HC Deb 02 December 1985 vol 88 cc107-27
Mr. Speaker

I have selected the amendment in the names of the hon. Member for Greenock and Port Glasgow (Dr. Godman) and his hon. Friends.

I understand that no fewer than 14 right hon. and hon. Members wish to take part in this one and a half hour debate, so I hope that speeches will be brief.

10.14 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Gummer)

I shall seek immediately to obey your request, Mr. Speaker. I beg to move, That this House takes note of European Community Documents Nos. 8687/85, 9178/85 and 8781/85, relating to the sugar sector and 11172/84 and 8688/85, relating to the reform of the starch regime, and supports the Government's objectives to secure satisfactory agreements on them which take account of the interests of both producers and users of the products concerned. The core of the motion is the responsibility which Britain felt that it had, and which the House insisted we had, towards the African, Caribbean and Pacific countries, and the continuation of cane sugar refining in Britain. It is important, and hon. Members on both sides of the House should remark upon it, to underline the generous way in which the Community, at Britain's behest, has sought to accommodate, at a price well above the world price, sugar coming from countries for which this product and this particular crop is of such great importance.

Of course, it is always possible to insist that we could have done more and better, but there are occasions when it is worth while saying how well we have done, and it is right and proper that we should, for those countries need the markets which we can give them, and it is a market and a responsibility which we shall continue to support.

The proposition is that we should continue the system which was perhaps best expressed in 1981 in the letter which was written on behalf of the Community to say that we should try to get a parallelism—[Interruption.] I am sorry, but that is the only word that I know which covers the matter—between, on the one hand, the price paid for raw sugar in the ACP countries, and on the other for the raw sugar produced by beet producers in the Community.

The second parallelism is between the margins which are provided for the sugar manufacturers in Britain and the rest of the Community and the margins provided for the sugar cane refiners.

There are those who suggested that we should have agreed with those who wanted us to narrow the margins which are provided for the cane refiners in order to increase the money that was going direct to the producers of cane sugar. That would have been a great mistake. We opposed that, and we did so for two reasons. First, if we are to defend the generosity of the Community in allowing the sugar into Britain and elsewhere—

Sir William Clark (Croydon, South)

My right hon. Friend is talking about the generosity of the Community. One of the cardinal points at issue when we joined the Common Market was that there should be a guarantee for the ACP countries of some 1.2 million tonnes of sugar.

Mr. Gummer

It was 1.4 million tonnes, of which 1.3 million tonnes was taken up by those to whom it was offered.

I used the word "generosity" in the proper sense, which is that that in no way detracts from the assurance. It is generosity by the whole Community, including ourselves, to continue to pay a price to people outside the Community which is well above the price on the world market. I happen to think that that is generosity. It is an absolute commitment, and I would not in any sense derogate from that commitment. I hope that my hon. Friend will accept that. No other part of the world does that, and in that sense it is generosity.

Mr. Teddy Taylor (Southend, East)


Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. Will the Minister address the House and not turn his back on the Chair. Let me remind those hon. Members who are trying to intervene and catch my eye that a great number of hon. Members wish to speak.

Mr. Gummer

I repeat that I believe it to be generous. It is both a responsibility and a generous commitment, of which we should be proud, and which we should continue. It is important to defend that generosity. The only way to do so is to provide a reasonable basis. That basis is provided by the 1981 letter. It ensures that we should provide, for those who come from the ACP countries, a parallelism which is defensible and which ought to be defended. That is why we did not support the Commission's suggestion that we should narrow the margins that were provided for the cane refiners.

I hope, Mr. Deputy Speaker, that you will allow me to say that it is important that the margins provided for the cane refiners should be kept at a reasonable level, otherwise the ACP countries will be unable to export their sugar to the Community. There will be insufficient refining capacity. The defence of that refining capacity is an essential part of any sensible policy that allows ACP sugar into the Community. We are pledged to defend that policy.

Secondly, the documents deal with the problem of the reduced price quota sugar for the chemical industry. This is a matter of considerable concern, both to this country and to the Community as a whole. There is no earthly point in using this as a means to encourage the production of yet more sugar. We need to use it as a means to sell the sugar that we already produce. That is why we were so strongly opposed last year to the Commission's proposals. They would have had the effect of increasing the amount of C, or non-quota, sugar, and it was thought that they would provide the basis for selling cheaper sugar to the chemical industry.

Mr. Chris Smith (Islington, South and Finsbury)


Mr. Gummer

It would be much better if I allowed as many right hon. and hon. Members as possible to speak, rather than allow the hon. Gentleman to intervene. That is not the real reason. The real reason is that I am more frightened of Mr. Deputy Speaker than I am of the hon. Gentleman.

For the reason that I have given, we shall resist the Commission's original proposals. We are seeking to improve the position. We welcome in principle this proposal by the Commission. It will provide an opportunity to encourage new markets for the sugar that we produce both in this country and in the rest of the Community. It will not provide, as the previous proposals did, a means of expanding non-quota sugar.

There is a problem about starch. The industries which use starch are helped in two ways. Protection is given to Community-produced products which use starch. Support is also given to the starch manufacturers. The Commission's aim is to ensure that both means of support are not provided. There is no proper answer yet to this problem. We are not happy about the proposals that have been placed before us. We are determined to protect the British food industry from what would otherwise be far too sharp an attack on the pricing structure and on the cost of the industry's products.

It is unacceptable to help people twice—by protection and by direct support. It is also unacceptable to change the system and thereby upset the market position as to make it impossible for those who rely upon it to put their house in order. For that reason, we have sought to change the Commission's proposals. Both we and the other member states have already secured important improvements. They were incorporated in the Commission's revised proposals, which were published in the summer of this year.

We are discussing a number of matters that are of great importance. The kernel of the issue is the question of quotas for each country. Many people have made a strong case that the current position is unsatisfactory. Many hon. Members, on both sides of the House, have put that case, especially those who, like myself, represent constituencies that produce beet sugar.

The discussions in Brussels are aimed at finding a way to meet two points: first, the continuing over-production of sugar; and, secondly, the sense of dissatisfaction felt in this and other countries about the way in which the quotas have been parcelled. I cannot believe that, in advance of those discussions, the House would expect me to predict which way they will go. Whichever way, it is necessary that the United Kingdom provides a continuing secure market for ACP cane sugar—provided that the price remains competitive with Community beet sugar. That must be basic to any decisions.

