HC Deb 20 October 1994 vol 248 cc416-7
9. Sir David Knox

To ask the Minister of Agriculture, Fisheries and Food when he will next meet the president of the National Farmers Union to discuss the dairy sector.

Mr. Waldegrave

I regularly meet representatives of all sides of the agriculture industry, including the president of the National Farmers Union, to discuss issues of importance to them, including the dairy sector.

Sir David Knox

Is my right hon. Friend satisfied that the arrangements for Milk Marque will not have an adverse effect on dairy farmers' incomes, particularly in the early stages if payments have to be reduced?

Mr. Waldegrave

The new arrangements put the industry in the proper position of negotiating price and supply between the producers and the manufacturers. That is much more satisfactory. If there were to be abuse by anybody within that market, it would be for the competition authorities to sort it out. I was pleased that the courts ruled that the system should be put in place and that there should be no further delay in the vesting day, because it would have thrown the industry into great confusion if there had been. I believe that the new system will bring benefits to the consumer and to producers, although undoubtedly it will take some time to settle down properly.

Dr. Strang

Surely the Minister is aware of the statement by his predecessor that Dairy Crest would definitely be floated before deregulation on 1 November. As we assume that that will not take place, can he give us some idea of when flotation will occur? Is it the case that the Director General of Fair Trading is likely to refer Milk Marque to the Monopolies and Mergers Commission before Christmas? What will the Minister do to prevent the new free market arrangements from damaging profitability, investment and jobs in the dairy industry?

Mr. Waldegrave

Any potential reference by the Director General of Fair Trading is entirely a matter for him. I cannot give the hon. Gentleman a date for the flotation of Dairy Crest. However, he will have seen stories in the newspaper yesterday of various proposals. Many scare stories have been put about on this matter. The most obvious of them is that anything in these changes is likely to affect the price of a pint of milk on the doorstep. There is no reason for that at all. The price of liquid milk changes by less than half a penny. If we find companies—as some of them have said that they will do—putting up the price of a pint of milk on the doorstep by 3p or 4p, that is nothing to do with these changes.

Mr. Cash

Will my right hon. Friend give an absolute assurance, with regard to the disgraceful fiddling of milk quotas by the Italians, that under no circumstances whatever will we agree to the retrospective legislation proposed by the European Commission, the effect of which would be to relieve the Italians of the penalties that they have incurred? Furthermore, can he ensure that we will not withdraw the legal action in the Court of Justice, especially as the issue on which it largely turns is the insistence by the Italians that in return for all this, they will withdraw their opposition to the veto on the own-resources legislation?

Mr. Waldegrave

What really matters is bringing home to the Italians in financial terms the fact that they abused their quota position for many years and they must be made to pay for it.

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