HL Deb 17 March 1971 vol 316 cc464-6

3.50 p.m.


My Lords, I apologise for interrupting this interesting and important debate (and I apologise particularly to the noble Lord, Lord Rosenheim, who is about to make his maiden speech; I hope that I shall not delay him unduly), but I should like now to repeat to your Lordships a Statement on the Agricultural Price Review. The White Paper is available in the Printed Paper Office. The Statement is as follows:

"The increase in production costs since last year's Annual Review has been bigger than ever before, due partly to inflation and partly to higher imported raw material prices. Rising productivity cannot cover such cost increases. If we are to get the expansion we want in the future, they must be met partly through the price the consumer pays and partly in the Exchequer liability for direct support. Our commodity determinations this year provide in this way for costs to be fully met. So the gains secured through greater productivity will be available to the industry to help both income and investment.

"Before outlining the determinations, I must make it quite clear that they represent changes in the guarantees set a year ago. They therefore include the increases made in October, 1970. The main changes compared with the 1970 Review are increases of 12p per cwt. for wheat, 10p for barley and 5p for oats; 67½p per ton for potatoes and 77½p for sugar beet; £1.22½p per cwt. for cattle, 2½p per gallon for milk, 7p per score for pigs, 2.8p per lb. for sheep, together with ½p more for wool and continuation of the extra increases in the hill sheep subsidy. As announced at the time, the temporary increase in the fertiliser and lime subsidy made at the last Review for one year only will end.

"On eggs we are moving to a free market and the guarantee will be reduced again this year. We are, however, raising minimum import prices significantly in the light of increased production costs. On milk we have proposed a big increase in the guarantee. Levy arrangements will in addition strengthen the price of milk for manufacture and so firm up the pool price. This is necessary in face of a very steep rise in costs. The retail price will have to go up by ½p in July in consequence. We have also taken into account the reduction in the standard quantity. In addition, we are offering substantially higher incentives to encourage still further the good progress made on brucellosis eradication. I am announcing to-day arrangements to start area eradication.

"In conventional Review terms the total increase in the value of the guarantees is about £138 million over the levels determined in March last year. This includes the adjustments to the guarantees made last October.

"These determinations have been made in the knowledge that we shall be changing the basic method of agricultural support. After intensive negotiations with overseas suppliers, we have now secured the necessary agreement to enable us to introduce interim levy schemes covering cereals, beef and veal, mutton and lamb and minor milk products from the beginning of July. I am circulating information about this in the OFFICIAL REPORT and making copies available in the Library now. Fuller details will be announced as soon as all the discussions are completed, and the necessary Orders will be laid before Parliament. These schemes will introduce a much-needed limitation on Exchequer liability. With the new policy, changes foreshadowed by the approach we have taken this year will be made in the concepts and procedures of the Annual Review.

"The Review and the determinations must be seen against this background. Our decisions fully cover cost increases on major commodities. They aim to maintain a proper commodity balance and provide substantial extra resources for sheep. In the present economic situation it would have been wrong to go further than this. I am sure these decisions will restore confidence in the industry and enable it to move ahead both on output and productivity."

Following is the information referred to: