.7p per kg liveweight to about 8.7p, which is higher than it was up until 1982. In order to remove possible distortion of competition in export markets, arrangements will be introduced to claw back the premium on exports which have benefited from it. This outcome means that consumers and producers will continue to benefit from the variable premium scheme. We shall, of course, ensure that the back-up support available through intervention to beef producers in Great Britain and Northern Ireland is maintained.

The specialist beef sector has faced particular difficulties for a number of years, and this has had a damaging effect on the balance between beef and sheep in some areas of the country. I am, therefore, delighted to inform the House that I have decided to double the suckler cow subsidy from £12.37 to the maximum permitted level of £24.74. I know that this will be very welcome indeed to the farming industry.

With regard to the sheep sector, I resisted pressure to defer the final transitional step, which is worth 3.9 per cent. on the support level. This will broadly compensate for the effect of changes in the calculation of the ewe premium. Sheep has been a relatively profitable sector for the past few years, but I recognise that the hill producers have particular difficulties. I have concluded that it is time, after four years with no increase, to raise the guaranteed price of wool by 5p per kilo.

There were a number of other detailed changes to what is a very complicated compromise package. I shall in the normal way arrange for full details to be put in the Library of the House. Overall, the common support prices have been reduced by about 1.5 per cent.; this means, taking into account green rate changes, a reduction in real terms over the Community as a whole of between 2 and 3 per cent.

The settlement is a favourable one for United Kingdom consumers. The price cuts agreed, together with recently introduced economy measures, could well for the first time have a small reducing effect on retail food prices on average.

At the end of the meeting the Council considered again the proposal for New Zealand butter. Despite strong pressure from the Presidency and all other member states, Ireland alone refused to accept the Commission's proposal for a five-year deal. Since unanimous agreement was needed, the Council concluded that there should be a further two-month roll-over. This matter will, therefore, require further discussion at a forthcoming Council.

In conclusion, the House will realise that this has been a very difficult price fixing, against the background of the growing budgetary crisis facing the Community. Inevitably, it creates difficulties for farmers throughout the Community, but I believe that the House will regard the outcome as a fair and realistic one.

Mr. Robert Hughes (Aberdeen, North)

Apart from the Minister's most sycophantic Back Benchers, there will be few who will agree with his conclusions that the settlement is just and fair. Contrary to his statement, there has been no fundamental reform.

Is it not true that, far from there being a fundamental reform, there has been nothing more than an exercise in book-keeping, and not a very successful one at that, because it institutionalises the dairy surpluses? Is it not the case that the problem with the CAP is that it has always sought to deal with the differences between poorer and richer farmers by making more money available? Will not the changes that the Minister has made fall more heavily on the smaller than the larger farmers and so cause great difficulties? Is it not true that the issue is not about whether we reduce surpluses, but about the method by which we do so, and that to reduce them by budgetary means simply perpetuates a fundamentally inequitable system? It is not surprising that we have heard such an outcry from farmers over the weekend.

Is it not the case that nothing in the agreement does anything to square the imbalance between cereals and livestock? The so-called horn and corn balance has in no way been changed. The Minister still has a lot more explaining to do. He says that the expenditure trend makes it doubtful whether, in 1984, agricultural expenditure can be met within the budgetary provisions. There are many different estimates of what the package will cost, varying from £500 million to £1,000 million. Who is going to pay that money?

Will the Minister give an undertaking that nothing will be done that means that either the social or regional fund has to be robbed to pay for the agriculture increases? How can the cost be limited at a future date if budgetary problems arise? Exactly what does the Minister mean by detailed arrangements being arrived at to secure changes in the redistribution of the quota without restrictions relating to size of herd"? That seems remarkably obscure.

When will advice be available from the agricultural advisers, and what advice will be given as regards how to adapt the milk enterprises? Given the substantial changes given away on the variable beef premium, what did the right hon. Gentleman mean last Thursday when he said that he did not want to reveal his negotiating hand? Did he not simply mean that he had agreed to give way? Why did he not use his veto? It is clear that the reductions are substantial and there is no doubt in my mind that they are the thin end of the wedge, and that next year there will be even further reductions until the whole thing is eliminated.

