§ 3.18 p.m.
§ LORD BESWICK
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government to what extent they have supported the proposal to sell E.E.C. surplus butter to the U.S.S.R.
My Lords, we abstained in the voting of the Management Committee which advises the Commission.
§ LORD BESWICK
My Lords, is the noble Earl aware that when I put this Question down one week ago I fully expected the Answer to be that Her Majesty's Government had not approved the deal? Is he now confirming that not only did we not oppose it but we did not even consider it important enough to be considered by the Council of Ministers? If that is so, how does he reconcile this with all the pledges which were given during the passage of the E.E.C. Bill about Parliamentary control in this country?
My Lords, as my right honourable friend the Prime Minister made clear in another place, this is a major part of a surplus stock which was built up before we became a member of the Community and which was purchased by the then Six members of the Community. We did not think that we were entitled to stand in the way of this disposal.
§ LORD BESWICK
My Lords, if Her Majesty's Government think this is nothing to do with this country, why did we agree to pay 8¾ per cent. of the cost, which amounts to £110 million?
My Lords, I did not say it was nothing to do with this country. The problem there is what has been described as a "mountain of butter", and it is in the interests of the Community, of which we are members, that this "mountain" should be dispersed.
§ LORD BESWICK
My Lords, if the difficulty is in disposing of the "mountain 769 of butter", would it not be much more simple to return to the principle of a deficiency payment and make the butter available for the housewives of this country? Would the noble Earl confirm that many housewives in this country would be willing to buy more butter if they could afford it?
My Lords, we have accepted the principle of a Common Agricultural Policy. We recognise that there are strengths in this and also weaknesses. This is clearly one of the weaknesses. It is our intention to use our influence to make sure that these weaknesses do not occur in the future.
§ LORD PEDDIE
My Lords, referring to this "mountain of butter", may I ask the noble Earl what proportion of the mountain that has been exported to Russia constitutes the total production of butter in the E.E.C.? Secondly, may I ask whether or not, following this surplus, there will be a planned contraction in the production of butter in the E.E.C., and if there be any consequential shortages will that involve an increase in future prices?
My Lords, I can tell the noble Lord, Lord Peddie, that this is about 200,000 tons of butter and there are 275,000 tons of butter in intervention by the E.E.C. I cannot tell him the proportion of the total production of the E.E.C. I would assure the noble Lord that it has been the intention of my right honourable friend—and indeed he has been doing this for the last few days—to urge that there should be a reduction in the intervention price of butter.
My Lords, before the matter is disposed of, and if the Russians are to get this butter, will the noble Earl point out that some of this butter should be given to the very many prisoners in Russia who are being held at present on starvation rations, so that at least we shall not be responsible for depriving them of some kind of subsistence?
My Lords, this is a direct commercial sale, and what Russia does with the butter that she purchases is of course up to that country.
THE EARL OF SELKIRK
My Lords, can the noble Earl say whether any representation has been made by New Zealand and whether butter is being sold to any other places which are normally to be regarded as New Zealand export markets?
My Lords, I am not aware of any representations being made from New Zealand. To my knowledge, this is the only sale of butter of this type which has taken place.
§ LORD SHINWELL
My Lords, may I ask the noble Earl, if this important transaction was known to the Government before we decided to enter the Common Market—before the accession date—why it was never mentioned in the course of our debates? What was the reason for the concealment?
My Lords, the forthcoming sale was not known before we joined the European Economic Community and the butter has accumulated since last September.
§ LORD HARVEY OF PRESTBURY
My Lords, can my noble friend give an assurance that neither Russia nor any other Iron Curtain country will re-export this butter to anywhere in Europe, or elsewhere?
My Lords, I can give my noble friend the assurance that it is a condition of the sale that the butter shall not leave Russia.
§ LORD BESWICK
My Lords, as it is a condition of sale that this particular butter should not be re-exported, can the noble Earl give an equally firm assurance that the receipt of this enormous quantity of butter by Russia will not release other stores from the Iron Curtain countries which may well compete with New Zealand in other markets?
My Lords, I cannot give the noble Lord any assurance as to what the effect of this butter will be, either inside or outside Russia. It is a direct commercial sale that is about to take place.
§ LORD NUGENT OF GUILDFORD
My Lords, can my noble friend say whether there is any prospect that this sale may give the Russians a taste for butter instead of guns?
§ LORD HANKEY
My Lords, as butter nonsenses of this sort occur with pretty unfailing regularity every five years, and really constitute a world problem, and as the same thing applies with eggs, though at a different period, will the Government institute an inquiry through O.E.C.D. to see whether some economic solution cannot be found consistent with each member's agricultural policy?
My Lords, of course this matter is of major concern and it is proposed under the European Economic Community that the intervention price for butter should be decreased. We are anxious to see that the intervention price for butter should be decreased and that the price of skimmed milk, which is also affected, should be held steady. This is a matter of great concern. Nobody in the European Economic Community wishes to see surpluses and we are anxious to use our influence to ensure that these surpluses do not come about in the future. That is precisely what my right honourable friend has been doing during these few days in Luxembourg.
My Lords, what is desired to be done is to stimulate the demand for butter, and that is done by decreasing the intervention price. With regard to the second question asked by the noble Lord, Lord Hoy, the intervention price for butter may go up on May I in this country as part of the six transitional steps, but this has yet to be decided.
§ LORD CONESFORD
My Lords, has it not occurred to any Continental economist that a good use for butter is to eat it, rather than to produce it for sale at a loss?
My Lords, I have no doubt that it has, and that is the reason why we wish to see the demand for butter on the Continent stimulated by lowering the intervention price. That is 772 what my right honourable friend has been urging.
My Lords, may I ask for what length of time this 200,000 tons of butter could be kept in store and, as a supplementary to that question, may I ask that after it had been stored for a certain length of time it should be destroyed?
My Lords, I cannot tell the noble Lord, Lord Nunburnholme, how long it can be kept in store, but I can tell him that if in fact this butter had been kept in store for very much longer it would have resulted in an even larger loss to the Community as a whole than has happened as the result of the sale.