I do not believe that those who seek an improved quota for British beet sugar would want it to be at the cost of the ACP support that we have given—[HON. MEMBERS: "Why not?"] Because we have a clear commitment, both moral and historical, to support that. I repeat that commitment tonight. However, at the same time it is right that the Government should put clearly the strong belief of the beet industry that the B quota, which was set up at the time of the arrangements in 1981, is not a fair reflection of our historic production. Indeed, it does not meet the problem that will arise if we expect an expansion in demand for sugar in the chemical industry—nor the circumstances that have already arisen, where the margin between what we produce and what we need as a nation is so narrow.

I hope that those who have been heartened by my clear promise on the ACP will also agree that it is reasonable for the Government to seek ways to improve the position for our beet producers, who feel that they have not been fairly treated—

Several Hon. Members


Mr. Gummer

It would be wrong of me to give way to my hon. Friends, having refused to give way to Opposition Members. I must adhere to what you requested, Mr. Deputy Speaker, and speak briefly now and then reply to the points raised in the debate. When the amendment is moved the House will no doubt wish to comment upon it. When I have listened to the case for the amendment, I can make my recommendations on what the House should do. It would be original and unusual if I were not prepared to listen to the speeches in favour of the amendment. [Interruption.] Indeed, if I said that I would not listen to them, the laughter of hon. Members would be even greater than it is now.

Sir John Wells (Maidstone)

On a point of order, Mr. Deputy Speaker. Is it not intolerable that my right hon. Friend should waffle on with this sort of badinage, when we all want to contribute—

Mr. Deputy Speaker

Order. The hon. Gentleman knows that that is not a point of order.

10.29 pm
Mr. Brynmor John (Pontypridd)

I want first to deal with the document on the starch regime, which removes its subsidies for starch in food use and transfers them to starch in industrial use, and at prevailing world prices.

Those who advocate the use in Industry of beet sugar will know that the chemical industry sees a future for the increased use of sugar, as it sees an increase in the use of starch, only at world prices. I welcome that development because it will help not only the existing industry but the new biotechnological industries, and there is evidence that the availablility of world prices in countries outside the EEC has helped to site the new industries in places such as Austria.

I accept the Minister's remarks about Britain having a special problem in the sense that we have a dependence greater than the rest of the EEC on starch in foodstuffs and that there are commodities such as soups and sauces which do not have the benefit of an import levy. I urge the Minister in any negotiations to bear in mind that some commodities do not have that double protection, so that the rationale for the removal of the subsidy from foodstuffs is not borne out.

The main problem that interests the House tonight surrounds the three documents that deal with the sugar regime, which is in surplus and, as intended, is not self-supporting. It is extremely disappointing to note that the EEC has again ducked its responsibilities by proposing that quotas should remain the same in total. As introduced, those quotas were, as I think the Minister recognised, inequitable and almost capricious in the sense, to give one example, that they gave Belgium and Luxembourg production quotas which were two and a half times their comsumption.

But, if it has been bad in its internal effect in the EEC, the regime's external effect has been devastating. The outcome of the quotas means that in 1984–85 the EEC produced 3 million tonnes above the amount consumed, and that is the reality of the quotas now recommended for continuance.

We dump sugar from the EEC on the world market. The most efficient world producer can produce at only 12 cents a pound, but the spot price in New York for most of this year has hovered between 3 and 4 cents a pound. For many primary producers of which we speak tonight, that spells poverty.

Mr. Alfred Morris (Manchester, Wythenshawe)

His Excellency the High Commissioner for Guyana, who is chairman of the ACP High Commissioners' Sugar Committee, has spoken of grave concern if there should be any increase in the United Kingdom sugar beet quota. There is no doubt that such an increase would conflict with the guarantees. We are talking about extremely poor countries. Does my hon. Friend agree that Her Majesty's Government should give a plain and definite commitment tonight to the ACP suppliers on this important subject?

Mr. John

Later in my remarks I shall be asking for such a guarantee. I have been speaking of total production, and the over-supply is, I gather to be continued for two reasons.

The first is that the Commission asserts that enlargement of the EEC will cause the surpluses to fall heavily. Its own assessment of the situation shows how much those words are exaggerated, for the fall will apparently be about 250,000 tonnes out of a surplus of 3 million tonnes, so that 91.5 per cent. of the existing surplus will remain in surplus even after enlargement of the Community.

Secondly, the plea is made that there will be further consumption of sugar in the chemical and biotechnological industries. I hope that that occurs and that the United Kingdom gets its fair share of development and innovation. But how much additional production and consumption will that mean? The estimates vary from 80,000 tonnes in the EEC today to about 500,000 tonnes in 1992; and by then, it is estimated by the Chemical Industries Association, Britain might be using 150,000 tonnes. But those estimates depend upon one factor, which I have double-checked with the association: that sugar is available at the world price. That means, on all the figures that we have, that it is charged at a quarter of the present price, with a 75 per cent. subsidy—double what is now being offered. The gap must force a downward revision of those forecasts of consumption. Indeed, the Chemical Industries Association says that, if the price remains as it is, there will be no extra consumption of sugar in those industries. At the moment, the United Kingdom is already producing a surplus of 200,000 tonnes, so that in 1985 we grow more than we estimate that the chemical industries could possibly need as a maximum in 1992.

Like many other hon. Members, I have been lobbied, fairly but firmly, by the British Sugar Corporation about an increase in the beet sugar quota to meet the expanded demand. If I were satisfied about the justification of it by statistics and assured that it would not go indirectly into the food industry, thereby destroying hundreds of jobs in the Westburn refinery of Tate and Lyle in Scotland, I might find the argument persuasive. But on the arguments I have given, I cannot see—[Interruption.] Hon. Gentlemen talk about British sugar. We once talked about British steel, on which they were nothing like as protective.

Mr. Michael Brown (Brigg and Cleethorpes)


Mr. John

No, I am talking about

Mr. Brown


Mr. Deputy Speaker

Order. The hon. Member is not giving way.

Mr. John

I care deeply about sugar. I care about it deeply enough not to tell people and producers in this country fairy tales by pretending that there will be a lot of consumption which I do not believe to be merited on the facts. I believe that the existing production will cover any reasonably sane estimate of the extra consumption in the chemical industries and the various other technological industries.

All efforts should be geared to bringing sugar production in the EEC under control. As the Commission has evaded the problem, it can only add to its unenviable reputation for procrastination. The regime is not self-financing. In 1985 it cost us £385 million on the CAP budget, and as consumers it cost us a great deal more.

Document 8687/85 tries to cure the problem by proposing a levy. Is that in fact so? In last Friday's Financial Times and this week's Agra Europe, one reads that a much more timid and therefore much more popular—in Europe—set of levy proposals now exists. If that is true, how can we be expected to take note of the document, except possibly as a historical curiosity? I believe that the weakening of the proposal will lead to a further charge on the CAP. Have the Government estimated how much that will be?