Only one part of the statement is somewhat welcome. On Thursday my hon. Friend the Member for City of Durham (Mr. Hughes) pressed strongly for an increase in the suckler cow subsidy. Although the Minister poured cold water on that idea, we at least have some cause to welcome the statement.

Perhaps the Minister will clarify the part of his statement that refers to the common support prices. I think that I heard him say that the common support prices had been reduced by about 1.5 per cent. In the very helpful note given to me before the statement was made, there is a reference to 0.5 per cent. Will the right hon. Gentleman let me know whether it is 1.5 per cent. or 0.5 per cent.?

The Minister says that the settlement was favourable to United Kingdom consumers. How can that be the case when the estimates for the reduction in the beef premium will lead to beef prices increasing by anything from 15 pence to 25 pence per pound? Given the size of the surpluses, why are we not getting substantial reductions in prices, especially as there is great disparity between EEC and world prices?

All who study the Minister's statement and the package will conclude that the settlement is bad for farmers, bad for consumers, and bad for the taxpayers. The Minister has asked the wrong questions, and was bound to be given the wrong answers. May we have a categorical assurance that once all the details have been examined—I see that the Leader of the House is present—we shall have a full debate in prime time on this issue and all the associated regulations?

Mr. Jopling

The hon. Gentleman has asked an enormous number of questions. As he knows, the question of a debate is a matter for my right hon. Friend the Leader of the House.

The hon. Gentleman criticises the package for all sorts of reasons He says that it is bad for consumers, but there is, perhaps for the first time in a Community price package, the prospect of food prices falling. I do not understand how that can be bad for consumers.

The hon. Gentleman says that the package is bad for taxpayers. For the first time, we have taken steps to reduce the ever-increasing cost of the common agricultural policy. I would have expected the hon. Gentleman to welcome that. At the beginning of his remarks, the hon. Gentleman referred to the difference between poorer and richer farmers and said that more should have been done for poorer farmers. I remind him that this country has the smallest proportion of poorer farmers of any Community country. The logical outcome of what the hon. Gentleman said is that the settlement should have been slanted more towards other countries in the Community.

On the question of the balance between cereals and livestock, there is the prospect of a reduction in feed grain prices of 1 per cent. and in the price of breadmaking wheat, which has an influence on feed prices, of 4.6 per cent.

When the hon. Gentleman asked me about future costs, I made it clear that there is a difficulty, and that if budgetary problems arise later in the year we shall have to consider taking the necessary steps at that time to reduce expenditure. That must be faced. The hon. Gentleman should know by now that one can never tell at the beginning of an agricultural year what the seasons will be like, and, therefore, what the yields will be or how animals will grow. There are far too many variables for one to be precise.

It was only with the greatest difficulty that we managed to keep the beef premium arrangement. It will continue at a higher level than when the Labour Government left office. I was very glad that at the last minute I was able to insist that this arrangement should remain part of the agricultural scene.

Several Hon. Members


Mr. Speaker

Order. I recognise the great importance of these matters to Back Benchers. In view of that, I propose to let questions continue until 3 minutes past 5 o'clock. However, I must have regard to the subsequent and equally important business on the Order Paper.

Mr. J. Enoch Powell (Down, South)

As regards milk, will the Minister confirm that the quotas are quotas allocated to the respective member states, and that the additional 65,000 tonnes is an addition to the United Kingdom quota?

Mr. Jopling

I can confirm that the 65,000 tonnes is for Northern Ireland.

Mr. Charles Morrison (Devizes)

Is my right hon. Friend aware that farmers will be grateful that the talks have been brought to a conclusion and that the uncertainty has been removed, even though they may not like where they stand? It would appear from reports in the press that the farmers of some other Community countries will benefit more—or suffer less—than those of the United Kingdom. Will my right hon. Friend explain why?

