HL Deb 03 April 1979 vol 399 cc1817-28

3.45 p.m.


My Lords, with the leave of the House, I should like to repeat a Statement which is now being made in another place by my right honour- able friend the Minister of Agriculture, Fisheries and Food. The Statement is as follows:

"With permission, Mr. Speaker, I would like to make a statement about the meeting of the Council of Ministers (Agriculture) in Brussels on 29th March at which I represented the United Kingdom.

"I made it clear that any rise in the level of common prices would hurt consumers, swell the scandalous food surpluses and increase the heavy burden which the common agricultural policy imposes on the British economy. Despite opposition from some other member countries, I stated that the Government would in no circumstances agree to increases in common prices for 1979–80. Accordingly for the time being it was agreed to extend the marketing years due to end on 31st March until 1st July, thus effectively introducing a freeze on common prices for the next three months. The Council also agreed to extend for three months the United Kingdom's current butter subsidy of about 5½9 per lb.

"The Council also took decisions on a number of important agri-monetary questions. It was agreed to introduce the EEC basket unit for CAP purposes for the period from 9th April to 30th June. The use of this more representative unit should reduce the upward pull on the values of common prices which has hitherto resulted from the use of the 'snake' unit of account. If the positive monetary compensatory amounts of strong-currency countries increase, they will be subject to a reduction of franchise of one percentage point.

"Devaluations of the green pound (by 5 per cent., as I had requested) and of the Irish, French and Italian green currencies were also agreed. The devaluation of the green pound will take effect on 9th April for pigmeat, beef, milk products, sugar and iso-glucose, and at the beginning of the 1979–80 marketing years for most other commodities. When this devaluation, which is necessary for the well-being of British agriculture and to help safeguard employment in our pigmeat processing plants, has eventually worked through into prices, it is expected to increase the retail price index by about one-fifth of one per cent.

"The Council formally endorsed the principle that the progressive reduction in existing mca's can be accelerated at the initiative of the member state concerned. This should remove future changes in the green pound from the bargaining area. Finally, the Council took note of the Commission's intention to put a vote in the appropriate management committees by 11th April certain reforms in the calculation of monetary compensatory amounts, including revised co-efficients for bacon.

"The Council also discussed compromise proposals for a common market organisation for potatoes, and some progress was made towards an outcome satisfactory to the United Kingdom."

My Lords, that concludes the Statement.

3.49 p.m.


My Lords, we are grateful to the noble Lord, Lord Strabolgi, for repeating that Statement. These Statements are never easy to understand and I think this one is probably in harmony with its predecessors in this respect. I would not wish to comment upon it in detail, other than to make just one or two points. First, as I understand it, the situation really is that the Community have agreed to a freezing of the present situation until such time as there is a new Government in power here and a new Minister—or indeed the same Minister—goes to Europe, who will have the authority of having a General Election behind him and will be in a position to negotiate from a point of view of strength. If that is so, I think it is right and appropriate that we should express our gratitude to our partners in Europe for having been prepared to accept a delay of this nature as a result of our domestic situation at home. If I am correct in this, then the situation will remain virtually the same as it is at present until July, and I am sure this is right. That really is the onus of the Statement.

I am bound to say I was disappointed in one thing, and that is seeing the word "scandalous" used in respect of food surpluses, because it is an inflammatory word. We know the Minister's own private views on our membership of the Community, and all EEC members are concerned about structural surpluses. It is a problem on which we must all corporately give our help. I cannot help thinking that it is a sad parting shot to give the impression of antagonism, by the use of such a word, to an organisation of which we are a member and in which we must have corporate responsibility.

The noble Lord, Lord Strabolgi, said that the 5 per cent. devaluation of the green pound was at the request of the Minister. Am I not right in believing that this was in fact a recommendation by the Commission? Can the noble Lord say by how much the Irish, French and Italian green currencies have been devalued? I think it entirely correct that there should have been devaluation of the green pound, because this affects the incomes, and therefore the output, of British farmers. Of course, there were those—and indeed the National Farmers' Union was one—who considered that 15 per cent. should have been the devaluation figure. We believe that 5 per cent. is too low, but we are glad that at least that has been achieved. However, my recollection is that this was not at the request of the Minister but was a recommendation by the Commission.

