Green Pound

HC Deb 20 June 1991 vol 193 cc450-2

6. Mr. Michael Brown

To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the value to United Kingdom farmers of the green pound devaluation agreed in the recent CAP price fixing settlement.

7. Mr. Harris

To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the value to British farmers of the green pound devaluation agreed in the recent CAP price fixing settlement.

Mr. Gummer

It is estimated that the green pound devaluations should, on their own, increase United Kingdom producer incomes by around £125 million in a full year.

Mr. Brown

Does not my right hon. Friend's reply indicate that, against the expectations of the farming community—which was steeling itself for difficult negotiations with the European Community—my right hon. Friend and his colleagues achieved an incredible increase in farm incomes? Ought not British farmers to acknowledge that we have a Minister and a Government who negotiate in Europe from a position of strength, and who have delivered to farmers an incredible settlement under this year's price review?

Mr. Gummer

I thank my hon. Friend for his comments. The figure of £125 million represents a restoration of the sum that British farmers ought to have —not an increase in their prices. We were offered only one third of that amount, but we got it all. That is partly a result of our strong position in Europe, which has been created in particular by my right hon. Friend the Prime Minister. Clearly, we are seeking to co-operate within Europe, but we also take an extremely strong view of Britain's interests.

Mr. Harris

Is my right hon. Friend aware that his achievement is welcomed by the hard-pressed farming community? Does he agree—as his last reply implied—that for many years British farmers have been cheated of their proper income by the wretched green pound system? Can he give an assurance that it will come to an end by the end of next year?

Mr. Gummer

Certainly. With the single market and Britain's membership of the exchange rate mechanism, we are moving towards a point where we shall be rid of the old green pound system. That is more proof—if proof is needed—that co-operation within the European Community is the way to achieve such ends. We have been successful, but that success was built on hard negotiation and a real understanding of Britain as being in the centre of the Community and not sidelined.

Mr. Martyn Jones

While the devaluation of the green pound is obviously welcome to my farmers, they would probably be far better helped by the payment of the 4 ecu ewe premium supplement this year, if that were possible. Has the Minister any plans to do that in view of the fact that the variable premium will be going by the end of the year and that my less-favoured area farmers are much more hard pressed than the average farmers in this country?

Mr. Gummer

I am sure that the hon. Gentleman would agree that we have tried to help the less-favoured area farmers in all circumstances by bringing forward the payments. It will be easier in future because the computerisation system now takes into account the headage payments and the rest which held us up before. I shall do everything possible to ensure that we pay those as early as we can in the circumstances and we have already announced that we shall do that in two parts.

Dr. David Clark

Can the Minister explain why, under his predecessor—the right hon. Member for Norfolk, South (Mr. MacGregor)—spending on the common agricultural policy fell, but under his own regime there has been an increase of 55 per cent? Does that not prove that the other agricultural Ministers in Europe are giving him the run-around?

Mr. Gummer

The hon. Gentleman proves only one thing—that he has no idea about agriculture—every time that he comes to the Dispatch Box. Farmers' incomes have fallen because the price in the market has fallen. Therefore, support prices have risen. When market prices rise it is possible not to increase support prices. [Interruption.] If the hon. Gentleman presses this matter, the farmers of Britain will know that if there were a Labour Government they could expect a slashing attack on their incomes, a destruction of the farming industry, because the Opposition do not even care about agriculture enough to understand it—[Interruption.]

Mr. Speaker

Order. A lot of the disruption could be stopped if the Minister would turn towards me.

Mr. Jopling

Is my right hon. Friend aware that the bonus of £125 million is enormously to be welcomed and is a matter on which he deserves congratulations? However, will he compare that figure with the second bonus that farmers have received recently, which arises from the 3.5 per cent. reduction in interest rates in the past six months?

Mr. Gummer

My right hon. Friend is perfectly right about that. You, Mr. Speaker, will recognise that the reduction of interest rates has been brought about by the Government's positive policy and our ability to get inflation under control. However, I am sure that you would want me to remind the Opposition that their policies would push interest rates up again and increase taxation to levels that we have not experienced for 15 years.