Mr. Jopling

My hon. Friend is correct in saying that farmers throughout the Community will not like the provisions of the deal. We must accept that. Nobody likes reductions in prices, or the need to reduce production when there is massive over-production.

With regard to the balance between member states, one must take into account the effect of the price changes in real terms as amended by the changes in the MCA system agreed in the package, but excluding the green rate devaluations, which could have taken place in any event. The effect on national prices will be as follows minus 3.5 per cent. in Germany, minus 4.3 per cent. in France, minus 6.7 per cent. in Italy, minus 2.8 per cent. in the Netherlands, minus 3.4 per cent. in Belgium, minus 4.3 per cent. in Luxembourg, minus 5.2 per cent. in the United Kingdom, minus 5.1 per cent. in Ireland, minus 3.5 per cent. in Denmark and minus 12.8 per cent. in Greece.

Mr. Eric Deakins (Walthamstow)

As agriculture expenditure is not to be reduced below its current level, how does the settlement satisfy the Prime Minister's stipulation that agriculture expenditure should be reduced as a precondition to agreeing an increase in own resources?

Mr. Jopling

There is an understanding in the package that there will have to be a review if in the end the cost of the common agricultural policy continues to rise. If we exceed our budget for the CAP later in the year, the whole thing will have to be reconsidered.

Sir Peter Mills (Torridge and Devon, West)

I appreciate that my right hon. Friend has a difficult task when there are surplus and cuts have to be made. I congratulate him on his success on beef and sheep, and the new proposals for the hill cow subsidy. However, there are two areas of grave concern in British agriculture. First, there is concern that the Irish should not get away with it a second time. In other words, they should not get an increase in allocation next year. Secondly, the effect on the very small dairy producer in the wet areas will sometimes be disastrous. Will my right hon. Friend look very carefully at the marginal land scheme to see whether any assistance can be given to very small farmers who cannot turn to anything else?

Mr. Jopling

My hon. Friend is right to draw attention to the difficulties of the small dairy producer. A few months ago, I was able to get the Council to agree to extend the less-favoured areas into those marginal areas. That assistance will help 28,000 farmers in the United Kingdom and will be of particular help to the small dairy producer.

I can assure my hon. Friend that there is no guarantee in the deal that Ireland will have an increased quota next year.

Mr. Donald Stewart (Western Isles)

The juggling that the Minister has just announced simply underlines the basic lunacy of the CAP. Is the Minister aware that many British farmers would have preferred a defeat such as he has inflicted on the Irish to the total success that he claims on their behalf?

However, will the Minister accept that many hill farmers in Scotland who have been having a hard time will welcome at least what he has done for the price of wool?

Mr. Jopling

Many Scottish hill farmers will warmly welcome the doubling of the suckler cow subsidy. The right hon. Gentleman referred to the lunacy of the CAP, but I hope that he will acknowledge that we have taken a significant and important first step to make the running of the CAP much more rational.

Mr. Colin Shepherd (Hereford)

Is my right hon. Friend aware that, despite the curmudgeonly attitude of the hon. Member for Aberdeen, North (Mr. Hughes) and other Opposition Members, mature reflection by the farming industry will probably lead to a realisation that my right hon. Friend has made the best of a bad job? Is he further aware that the move, through the suckler beef premium, to redress the balance in the beef industry will be warmly welcomed in the country's livestock areas? With regard to livestock, is he satisfied that enough has been done about cereals? Can he say anything about the excessive premium which hard wheat enjoyed at the expense of feed wheat and whether he has been able to correct that imbalance?

Mr. Jopling

I had my hon. Friend's area in mind when I spoke about the importance of doubling the suckler cow subsidy. I have been pressing for reductions in the price of cereals because, as I have made clear in the House for a long time, there is a serious imbalance between grain and livestock. We have taken a small step to correct that imbalance, but we must continue to work hard on it.

