§ 2.38 p.m.
§ Lord O'HAGANMy 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 how far membership of the EEC is responsible for the rise in food prices.
§ Lord STRABOLGIMy Lords, because of the difficulty of predicting how prices for both imports and domestic products would have changed if we had remained outside the EEC, it is not possible to estimate the part which membership of the Community may have played in the rise in food prices.
§ Lord O'HAGANMy Lords, could the noble Lord tell the House whether that means that the Government do not know, or does it mean that they now accept that the major reasons for the rise in food prices arise from causes outside the Common Agricultural Policy of the EEC?
§ Lord STRABOLGIMy Lords, it is very difficult to make accurate calculations on hypotheses. It is not possible to assess realistically the prices we might have to pay for food if we were outside the EEC. It is true that we might be able to buy consignments of food more cheaply from time to time, but we could not dictate the conditions on which supplies would be available in the longer term. We cannot judge the effect on prices if the United Kingdom were to enter the world market as a major purchaser.
§ Lord DAVIES of LEEKMy Lords, is my noble friend aware that if this Question were asked next January, when we have to feel the crunch entirely of increased Common Market prices, then there would be no doubt about the Answer? So why try to concoct a defence? Furthermore, may I ask my noble friend whether he is aware that the Lord's Prayer has 56 words, the Ten Commandments 297, the Declaration of Independence 300, but the Common Market Directive for the export of duck eggs has 26,911 words? Is not that the kind of thing that counts?
§ Lord STRABOLGIMy Lords, in answer to my noble friend, I think that the best thing I can do is to remind your Lordships that Mr. Jenkins, the Commissioner, recently said in public in a speech in this country, that since the begining of Phase 2 the United Kingdom food price index as a whole went up by 18 per cent. but products covered by the CAP by only about 9 per cent. on average. I find it difficult to comment on those estimates because I do not have the underlying calculations, but they are one estimate.
§ Lord SAINSBURYMy Lords, will not my noble friend agree that we do not, and cannot, grow tea in this country, we do not grow coffee, we do not grow cocoa, we do not grow soya beans, all of which are dependent on world prices and which no Government, either the present Government or a Conservative Government can control; that no Government is responsible for drought, and that it would be good for the country if members of political Parties did not play this dishonest price game?
§ Lord STRABOLGIMy Lords, I agree absolutely with what my noble friend, with unrivalled experience of these matters, has said. In fact, he has put it much better than I could have done.
Lord CAMPBELL of CROYMy Lords, following what the noble Lord said, quoting from Mr. Roy Jenkins, and following what was stated by the noble Lord, Lord Sainsbury, may I ask the Government to go further and make it clear that it is the steep fall in the value of the pound which has also made foodstuffs coming from outside the Common Market very expensive?
§ Lord STRABOLGIYes, my Lords. That, of course, is one of the factors, and the withdrawal of consumer subsidies is another.
§ Lord BLYTONMy Lords, is my noble friend aware that the price of vegetables coming from the Common Market this summer has been phenomenal, and that if the housewives had a chance to vote again they would vote to come out of the Common Market?
§ Lord STRABOLGII am not sure that that is necessarily so, my Lords. I usually agree with my noble friend, but on this matter I am afraid I do not. The recent CAP price settlement has of course had a effect on food prices, which have been kept to the minimum, and the cost of the green pound devaluation has been more than offset by the butter subsidy. In the period to April 1978, it is estimated that the settlement, with the transitional steps, will add about 1¼ per cent. to average food prices.
§ Lord BARNBYMy Lords, considering the variations in opinions that exist on this matter, and looking at my noble friend's Question as it affects meat, may I ask the Minister to recognise the variations that have occurred in the prices of beef and pigmeat in recent weeks? May I ask him to put in the Library graphs to show the variations of prices of beef and pig-meat over the last 18 months? May I further ask him to confirm that there are now around 30,000 tons of beef in cold storage in this country, and that, according to our Meat Marketing Board, intervention beef is coming into the country at 10p per pound less than the market price of fresh meat? Would he agree that that represents a loss to somebody of approximately £100 million?
§ Lord STRABOLGIMy Lords, in regard to beef, our premium system with intervention only as a fall-back will be continued not merely until July, as the Commission originally proposed, but for the whole of 1977 to 1978. We are confident that agreement will be reached in the course of the year that the premium system be retained permanently; I agree with the noble Lord that it is vastly better than intervention. The question of pig-meat has been complicated somewhat by the European Court of Justice, which 1165 ordered on Saturday that we should stop forthwith the temporary subsidy for pig-meat which we have been paying since January. I can tell the House that we are examining the implications of the Court's decision, and that my right honourable friend the Minister of Agriculture is discussing the new situation with Mr. Gundelach, the Commissioner responsible for agriculture, who is at present in this country.
§ Lord SHINWELLMy Lords, we are frequently being told that there is a higher standard of living in most of the countries of the Nine. Thus, the higher the standard of living the greater the demand on available production. Is that not one of the reasons for the higher cost of food and other commodities? Is it difficult for the Government to form an estimate?
§ Lord STRABOLGISo many factors influence food prices, my Lords—variations in domestic and international supplies, the value of sterling and inflation of domestic costs including manufacturing and distribution costs—that it is quite impossible to isolate any one thread, for example membership of the Community, as my noble friend implies, and to assess the effect. It is doubly difficult in the case of membership of the Community because we cannot begin to make estimates without making assumptions about how we and other countries would be operating if we were not in the EEC.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, is not this ghastly flummery about this continued King Charles's head a horrible waste of time, and ought we not to get on to the next Question?
Baroness VICKERSMy Lords, I am grateful to the noble and learned Lord, Lord Hailsham of Saint Marylebone, for that suggestion.