I did not seek to amend the motion, because I regard our pledges to the ACP countries of 1.3 million tonnes of cane sugar as absolutely and firmly binding. I hope that the Government have the same feeling about it. I notice that the Minister assents. If that is so, it is a shame that it was not put in the motion. But a ministerial assurance will suit me, and I hope that the right hon. Gentleman will repeat it.

In this case, as with so many agricultural matters, the problem is that many people see the parts without the whole. Although we note the documents tonight, we must regret that an overall view is as far removed from the Commission as it ever was.

10.39 pm
Mr. Geoffrey Rippon (Hexham)

I welcome the Minister's comment about the firm commitment to the Commonwealth sugar producers. Many of us are deeply concerned that the commitment should be honoured. It may be wrong to talk of us continuing to behave generously, but that is true, at least in the sense that there is no doubt that the Commonwealth sugar producers have benefited considerably, as the Minister said, in a difficult world market, from the undertaking that we and the Community gave when Britain became a full member.

We gave the clearest possible assurances at the Lancaster house conference of a secure and continuing market of comparable quantities to that which the United Kingdom and the Community had entered under the Commonwealth Sugar Agreement. We also said that we would give fair prices. At the conference we were asked for and gave what were described as "bankable assurances"—that we would accept the Commonwealth sugar in comparable quantities at remunerative prices. That is the justification for paying the Commonwealth sugar producers the appropriate price.

There is much discussion in the House about the need to aid the developing world and how we must help it through its debt crisis. The best way for us to help is by paying developing countries a fair price for what they produce. That is a specific and moral commitment, and I am sure that no hon. Member would want to withdraw from that.

Furthermore, at the Lancaster house conference I said: If quotas for beet sugar production were increased in such a way that imports from Commonwealth countries were threatened, it would be a breach of the undertaking by the Community. What we wanted tonight, and what I think my right hon. Friend has given, is an unequivocal assurance that the undertakings given in 1971, and subsequently, are being honoured by the British Government.

The Commission found that the world market was in a serious state and that future prospects were bleak. For that reason it said that it was right that the existing quotas should not be increased. The Commonwealth sugar producers are concerned about what is happening in the United Kingdom because our consumption of their cane sugar has fallen rapidly: at one time it was two thirds, but it is now clown to 50 per cent. Against that background, it is difficult to argue for an increase in sugar beet quotas, especially when we have overproduction, not only in the Community but in the United Kingdom. Even if an additional demand from the chemical industries is expected, that does not justify any increase in sugar beet quotas at present.

People have talked about the loss of jobs, and there is a real fear that the closure of Tate and Lyle's refinery in Liverpool might be followed by a closure in Greenock, Scotland. That might result in a loss of some 400 jobs. There are job losses to be faced in any circumstances, but the House must bear it in mind that we have an honourable record of keeping our treaty commitments, and there was a clear treaty commitment. I remind the House that it was demanded from the British Government by both sides of the House when we entered the Community.

I understand that there is a dispute about the level of the ACP guaranteed prices. The initial offer was for a 1.15 per cent. increase for raw sugar compared with 1.3 per cent. for white sugar. The Commission document, issued on 11 September, said: the Commission proposes that the Council should alter the intervention price for raw sugar so that it is increased by the same percentage as that for white sugar, that is, by 1.3 per cent., and that it should be set at 44.92 ecu per 100 kg with effect from 1 July 1985. I hope that the Government now accept that. I have had a look at the explanatory memorandum submitted by my right hon. Friend the Minister to the House on 4 October 1985, which says: The proposal retrospectively to increase the raw sugar intervention price would mean that the refining margin would increase by only 1..8 per cent. while that for beet processors would remain at 3..5 per cent. The Government therefore opposes this proposal which would discriminate against cane refiners. I should like it to be made clear that the Government are opposed to any discrimination against cane refiners in respect of those prices. It may be a small amount money, but it is a principle to which the Commonwealth sugar producers rightly attach importance. Perhaps my right hon. Friend will clear that up.

10.45 pm
Dr. Norman A. Godman (Greenock and Port Glasgow)

I beg to move at the end of the Question, to add: and fulfil the objectives set out in the Resolution of the House relating to sugar supplies of 11th November 1974. The amendment is in my name and those of my hon. Friends the Members for Newham, South (Mr. Spearing) and for Newham, North-East (Mr. Leighton).

I remind the House of what the resolution referred to in the amendment said 11 years ago: That this House takes note of Commission Document No. R/1900/73, but declines to approve Commission Document R1957/74 as it makes no provision either for continuing imports, at fair and stable prices, of at least 1..4 million tons of cane sugar from Commonwealth countries, or for the continued existence of and employment in the port sugar refining industry in the United Kingdom, or for securing long term supplies of domestically refined cane sugar at a fair price to consumer and producer."—[Official Report, 11 November 1974; Vol. 881, c. 202.] The calling of this Back-Bench amendment is very important. Take-note motions are of major importance, as my hon. Friend the Member for Newham, South said to the House in the debate on sugar supplies on 11 November 1974. Therefore, I am most grateful to Mr. Speaker for his recognition of the need to debate the amendment. I remind the House that it refers specifically to a resolution of the House of Commons. The Government's objectives must surely accord with those contained in the resolution. To accept the amendment would be to continue with the resolution.

The motion proposed by the Minister, despite what he said, is a little ambiguous. If hon. Members will allow the lack of modesty, the amendment removes that ambiguity. At the same time, it diminishes the fears felt by many people employed in the United Kingdom cane sugar refining industry, by their families, and by all those who obtain a living from the production of that crop in the African Caribbean and Pacific countries.

At one level, my deep concern is shaped by the important fact that the one remaining cane sugar refinery in Scotland is in my constituency. It is owned by Tate and Lyle, which owns another and bigger cane sugar refinery in the constituency of my hon. Friend the Member for Newham, South. In Greenock, 400 people are employed in the refinery. As I have said before in the House, the refinery in Greenock is an integral element in the Scottish food and drinks industry, which employs between 16,000 and 20,000 people. Their fear, which is felt by many people in the ACP countries, is that Her Majesty's Government may agree to an increase in the United Kingdom's total sugar beet quota.