Mr. Dennis Skinner (Bolsover)

Is the Minister aware that a farmer was heard to remark during the weekend, after hearing about this disastrous deal, that, far from batting for Britain, this Minister could not get into the Foreign Secretary's second XI? What will he do when farmers demonstrate? Some of them might get their tractors and block the roads. If one of them calls the Minister a scab, will the right hon. Gentleman have him arrested? Is he aware that one of the things that ought to happen now is a ballot about whether we stop in this lousy Common Market?

Mr. Jopling

I shall take lessons about ballots from the hon. Gentleman when they occur in other sections of the economy.

Mr. Peter Hordern (Horsham)

Does my right hon. Friend agree that the result of the settlement will be larger and more expensive surpluses, the impoverishment of the dairy farmer and the continued enrichment of the cereal farmer? Why should the cereal farmer get fatter and the dairy farmer poorer?

Mr. Jopling

All the signs are that there will be an extremely large grain crop in the northern hemisphere this year. If that happens and we get normal harvest conditions—we should also bear in mind the much increased level of grain production in north America—it is possible that the market price of grain will do quite a lot to help the livestock industry.

Mr. David Penhaligon (Truro)

Does the Minister agree that the package's final test must be how it affects the individual farmer? Can he begin to answer questions about the implementation of the new milk quota scheme? Who is in charge of it? How will the quotas be calculated? What appeal mechanism will there be? Will there be an independent element to it? What debates will there be on the Floor of the House to give hon. Members the opportunity before those schemes are implemented to suggest that there might be a skew towards small farmers and milk producing areas?

Mr. Jopling

It is always virtually impossible to judge farm incomes because it is never possible to know what the effect of the seasons will be. With regard to the operation of the super-levy, the hon. Gentleman must contain himself because it was not until Saturday morning that the outlines of the directives were finally agreed. We are pursuing urgent talks with the NFU and the milk boards to work out the details. We shall announce the conclusions as soon as possible.

Mr. Robin Maxwell-Hyslop (Tiverton)

Is my right hon. Friend aware that a settlement that allows Southern Ireland, which greatly contributed to creating the problem, an increase as compared with other members of the EEC is disgraceful and not a basis on which many right hon. and hon. Members would regard it possible to grant any more resources to the EEC?

Mr. Jopling

I opposed the proposals for Southern Ireland throughout the discussions, but was forced in the end to accept the package because there would otherwise have been no way in which to have got all the other things that are of benefit to us, especially the continuation of the beef variable premium.

Mr. Tony Blair (Sedgefield)

Can the right hon. Gentleman be specific about the assistance that he intends to give dairy farmers in areas such as mine, many of whom are not particularly wealthy, operate on tight margins and have been encouraged to expand production but are now being told that they must cut back?

Mr. Jopling

The hon. Gentleman might tell small dairy farmers that the changes have been foreshadowed for many months—some would say for several years. The hon. Gentleman will recall that the guarantee threshold was first put on milk in 1981 when we reached production of 97.2 million tonnes, or slightly less, which is the basis on which the Community's standard quantity has been pitched. As my hon. Friend the Member for Honiton (Sir P. Emery) said recently, small dairy farmers are more flexible with regard to coping with surplus milk production, as they can feed it to other livestock. All dairy farmers will have the option of continuing on a lower level of concentrate feeding which, in most cases, ought to allow for reductions in milk yield by reducing the cost of feeding.

Mr. Ralph Howell (Norfolk, North)

Perhaps I might tell my right hon. Friend how disappointed I am at this feeble settlement for the dairy industry. Why could a uniform system not have been agreed throughout the EEC? Why does it make any sense for any EEC country to increase milk production?

Mr. Jopling

The reason that my colleagues in the Agriculture Council latched on to to justify the increase for Ireland was that milk is a major part of its economy. Milk production is almost twice as important to Ireland as it is for any other Community country.

Mr. Gavin Strang (Edinburgh, East)

How many thousands of jobs in the British dairy industry will be destroyed by this settlement? Why did the Government agree to it before they had achieved a satisfactory solution to Britain's net contribution to the budget?