My Lords, the purpose of a Government Statement is to make perfectly clear to the uninitiated what the Government intend to do. I wonder whether the noble Lord will give me a little help with regard to one thing. On page 2, the Statement reads: The use of this more representative unit should reduce the upward pull on the values of common prices which has hitherto resulted from the use of the 'snake' unit of account". I am quite sure every other noble Lord knows exactly what that means, but I am afraid I have not the slightest idea. I have no doubt the noble Lord, Lord Strabolgi, knows, and if he will be kind enough to explain it to me I shall be grateful.


My Lords, we on these Benches should also like to thank the noble Lord for repeating the Statement. The decisions taken at the last council meeting certainly seem to have been satisfactory so far as they go. Certainly we on these Benches are not prepared to criticise them as such. But, while agreeing that any responsible British Minister will continue to press his colleagues to reform the existing Common Agricultural Policy, which was after all conceived some 20 years ago in totally different circumstances to those now prevailing, do the Government not agree that the chances of effecting such reforms would be greater if we did not invariably take up an intransigent nationalistic stance on the other great issues of the day?

Further, if it is true, as suggested in the Press, that the Government plan to win the coming election by hotting up popular anti-Common Market sentiment, do they not also agree that, if only to avoid the dangers inherent in any such proceeding, they should in common fairness to the electorate point out that if we left the Common Market the British taxpayer would still have to contribute at least £1,100 million annually in deficiency payments to British farmers and that our consequent large-scale purchases of food stuffs on the world market would push up prices there and thus be broadly speaking at the expense of the starving nations?


My Lords, I think it is the wish of the House that I should answer the two Front Bench spokesmen. In regard to the noble Earl's question on the timing of this three months' price freeze, we cannot say what was in the minds of our partners in agreeing to the three months, but there were doubtless several considerations. The forthcoming European Election was probably considerably more important than any consideration connected with our own General Election. The price freeze is essential because of the surpluses, which place an intolerable burden on consumers and taxpayers. Over a quarter of a million tonnes of butter are in intervention stocks, and over half a million tonnes of skimmed milk powder. For sugar the surplus is equivalent to nearly 20 weeks' consumption.

The noble Earl, Lord Ferrers, also asked about the 5 per cent. green pound devaluation. This will be of immediate help for the milk, beef, pigmeat and sugar sectors, but the later implementation for cereals will help livestock producers by delaying feed price increases. He asked me also about devaluation. For Ireland it will be 0.3 per cent., for France 5 per cent. and for Italy, 5 per cent., plus 4 per cent. later. For the United Kingdom, 5 per cent. was recommended by the Commission but the timing was left uncertain.

The noble Earl also referred to the word "scandalous", and took exception to my right honourable friend's attitude, as he saw it. As a keen European and a fairly passionate Francophile in particular, I am bound to say that being in the Common Market does not mean dewy-eyed acquiescence in every decision. What my right honourable friend is seeking to do, and is I think doing successfully, is protecting the British consumer and housewife, and indeed trying to get the best arrangements he can for all the consumers and housewives of Europe.


My Lords, is it not possible for the noble Lord to answer my question?


My Lords, the noble Lord, Lord Gladwyn, also referred to my right honourable friend's attitude which he described as intransigent. I thought the answer I gave the noble Earl also applied to his question.


My Lords, I asked another question about what their attitude would be generally speaking on Common Market matters. I do not think the noble Lord can have understood what I said?


My Lords, I do not think that arises out of this particular Statement.


My Lords, may I ask my noble friend whether it is not regrettable that a Statement should be made now on a subject which is obviously still controversial if one takes note of what the noble Earl, Lord Ferrers, said about whether it was the Commission or the Minister who achieved some success in a particular direction, and the observation by the noble Lord, Lord Gladwyn, that there has been a vast change in the course of the last 20 years? These are very controversial statements.

However, what is even more controversial in my judgment—and this is why I am asking whether my noble friend does not think it regrettable that the Statement should be made at this stage—is that nothing has been said about the mountains of sugar and butter et cetera which are apparently to be frozen. There is to be no decision as to their destination. What is to be done about them? That problem is presumably left for a future Government to deal with in negotiations with the Commission or whoever it may be on the other side of the Channel. Is it not regrettable that that should happen?

Can we debate this subject? Can we be allowed to express our opinions on this subject or are we to be content, just before an election, with a Statement and a few observations by two noble Lords on the Opposition Benches? Is that what is to happen? Finally, is my noble friend aware that I do not regard this as any achievement at all—none whatever? The decision about prices and all the problems relating to prices are as objectionable today as they have been for several years. No achievement can be claimed either by the Minister or by our Government, and certainly not by the Opposition, who indeed have accepted anything coming across the Channel without any criticism whatever and without regard to the deleterious effect on the consumers in our country.