That deep anxiety is shared by my constituents' employers. On Friday I received a letter from Mr. Tomlinson, a director of Tate and Lyle, who said: There is a surplus of sugar throughout the EEC and in the UK. Thus the Commission is not proposing to change existing production quotas. In contrast, however, the UK beet industry is arguing for an increase in its quota. If this were to he granted it would have substantial repercussions for cane sugar refining. Over 400 jobs would be lost as a result of the closure of Scotland's only sugar refinery and many more jobs in Scotland's food and drinks industry would be at risk. Recently, I have had cause on more than one occasion to mention in the House the scandalously high levels of unemployment in my constituency.

An increase in the United Kingdom beet quota would swell an existing sugar surplus. The European Commission would surely refuse to allow increased surplus production being dumped on the world market, which is already suffering from a severe depression. It has been argued that in the near future sugar could become an important feedstock in the chemical industry. That argument is buttressed by the threat that if there is not an adequate supply, the United Kingdom chemical companies will build plants in France and other Community countries. Others argue that there is no case for an increase in the United Kingdom sugar beet quota.

A document from Tate and Lyle states Existing UK sugar supplies are more than adequate to fulfil the anticipated additional UK demand for sugar for industrial uses. There is already a large EEC beet surplus which is having to be dumped on depressed world markets at prices well below cost in competition with developing countries, thereby ruining their economies. I am being asked about the people in the beet sugar industry. I am concerned for them, but their position is not affected by what is happening to the cane sugar industry. In addition, I have mentioned the threat to the people involved in the food and drinks industry in Scotland. For those reasons, my hon. Friends and I tabled the amendment, which refers to a resolution of the House. I sincerely hope that it meets with the approval of the House.

10.52 pm
Sir William Clark (Croydon, South)

I hope that the hon. Member for Greenock and Port Glasgow (Dr. Godman) will excuse me for not speaking to his amendment. I should like to follow the theme of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), and thank my hon. Friend the Minister for giving an undertaking that the ACP sugar quotas would remain intact.

I remind the House that the ACP quotas came about because of the cessation of the old Commonwealth sugar agreements. Invariably, all the ACP countries from which we take cane sugar are Third world countries. That is an important factor. Until recently I was a director of Belize Sugar Industries, and I am now a consultant to Tate and Lyle. When we joined the European Community, two thirds of our sugar consumption was cane sugar, but now it is 50 per cent. The ACP countries are unquestionably worried about the continual pressure on cane sugar. They do not want to see any more erosion of their quotas, and my hon. Friend has assured them of that.

The ACP countries have met their quotas, but, nevertheless, they look at the European market and see that even in the United Kingdom we have a sugar surplus of 200,000 tonnes a year. As the hon. Member for Pontypridd (Mr. John) said, the excess in the Common Market is 3 million tonnes. That must be frightening for a country whose staple crop is cane sugar.

When we talk about the alternative uses of sugar, for example chemical ones, even MAFF has predicted that the maximum increase in consumption for the chemical industry would be about 50,000 tonnes. The British Sugar Corporation is asking for an increase of 350,000 tonnes, even though we have a surplus of 200,000 tonnes. If in 1991—let there be no mistake that we shall have to wait six years for this—there is an increase in consumption of 50,000 tonnes, that will still mean a surplus of 150,000 tonnes.

The price of sugar is depressed throughout the world simply because of the glut, and in no circumstances should we increase the quotas for the EEC. My right hon. Friend said that the quotas that we gave to the ACP countries were generous. That is a point of view to which I do not necessarily subscribe. As my right hon. and learned Friend the Member for Hexham said, we have a moral obligation to the old Commonwealth Sugar Agreement countries, and we should remember that they are Third world countries.

In many cases a Third world country has two quotas—an EEC quota and an American quota—and the balance of its production is sold on the world market. The EEC quota is sacrosanct, and in many cases the American quota has just been reduced under the Carribean initiative precisely to protect the sugar industry in the United States. Therefore, these ACP countries have already suffered a blow.

Some Opposition Members criticise the Government's aid programme and say that it is not sufficient. Personally, I do not believe that we should be ashamed of our aid programme, but we are wrong in not helping the ACP countries. If the chemical industry wants more production, let us increase the quotas for the ACP countries, because economically that would be far better.

From a political point of view, we should remember that the staple crop of an ACP country is cane sugar. It is all very well for people in the United Kingdom to say, "Let them diversify," but in many instances such countries cannot grow something else because the agronomy is not good enough. Beet sugar is grown in a temperate climate, where there is far more opportunity for diversification—[HON. MEMBERS: "Into what?"] Cereals, barley and so on. Temperate climate countries have a better opportunity of diversifying than have Third world countries.

If cane sugar comes under attack and there is an erosion in production, there is the possibility of the closure of the Greenock refinery[Interruption.] My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) says that the Lincolnshire farmers are impoverished, but I doubt whether anyone else would agree.

As for employment, we are not arguing that the beet industry should be cut. It wants to increase its production. Leaving aside the economics of the argument, we must realise that cane sugar is extremely labour intensive. If there is a world reduction because of our quota system, a political vacuum will be created and the West will have to pick up the bill and give more and more aid. I am convinced that it is much better to give Third world countries trade rather than aid.

10.59 pm
Mr. Gordon Oakes (Halton)

I wish to confine my remarks to what the Minister and my hon. Friend the Member for Pontypridd (Mr. John) said—the importance of starch and sugar to the chemical industry. There is a market for starch and a growing market for sugar provided as my hon. Friend correctly said, the chemical industry can buy at world prices. He said that the chemical industry's sugar consumption might remain the same, unless that were to happen. I am more doubtful than my hon. Friend because this country's chemical industry must compete with the world chemical industry which buys at world prices.

The starch agreement is relatively good. It is welcomed by the chemical industry and the Chemical Industries Association. The sugar agreement, in particular sugar agreement No. 9178/85, does not go far enough. The only answer for this country's chemical industry, as my hon. Friend the Member for Pontypridd said, is to amend it or to introduce a new regulation which will allow the chemical industry to buy at world prices. We are not talking, as are the regulations and the common agricultural policy, of sugar as a food. We are talking of it as a feedstock which can provide an exciting new industry. I shall tell the House about some of the new developments that can take place within the chemical industry, provided that the price of feedstock meets world prices and the rebate brings the cost down to world prices and not to a percentage of them. In that event, instead of having two hands tied behind its back, it would merely tie one of the industry's hands behind its back.

This country is in the lead in the development of various new chemicals. They can provide considerable employment and attract capital investment. One of the developments is a type of plastic called PHB. We are ahead of the world in its development. We are being restrained in the development of that bioplastic because of the price of sugar as a feedstock to the chemical industry. Xanthan gum is another of our developments. I have as little knowledge as most other hon. Members of these matters, but xanthan gums are used for oil tertiary recovery. It will be important when our oil starts to run out in years to come that we have a home-based chemical developed by our chemical industry to assist in the tertiary recovery of oil. There are many exciting developments—for example, single cell oils, enzymes and microbial cultures—taking place in our chemical industry.