Mr. Jopling

It is impossible at this stage to make any calculation about the detailed effect of the cut. I remind the hon. Gentleman of what his hon. Friend the Member for Aberdeen, North (Mr. Hughes) said on 22 March: we are opposed to the growing level of surpluses, to increasing the cost of the CAP budget and to the proportion of the total Community budget which the CAP absorbs." — [Official Report. 22 March 1984; Vol. 56, c. 1278.] We have been doing exactly that. That is the result of the package. It is no good Opposition Members pretending that any effects which might result from this package would not have resulted from a package which they say they would have supported because they have exactly the same ends in mind.

Mr. Jerry Wiggin (Weston-super-Mare)

Will my right hon. Friend be a little more forthcoming than he was to the hon. Member for Truro (Mr. Penhaligon)? Surely his Department, the Milk Marketing Board, or the National Farmers Union, has done preparatory work in relation to on-farm quotas? Does he appreciate that the sooner those details are known to the farmers concerned, the sooner much of this criticism will be abated?

Mr. Jopling

I accept that, but I hope that my hon. Friend will understand that we have been having talks on these matters for many weeks. Until we have the final details of the directive to which the Community agreed—it was not agreed until about 10 o'clock on Saturday morning — we shall need to have further discussions with the farmers' unions and the milk boards. However, I agree that it is important to make announcements as soon as possible. As I said in my statement, we shall do exactly that.

Mr. Bryan Gould (Dagenham)

As we have been assuming that when the agreement is fully implemented it is still likely that total agriculture spending will rise by up to 6 per cent, will the Minister confirm that the agreement as it is falls far short of the fundamental reform that the Prime Minister laid down as a precondition for any increase in own resources?

Mr. Jopling

I do not believe that it falls far below the measures needed for fundamental reform. It is a vital first step towards controlling the burgeoning spending and production of foodstuffs under the common agricultural policy.

Mr. Tony Baldry (Banbury)

When Britain has in intervention 142 days' supply of butter and 648 days' supply of milk products, does not my right hon. Friend agree that many farmers, in their hearts, will accept the editorial in last week's edition of Farmers Weekly? It stated that the introduction of milk quotas was the inevitable consequence of producing too much that the consumer could not or would not buy. That is not pleasant, but it is realistic. Does my right hon. Friend further agree that given some of the hysterical statements in the press today by certain people in the farming community, it would be better if the farming community took on board that now is the time not for panic, but for planning?

Mr. Jopling

I agree very much with my hon. Friend. He is right to suggest that the vast majority of farmers in this country and, I believe, throughout the Community, understand that they have no God-given right to go on producing food that can be neither eaten at home nor sold abroad.

Mr. Brynmor John (Pontypridd)

In answer to my hon. Friend the Member for Sedgefield (Mr. Blair), the Secretary of State said that people have seen this crisis coming for many years. Will he therefore explain why his Department has been encouraging farmers to increase their herd sizes under the farm and horticultural development scheme so that either they are midway through repaying grants or they are topping them off with bank overdrafts, when there is no guarantee of any income to pay back the grants that the Minister encouraged them to take up?

Mr. Jopling

Many people saw that this crisis was coming for years, but I say to the hon. Gentleman that my two predecessors—my right hon. Friend the Member for Worcester (Mr. Walker), now the Secretary of State for Energy, and the right hon. Member for Lewisham, Deptford (Mr. Silkin) have argued consistently for many years that if the Community continued paying itself excessive price increases for agricultural produce, this crisis would come. When those warnings from British Ministers have been ignored over the years, and when price increases have been granted that were higher than was rational, I think that it would have been idiotic to take the hon. Gentleman's advice and to say to farmers, "Do not take any advantage from the price opportunities that the Community is offering you." That seems to be the greatest folly, which I would expect to hear only from the Opposition.

Mr. Andy Stewart (Sherwood)

Having considered these proposals since they were announced at the weekend, I would still rather farm in this country than in any other. Will my right hon. Friend reconsider his advice to dairy farmers to ask Ministry advisers to tell them how to cut production, when over the past few years they were the very people who advised farmers how to increase production?