I have intervened because I have a chemical industry constituency and I am deputy chairman of the House all-party chemical industries group. The Chemical Industries Association asks Ministers and the House to cease regarding sugar as a food only and regard it as it truly is—an important feedstock for the British chemical industry which can provide jobs for many thousands of people.

11.4 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

I represent one of the prime sugar beet growing areas of this country. The Bardney factory is in my constituency and the Brigg factory is just over the border in the constituency of my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown), who is in his place for this debate.

Farmers in my constituency are in a quandary. They are possibly the most efficient in the world and they farm some of the most intensively cultivated land in the world. They are told that they are over-producing cereals. Where can they turn? They cannot turn to milk or potatoes, because those products are already subject to quotas, and there is little possibility of turning to sugar under the present quota arrangements.

That is an intolerable situation. We consume more sugar per head than any nation in Europe, but our sugar beet quota covers only 49.7 per cent. of consumption at 1.144 million tonnes. Our consumers have a right to the best sugar at the lowest price on offer. The farmers of Lincolnshire are ready to offer them that sugar but are denied that opportunity by our EEC partners.

Mr. Jim Lester (Broxtowe)

Will my hon. Friend give way?

Mr. Leigh

No, we have had enough spokesmen in this debate for the sugar cane industry. I intend to stand up for the sugar beet farmers of this country. We all know the historical reasons for the discrimination against them. It is King Cane. The Government must decide what is their first priority, Barbados or Bardney, Brazil or Brigg. The cane producers have had it too good for too long. We can no more allow old loyalties to maintain artificially high quantities of cane to the disadvantage of our sugar beet producers than we should maintain artificially high imports of New Zealand butter to the disadvantage of our dairy producers.

It is intolerable that our sugar beet quota covers only 49.7 per cent. of consumption while in other EEC member states the proportion ranges from 102.5 per cent. to 232.7 per cent. in Luxembourg. Current United Kingdom consumption is 2.3 million tonnes, and by 1990 it will have increased by more than 250,000 tonnes.

As the right hon. Member for Halton (Mr. Oakes) has said, we look especially for new opportunities in the biotech industries. The possibilities exist to use our sugar beet for the manufacture of pharmaceuticals, cosmetics, paints, bakelite, wood stabilisers, polymers, washing-up liquids and even citric acids. Those new industries should be set up near the large sugar producing areas of this country, not in Brazil. Without an increase in our quota there will be no secure source of supply for those new industries.

The Government must press for an increase in our sugar beet quota, first, by reallocating quotas from other member states. If that is not possible, as the United Kingdom is the only EEC state disadvantaged and discriminated against, a special case should be made out for this country. At the very least, we should restore the 1981 cut, leaving all the other quotas unchanged.

Since joining the EEC we have pursued a responsible sugar beet quota policy. Is our good behaviour to be rewarded by a stagnant industry? I ask my hon. Friend the Minister to hold true to his words of 20 November when he said that the Government would insist that Community measures did not discriminate unfairly against the United Kingdom. The insisting must start here in this House today.

11.7 pm

Mr. Nigel Spearing (Newham, South)

The hon. Member for Gainsborough and Horncastle (Mr. Leigh) is right to say that there should not be discrimination against the United Kingdom, but I thought that in the balance that he mentioned beet quotas had been substantially increased as a proportion of domestic sugar production and consumption over the past 10 to 20 years. Assuming that that balance has been reached, the question is whether we need an overbalance.

I speak with two hats in this debate—as Chairman of the Scrutiny Committee, which produced a number of reports on the documents before us, and as a constituency Member, having put my name to the amendment tabled by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman).

There ar three groups of problems. Documents COM(84)620 and COM(85)504 deal with possible new outlets for our sugar surplus. My right hon. Friend the Member for Halton (Mr. Oakes) pleaded the case of the chemical industry. The Select Committee on European Legislation said in its report HC 5-xxx, 1984–85: The Commission points out that the European Council of Chemical Manufacturers' Federations has said that if sugar were available at less than Community prices up to an additional 450,000 tonnes pa could be used by 1990. I presume that that is in the chemical industry. Whether taking crops from the ground and putting them through chemicals is a good way of dealing with natural resources is another matter.

Document COM(85)498 deals with the current marketing year. I did not detect a specific report from the Minister to explain what is happening within the Council of Ministers about the current sugar year. I hope that he will tell us about that when he replies, and also about the problems in COM(85)433 with the new five-year regime.

We are discussing three issues that have been rolled into one multi-purpose motion. It was the all-purpose and non-specific nature of the motion which caused my hon. Friend the Member for Greenock and Port Glasgow to table a specific amendment to something that had already been decided by the House.

The attendance in the Chamber and the interest shown in the debate show how important the topic is. I think that I counted 18 Members rising in their places and seeking to catch your eye, Mr. Deputy Speaker, a few minutes ago. When the Minister opened the debate, he did not spell out the three issues that are before us. I do not think that he mentioned one of the documents numerically, which I found rather disappointing after the reports of my Committee and the memoranda which the right hon. Gentleman has submitted. I am aware of the pressure of time, but I wonder whether that is the right approach to these matters.

I shall conclude by taking off my Chairman's hat and putting on a constituency hat. I know that the House will not deny that right to every Chairman of a Select Committee when the time comes.

When the Minister began his speech, he made some conciliatory and helpful remarks about the Third world and the moral duty which the House has in continuing the arrangements of the Commonwealth Sugar Agreement and in upholding undertakings that the Community made to our Commonwealth partners. A great moral issue is facing the First and the Third worlds, and I am glad that the Minister referred to it. However, I do not understand his reluctance to declare his attitude to the amendment, which merely refers to a resolution of the House about 10 years ago.

The Minister said that he would listen to the debate, and here is my contribution. If the Minister has to listen to the debate to decide whether he will reiterate an undertaking, objective or view expressed by the House about 10 years ago, that is a pity. I see that the Minister shakes his head, which relieves me. I shall take it that he agrees with the objectives outlined by the House 10 years ago, and as quoted by my hon. Friend the Member for Pontypridd (Mr. John). If, as I apprehend, the Minister agrees with those objectives, he must accept the amendment. If he does not, and if the House shows some disagreement over the matter, the only inference to be drawn is that there has been some slippage between what the House decided 10 years ago and what the Government want today. I do not believe, from his opening remarks, that the Minister meant that, but that would be a possible interpretation if he says that he cannot accept the amendment, which only reiterates the status quo. I do not believe that the Government would wish to indicate that the status quo has changed.

11·14 pm
Mr. Colin Moynihan (Lewisham, East)

Until my election to represent the people of Lewisham, I was employed throughout my working life by Tate and Lyle. The contractual relationship lasts to this day, and therefore I shall declare an interest.

I support the motion, but there are problems within the operation of the sugar quota system which, even with the terms of the motion, can be tackled effectively by the Minister in the forthcoming round of negotiations in Brussels, which can in turn secure the future of the Westburn refinery.

In support of the proposals that we are considering, it is argued that there are many reasons why there may be an increase in United Kingdom sugar demand between 1986 and 1991. Where will the increases come from?

I agree with the Minister that the Commission believes that there could be some substitution of glucose by sugar in fermentation uses. However, the total change is not expected to be more than 50,000 tonnes. The beet lobby argues that sugar will become an important feedstock in the chemical industry. However, even the most wildly optimistic estimate of sugar for such use is only 100,000 tonnes, and most industrial experts consider that the increased demand is likely to be no more than 10,000 tonnes a year during the next five years.

The right hon. Member for Halton (Mr. Oakes) spoke about the pharmaceutical use of sucrose as a base. First, ICI has made the plastic substitute PHB, which is an important development that could become a competitor functionally for polyesters. But it could become a competitor only if the feedstock was priced at between £80 and £110 per tonne, based on the world price during the past two to three years, not—as the proposals before us suggest—at £250 or £260, which is the B quota net of levy. Even the Chemical Industries Association says that there is no chance of that happening or of the pharmaceutical industry taking that amount of sucrose coming on to the market at £250 or £260 per tonne.

The second important factor to remember about ICI is that production technology is at an early stage and that the applications technology is even further away. The problem with the RHM microprotein—hon. Members will be aware of that product, which has been widely publicised—is that glucose is a much-preferred substrate, anyway. One disadvantage of sugar as a substrate is that it causes effluent problems, so it would be much more preferable to use glucose. Indeed, there is at present no competition with starch.

For these, and or antibiotics and blood plasma extenders, there is very little expected demand from the chemical industry. Much research has been carried out on polymers oil recovery and on xanthan gum, not least in Knowsley by Tate and Lyle. It is expected that production will require no more than 1,000 or 2,000 tonnes of sugar between now and 1991. Finally, citric acid is made from molasses, which is an uncontrolled commodity and cheaper than world price sugar. Unless EC sugar is offered at the world price of the past two to three years, none of those will be tenable commercial objectives for production during the next five to six years.

Mr. Lester

We listened to my hon. Friend's enthusiastic support of British sugar beet farmers. Would they be prepared to produce sugar at those world prices rather than at the heavily subsidised EC prices?

Mr. Moynihan

The answer is certainly not. They would not even be prepared to produce sugar at the proper B quota price at a levy of 39.5 per cent., rather than a composite levy.

But even if the figures of 50,000 tonnes and 100,000 tonnes were correct—the House should beware accepting them readily—the increased demand would be only 150,000 tonnes, which is already less than the surplus in the British sugar market of 200,000 tonnes. Therefore, even if we accept those figures—I do not—we are already in surplus to the tune of 200,000 tonnes. On that basis, there can be no argument for an increase in beet quotas.

The British market is divided approximately 50–50 between cane and beet sugar, and hon. Members will be aware that 100,000 tonnes of cane sugar is refined in an area of high unemployment on Clydeside, at the Westburn refinery in Greenock. The difficulty with the proposal before the House and the discussions that may have preceded tonight is that they may allow the British Sugar Corporation to increase its production by up to 200,000 tonnes of additional quota. That figure represents 9 per cent. of United Kingdom demand, and the proposal is to add it to a market which is already oversupplied by 10 per cent.

Sugar for the domestic market is produced under an A and B quota system carrying a differential levy. After payment of the levy, sugar is produced under the two quotas, it is in free circulation and is almost indistinguishable. In 1985, the United Kingdom's A quota was 1.04 million tonnes, carrying a levy of 2 per cent. As hon. Members will know, the B quota of about 104,000 tonnes—just 10 per cent. of the A quota—carries a total composite levy of 39–5 per cent. The levy is paid by the producer.

The whole point of the original proposals was that quota A was intended to equate to an approximate Community consumption and quota B was originally designed for specialisation, to encourage producers of high efficiency to produce the marginal additional sugar required. In effect, the idea was that only a producer with a 40 per cent. cost advantage equivalent to the quota B level would be encouraged to produce marginal sugar under quota B, but that has not happened, not merely in the United Kingdom, but in all European countries.

Growers and producers have worked together on an average pricing system, which effectively eliminates the disincentive effect of the much higher tariff under the quota B system. The result is that all sugar allocated under any form of increased quotas will be produced, and at an average of the marginal levy of approximately 5.4 per cent., whereas the marginal levy under quota B would, if the system were working properly, as it was set out and intended, be a 38.5 per cent. levy.

Because of this abuse of the two-tier system, it is certain that the whole of any additional quota being produced would be supplied into the market by BSC, and because of the nature of the BSC operation, the substantially increased volume of throughput would lead to average unit costs falling. At the same time, because of the increased average levy implied by the change of the ratio of B quota to A quota, the intervention receipt that is the basic intervention price—the average levy payable—will fall.

BSC, having much more of the margin with which to manoeuvre in the market, will compete against Tate and Lyle, and will be in a position to do so, but, because of the protective market in which it operates, caused by the process that I have described, the BSC will force 100,000 tonnes of sugar out of the United Kingdom market, and that will mean the closure of a fundamentally important job provider in Scotland. That is what is critical in this debate.

It is not palatable to hear B producers argue that if we do not go ahead with the proposals there will he a loss of jobs in beet because the debate is about an increase in quota, not a status quo. If the status quo remained, BSC would not be losing jobs. It has not publicly said so, but we know that if there is an increase in the quotas, because of the system working as I have explained there will definitely be job losses at Greenock for cane refineries. That is the critical point.

The international consequences of this would be serious. The importance of them is that the ACP countries will lose out. If there are 100,000 tonnes less of supply coming into the British market, even if it is shifted to Portugal—which has 50,000 tonnes given to it under the accession arrangements for its entrance into the Community—Portugal could still need 250,000 tonnes which it gains from either ACP supplies or the world market, and 100,000 tonnes will need to be shifted cross to Portugal, leaving 100,000 less coming from the world market. Yet again, there will be a depressed price for world sugar in countries that cannot even now supply at the world market price because it is so heavily depressed by flooded, over-subsidised European beet that is below the production costs of even the most efficient cane producers world wide, who have a competitive advantage in the production of sugar.