Mr. Jopling

I agree with my hon. Friend that this is the best country to farm in. It has the best prospects for farmers in the whole of the Community. The advisory service can give advice only on the basis of the price structure and the incentives that exist at the time. If there are price structures that make it attractive for farmers to invest and expand, there is no reason why the advisory service should not encourage the farmers and show them how to do that. However, at a time like this, when the political decisions have been taken—rightly, but too late, it may be argued—it is the job of the advisers to explain to the farmers how they can match production to changing circumstances.

Mr. Robert C. Brown (Newcastle upon Tyne, North)

In a throwaway line, the Secretary of State said that there were likely to be small reductions in food prices. How much will they be—a penny in the pound, a ha'penny in the pound or less? Where is the £500 million, which is the overall cost of the package, to come from? Will it be the industry fund, the social fund, or worse, the regional fund? At least those are funds that we get something from.

Mr. Jopling

It is impossible to make an exact assessment of what will be the effect of the package on food prices. In general, we believe that it will be about neutral, but there are more likely to be price reductions than price increases.

Mr. Neil Hamilton (Tatton)

Is my hon. Friend aware of the reply given by the Minister of State last Friday to my hon. Friend the Member for Penrith and The Border (Mr. Maclean), which showed that, whereas the Income of a cereal farmer is expected next year to be two thirds higher than it was six years ago, the income of the dairy farmer is expected to be one third lower? Will my right hon. Friend explain why he has brought back from Brussels proposals that will mean the bankruptcy of a great number of dairy farmers? Will he explain the inadequacy of the transitional arrangements? Does he accept that the British dairy farmer will not think anything of the extra production quotas, because they are paid for by the British dairy farmer through the co-responsibility levy, which falls disproportionately heavily upon him?

Mr. Jopling

There will be a reduction in cereal prices. I should like to say to the hon. Member for Aberdeen, North (Mr. Hughes) that I am not sure whether I quoted a wrong figure for the reduction in bread-making wheat. I meant to say 3.4 per cent. instead of 4.6 per cent., which I think I said. I hope that he will forgive me for that slip of the tongue.

It is wrong to start talking about dairy farmers going bankrupt. We are not certain that that will happen. I believe that the vast majority will be able to adapt to the situation. To allow a one-year transition period before the full rigour of the super-levy is right. I think that most farmers take the view that the sooner we have the full rigour of the super-levy, the better.

Mr. Ron Lewis (Carlisle)

Does the right hon. Gentleman recall some of the speeches that he made in Cumbria during the latter part of May and the early part of June in 1983, when he gave assurances to the agricultural community, especially the NFU, that everything would be all right? How will he salvage his conscience now?

Mr. Jopling

I have a perfect conscience with regard to my relations with the NFU in Cumbria. When I last met the chairman of the Cumbria NFU and other members of the union from my constituency, we had a long and friendly discussion, and we ended with an agreed statement that there were no serious differences and difficulties between us.

Mr. Albert McQuarrie (Banff and Buchan)

I should like to congratulate my right hon. Friend on obtaining the additional money for the suckler cow premium and the hill subsidies. Can he confirm that the meat variable premium will last for only a year? Why was the milk quota set on the 1981 figures rather than the 1983 figures? Was that by agreement with the NFU, or was it forced upon my right hon. Friend at the meeting? What will be the situation in the pig industry?

Mr. Jopling

I am most grateful to my hon. Friend for his support for the doubling of the suckler cow subsidy.

For 10 years now, the premium scheme has been extended for one year only and there is no change in that respect.

With regard to national quotas being based on 1981 or 1983, as I explained to the House a few days ago, it makes very little difference to the United Kingdom whichever one is used. The result comes out to within 1 per cent. on either basis, and therefore it is not of much importance to us.

With regard to the pig industry, we have a new scheme —which I have not mentioned in the details given to the House—whereby skimmed milk, enriched in cream, can be fed to pigs. I believe that that new scheme will be very helpful to the pig industry.