It surprises me that hon. Members who regularly argue for the workings of a free market, and argue to ensure that we have effective free competition, based on good quality competitive price and delivery terms—all the arguments of the free marketeers—suddenly pop up one evening, throw all that out of the window, go for massive protectionism, the like of which is even subtly suggested at being at a different level from that which quota A and quota B intended, and then happily appear tomorrow arguing in favour of free competition. If that point does not go home to everybody inside and outside the House, no other point will.

11.24 pm
Mr. Guy Barnett (Greenwich)

I agree with the speeches of the hon. Member for Lewisham, East (Mr. Moynihan) and my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). My views on the subject are well known and they accord with what has been said by both hon. Members.

I do not want to get involved in the cane-beet debate, not because I am not interested in it but because I have yet another constituency interest, and there are many in this debate. A firm called Tunnel Refineries is in the forefront of converting from traditional maize wet milling capacity to the utilisation of United Kingdom wheat. By the spring of next year it expects to have achieved between 40 and 50 per cent. replacement of its raw material capacity by United Kingdom wheat. Therefore, in that respect the firm—no doubt this applies to others which make use of United Kingdom wheat as a raw material for starch and glucose production—can and does make a significant contribution to reducing the scandal of mounting United Kingdom intervention stocks of wheat.

Some hon. Members may have noticed The Sunday Times article on 17 November showing that some 330 secret grain stores exist in Britain, in which some 6 million tonnes of surplus wheat and barley are stored. The total value of the surplus supplies is estimated to amount to a staggering £700 million. surely equally worrying is the fact that maintaining that piece of expensive nonsense costs the taxpayer £72 million a year.

At present, the United Kingdom consumer consumes in excess of 750,000 tonnes of starch and glucose based upon the conversion of cereals. Indeed, United Kingdom companies have a capacity in excess of 1 million tonnes. However, in spite of its intention to maintain internal cereal prices well above world price levels, the Commission also proposes to increase the cost to the consumer even further by removing the production refund for starch required by the food industry. It appears to think that all food products are protected from world price competition by the common agricultural policy.

I understand that the Ministry of Agriculture, Fisheries and Food has identified a number of important products, including soft drinks, beers and baby foods, which are not so protected. The Commission proposes to retain the production refund for only a limited number of products for industrial application. The effect of that will be increased food costs for the consumer and reduced willingness of United Kingdom manufacturers, such as Tunnel Refineries, to invest in the plant required to convert grain surpluses. If the Government were to encourage the conversion of grain surpluses, the United Kingdom starch and glucose industry could consume over 1 million tonnes per annum.

If that wheat is to be stored in intervention the cost is 35 ecu a tonne. If exported out of the EC, the cost of export refunds is 77 ecu a tonne. So the total cost of storage and export is 112 ecu a tonne, while the starch and glucose manufacturers receive only 27.79 ecu a tonne under the current starch regime. That is a potential saving of 84 ecu a tonne; a saving which I am told can be estimated at some £52 million a year.

In view of that, I ask the Minister to oppose the loss of the production refund on starch on food and other purposes which is proposed under the new starch regime. I am told that the Dutch are insisting on special treatment for their potato starch industry, so why are the Government not insisting on special treatment for our industry? I would expect them to be more robust than they appear to have been so far in defence of our national interest as well as the interests of my constituents.

Mr. Deputy Speaker

It may help the House if I say that the Minister would like to begin his reply at 11.35 pm.

11.29 pm
Sir Eldon Griffiths (Bury St. Edmunds)

I am a sugar beet man. I live among sugar beet. The main view from my window is of the largest sugar beet factory in Europe. I agree with the Minister of State that we have an obligation to the African, Caribbean and Pacific countries and that we must stick to it.

I regret that this debate has turned into an argument between Liverpool and Greenock on the one hand and Bury St. Edmunds and Gainsborough and Horncastle on the other. It is not an argument between Tate and Lyle and the British Sugar Corporation. It is an argument about how this country is to obtain a larger share of what the European Community is producing for this country.

My proposal is simple. There is a case for justice to be done to efficient British agriculture. This must not be done at the expense of ACP production. It must be done at the expense of some European countries that have higher quotas than they need. Our quota is lower than it ought to be. When the quotas were fixed, British agriculture was unfortunate enough to have had a bad year, and our production fell. Consequently our quota was set at the wrong level. I hope that my right hon. Friend will seek to obtain from the European Community an improved quota for the efficient British sugar beet industry, at the expense of those in Europe who can afford to give it to us.

11.30 pm
Mr. Ron Leighton (Newham, North-East)

Not so very long ago I went to Belize on behalf of Mr. Speaker to present to the Parliament of that country its Speaker's chair. The importance of sugar to that country's struggling economy was impressed upon me while I was there. There has been a slump in the world sugar market, caused by the heavily subsidised dumping of surplus beet sugar by the European Community. It is causing deepening poverty in the already poor tropical and Third-world countries. As a result of dumping, prices on world markets have been below the cost of production anywhere in the world. That is immoral. It is blighting and destroying the hopes of those countries.

I thought that the Conservative party believed in free markets and in removing market rigidities, but that does not appear to apply to sugar. Rigid protectionism is being applied. Therefore, stocks are at an all-time high. They are equivalent to half the world's annual consumption of sugar. However, the production of beet sugar in the Community, bolstered by protection, is defying all the economic laws of gravity. The European Community price is six times higher than the world price.

The talks on the international sugar agreement have collapsed. There is now a free for all, which means that those countries with the biggest subsidies are winning. Therefore the richer farmers in the richer countries are enjoying the largest subsidies.

The European Community is one of the main culprits. Western Europe used to be a net importer of sugar. It is now one of the biggest exporters. It unloads millions of tonnes of subsidised sugar. Its exports have escalated dramatically. They trebled between 1978 and 1984. Western Europe's world market share is now 25 per cent. This is obtained by subsidies of up to 85 per cent. of the European Community's internal price. How can that be justified? Nor should we be deluded by the myth that this is self-financing. It is nonsense to think that the levies mean that the producers are financially responsible for the disposal of sugar surpluses. Producers get such a high price for quota sugar that they can easily afford to export surpluses at marginal prices.