Mr. Thomas Torney (Bradford, South)

With regard to the cuts in milk production, will the Minister tell us why the French have a 2 per cent. cut whereas the United Kingdom has a 6 per cent. to 7 per cent. cut? Many of the other Common Market countries have had cuts far lower than ours.

Will the Minister bear in mind that we have no surplus in milk and dairy produce whereas most of the other Common Market countries, particularly France, have a surplus? Has the Minister thought of the knock-on effect on unemployment in other industries such as the dairy equipment industry in the United Kingdom?

Finally, will the Minister say whether doorstep delivery of milk is threatened?

Mr. Jopling

With regard to the balance between the United Kingdom and other countries, I ask the hon. Gentleman to read in the Official Report the answer that I gave to my hon. Friend the Member for Devizes (Mr. Morrison) about the price package. The hon. Gentleman will see that there is not the discrepancy between the United Kingdom and other countries that he is suggesting.

As for milk, as I said a few seconds ago to my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie), whether we chose 1981 or 1983 as the basis made virtually no difference to our share of the Community quota. It made a big difference to France. France, by choosing 1981, was able to get an advantage. Therefore, we were able to get the French, in return, to give up all their demands about the levy on small producers, which would have hurt us, and to give up the intensive levy, which again would have hurt us. We were able to have embraced in the super-levy all the non-dairy sales—again something which France did not want. The French got the advantage of a lower reduction, which made no difference to us, but at the same time we were able to quash all the exceptions that would have been so damaging to us.

Mrs. Elaine Kellet-Bowman (Lancaster)

Will my right hon. Friend accept that the sheep producers in my area will be very grateful for the deal that he struck on their behalf? But will he equally accept that the milk producers see the deal on milk with respect to Ireland through very different eyes?

The right hon. Gentleman said that people have no God-given right to produce food that cannot be consumed. Why should there be an exception with regard to Ireland?

Mr. Jopling

I am grateful to my hon. Friend for her kind words concerning the sheep deal.

I took exactly the same view as my hon. Friend concerning Ireland. I opposed that part of the deal all the way through. In the end, we were invited to vote for the package as a whole. It was because we had achieved several advantages for ourselves—such as the prize of the retention of the variable beef premium — and because we were not able to vote on items individually, that I thought it right to accept the package as a whole.

Mr. Robert Hughes

Will the Minister clarify the cost of the package? It has been reported to have cost £500 million more, at a minimum. Even given the imponderables, surely some estimate must have been given of the cost, because it would be stupid to sign any agreement with no cost attached to it.

Will the Minister tell us exactly what he meant when he said that if spending is increased beyond the budget limit we shall have to look at the whole thing again? Does that mean that the whole package will be reopened?

Mr. Jopling

With regard to the cost of the package, the same position arises every year. One can never tell what it will be, because one does not know what will be the amount of money needed to implement the intervention prices. The hon. Gentleman should know that that can never be quantified.

With regard to dealing with budgetary problems, I had written into the minutes of the Council statement this: In the United Kingdom's view, expenditure on the common agricultural policy in 1984 must be accommodated within the existing budgetary provisions. If budgetary problems arise later in the year or in 1985, the United Kingdom considers that the Commission and/or the Council (acting on a proposal from the Commission) should take necessary steps to reduce expenditure to the permitted level. We have to keep a very close eye on the total cost of the package.

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Speaker. It has been a very trying and difficult afternoon, with a lot happening. In excess of 60 Back-Bench members of the Conservative party are members of the Conservative European reform group, and they have a very distinct view on the common agricultural policy. It seems a shame that none of those hon. Members — I do not speak on my own behalf — had the opportunity to put questions to the Minister of Agriculture. I do not make the request on my own behalf, Mr. Speaker, but would it be possible for another member of the group to catch your eye and to have the opportunity to put a point to the Minister?

Mr. Speaker

Order. I had heard about that group but it seemed to me that quite a number of the hon. Members that I called, whether they nominally belong to the group or not, were very critical in their questions.