Price discipline is the only sensible course. It is our duty to call for a change. The quotas result in an unseemly scramble for shares. Britain comes off worst, as usual, in the European Community, but that is another story. The cost of the sugar regime is 2 billion ecus. That is the cost not to the budget but to consumers because of artificially high prices. This is bad for the consumer. It is also bad for sensible farming in this country and for the Third world. It should be opposed by Parliament and by the Government. I hope that the Minister's constructive and conciliatory words in his opening speech will be carried through to his closing speech. I hope that he will assure the House that there has been no slippage and that he will accept the amendment.

11.33 pm
Mr. Gummer

My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) said that it is sad that this should have developed into an argument between the cane sugar and the sugar beet interests. The argument is more complex than that. I take seriously his point about the continuing concern in this country that the original arrangements for the quota were based upon a year that was atypical. That must mean that the British sugar beet industry feels that it has been done down by the rest of the European Community. That is why I said that it was not unreasonable to look for a redressing of that balance. However, when a system is in place, that is rather difficult.

I must tell the hon. Member for Newham, North-East (Mr. Leighton) that the problems that he adumbrated about those in favour of the free market can be turned on their heads. He is not noted for his battling in support of the free market in other areas. We are trying to find an answer to two very different interests, both of which are concerned with jobs, both of which are important and neither of which can be ignored.

I listened with considerable care when the hon. Member for Greenock and Port Glasgow (Dr. Godman) spoke to his amendment. I am not especially happy about the wording of the amendment, not least because it refers to 1.4 million tons, which he knows became 1.3 million tons through no fault of this country, but because the countries concerned did not wish to take that extra amount. He will understand that my hesitance is not because I wish to slide or to slip. I am sure that the hon. Member for Newham, South (Mr. Spearing) would acquit me of being of the temperament to do so without a good deal of previous announcement.

I do not like the wording of the amendment because it may be read as suggesting that we are not already doing the things that it suggests when in fact the achievement of the Government and the Community is to carry out precisely what is contained in the resolution of the House. Therefore, I should be sad if the amendment were read as an indictment of what we have done since 1974.

If the hon. Member for Greenock and Port Glasgow will accept that those aspects are not central to what he is proposing, I believe that it would be even more misleading if I recommend to the House that it should oppose the amendment. I am sorry that the hon. Gentleman has put the House in this position. If I oppose the amendment, it might be thought that the Government were in some way resiling from the position that they and previous Governments have taken. Therefore, I shall recommend that the House accepts the amendment. I hope that the hon. Gentleman will take that in the spirit in which it is said.

As I said in my opening remarks, I am confident that the United Kingdom will continue to provide a secure market for ACP sugar, provided that the price remains competitive with Community beet sugar.

I hope that my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) will, in retrospect, agree that to suggest that ACP countries have had it too good for too long is not entirely true. With a country such as Barbados, it is difficult not to accept that the standard of living, the dependence on a single crop and the problems that it faces really cannot make it comparable even with farmers in Suffolk—and I say that representing a Suffolk constituency.

Mr. Clement Freud (Cambridgeshire, North-East)


Mr. Gummer

Social Democratic and Liberal Members have been present throughout the debate. Because it is difficult to formulate a reply, they have not said anything about the issue. I do not intend to give way.

We must consider the issue carefully. My right hon. and learned Friend the Member for Hexham (Mr. Rippon) fairly put his finger on our moral responsibility to the ACP countries. I hope that my hon. Friend the Member for Croydon, South (Sir W. Clark) and others who pressed the issue will accept that in the circumstances of some increase in likely demand—not only because of the new accessions of Spain and Portugal, which we welcome, but because of the likely changes in the demand from the chemical industry—it would not be unreasonable to try to obtain some redressing of the balance for beet sugar. I do not think that such a redressing would have the dire consequences—it would not go far enough for that to happen—that my hon. Friend the Member for Lewisham, East (Mr. Moynihan) suggested.

My hon. Friend pointed to some of the technological changes and warned against being over-enthusiastic about the new markets and opportunities. I hope that the Ministry of Agriculture, Fisheries and Food has at no time been over-enthusiastic, but it would be wrong to ignore some of those opportunities, and it certainly would be wrong not to organise ourselves so that we can take advantage of those opportunities. I agree with my hon. Friend that we must fight for the interests of this country within the Community, however communautaire we may be.

Mr. Bowen Wells (Hertford and Stortford)


Mr. Gummer

I hope hat my hon. Friend will forgive me if I do not give way. Only four minutes remain and I have some important points to raise, particularly in reply to the hon. Member for Pontypridd (Mr. John).

We are fully alive to the problems to which the hon. Member for Pontypridd referred in relation to the coming five years. He was right to say that the proposals now before the Council are not the same as were originally proposed. In the end we must arrive at an agreement between all the countries. I have looked at the issues carefully, and we are continuing to consider the way in which those matters will fall country by country.

There is no reason at present to suppose that we cannot produce an answer which may mean it being a self-supporting regime. The hon. Gentleman was right to say that the argument becomes much less reasonable if it is not self-supporting; it must be that, and we are determined to achieve it. It may have to be achieved in a different way from that originally proposed by the Commission. I am alive to the points that he raised, and we will do what we can to ensure that they are met.

I assure the hon. Member for Greenwich (Mr. Barnett) that I remember the Tunnel Company well from the time when I failed to win that seat from his predecessor. I appreciate the problems with which it is faced.

In the long run, it must be reasonable not no protect people twice, once by subsidy and again by exterior protection. The hon. Gentleman pointed out that some products were not protected by an exterior tariff and that they would not be protected even once if we removed the subsidy. We have gone a long way in changing the Commission's proposal, and I assure him that we have been extremely robust on this issue.

We have moved a long way already and we shall continue to press the matter because we want to continue to help those areas where starch would not otherwise be protected, while removing the double protection at a speed which will not undermine the stability of the starch-producing industry.

My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)—I question the words he used about the ACP countries—was right to remind us that we cannot ignore the fact that sugar beet is an important crop for large areas of Britain and that the continued viability of the sugar beet industry is vital for jobs and agriculture here. However, he must accept that a balance must be kept and that our commitment to the ACP countries must continue. It is a moral commitment from which I hope no hon. Member would wish us to resile.

Amendment agreed to.

Main Question, as amended, put and agreed to.

Resolved, That this House takes note of European Community Documents Nos. 8687/85, 9178/85 and 8781/85, relating to the sugar sector and 11172/84 and 8688/85, relating to the reform of the starch regime, and supports the Government's objectives to secure satisfactory agreements on them which take account of the interests of both producers and users of the products concerned, and fulfil the objectives set out in the Resolution of the House relating to sugar supplies of 11th November 1974.

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