My Lords, before the noble Lord, Lord Strabolgi, replies to those questions, may I make it clear to him, and will he accept from me, that the last comments made by the noble Lord, Lord Shinwell, about the position of the Opposition as regards this matter, are quite incorrect. Would he not agree that it was the Government of which he is a Member which renegotiated all of the terms upon which we entered the Common Market? Will he further bear in mind that, if one wishes to have negotiations—as apparently his right honourable friend the Minister does—to achieve better terms for this country, it is by far better to do it in a manner which will attract the persons with whom one is negotiating and not use either the language, the stance or the posture which his right honourable friend has been using over the past months?


My Lords, does not my noble friend agree that the question raised by the noble Earl, and the interven- tion which has just been made, mean that the Opposition think that weakness invites concessions? The French example has shown that weakness invites contempt and that is what we might have.


My Lords, first, let me reply to my noble friend Lord Shinwell. As my noble friend knows, it is not possible to have a debate before this Parliament comes to an end. On the other hand, if, in the next Parliament, I am in this position—as I hope I shall be—I shall certainly talk to my noble friend the Chief Whip and I am sure it will be possible, through the usual channels, to have a debate on these matters early in the next Parliament.

As regards the point made by the noble and learned Lord, Lord Rawlinson of Ewell, of course we blame the Conservative Government and Mr. Heath for getting us into the Common Market without adequate arrangements being made, and it was necessary for us, when we came to power, to improve the arrangements. I am grateful for what my noble friend Lord Balogh has said. My noble friend the Leader of the House is not present in the Chamber at the moment, but when he was Minister he concluded some negotiations very successfully and I would say that it is entirely due to him and our partners that we now have an adequate beef regime which we did not find we had when we came to office.


My Lords, may I bring this short discussion back to the Statement? I thank the noble Lord, Lord Strabolgi, for making the Statement, but I can assure him that silence on my part would not be weakness. I do not think that it is a satisfactory Statement for the following reasons. The Minister has quite naturally, in the prevailing circumstances, stressed throughout the importance of the consumer. The Minister of Agriculture is also the Minister for the producers and I think that as regards the type of arrangements which have come about—and we all know that there are various reasons for them—it is totally unsatisfactory for the farming community to have no knowledge of what prices are to be until the harvest is practically in. On many occasions, we used to be criticised in another place if we did not get the February Price Review through in February, which we very seldom did on either side of the House, because of the extreme importance of farmers knowing what the Government's decisions and policies were before they started planting their crops, instead of waiting until after they were harvested. Therefore, I do not think this a satisfactory situation and I merely state it for the benefit of whichever Government are in power next year.

The second small point that I should like to make is that I do not believe that the 5 per cent. devaluation is nearly enough. In view of the fact that we have had—through no fault of the Common Market, the anti-Marketeers or anybody else—about the worst winter in a farming sense that this country has had in my lifetime, I think that everyone is aware that losses in all spheres of agriculture are extremely severe. However important it is to safeguard the interest of consumers, if the farming community is allowed to go to the wall the interest of the consumers beyond 1st or 31st July, will decrease very rapidly indeed.


My Lords, the 5 per cent. devaluation raises United Kingdom support prices for CAP products by 5.3 per cent. The 15 per cent. devaluation which farming interests seek would raise our support prices by 17.6 per cent., which is excessive. This devaluation is fully consistent with the general policy set out in Farming and the Nation. That looked for moderate devaluations, each carefully judged on its merits at the time. The net product in farming in 1978 was some 5½ per cent. above the 1977 levels. Therefore, I would suggest to the noble Lord, Lord Glenkinglas, that farming is in good health.


My Lords, in accordance with the Rules of the House I shall ask a question and not make a speech from the Back-Benches. Is my noble friend aware that millions of British housewives owe a debt to my right honourable friend Mr. Silkin for the fine work that he has done in the Common Market in championing them and in championing prices? Is he further aware that those of us who stood up to our waists in water in trenches in France in 1915 defending the land of the French farmers are very disappointed indeed at the selfishness which the French farmers are now showing at the expense of British housewives?


My Lords, I shall certainly ensure that the kind remarks that my noble friend Lord Leatherland has made about my right honourable friend are passed on to him.


My Lords, may I remind my noble friend that the report of your Lordships' Select Committee on Farm Prices was, as I think my noble friend knows, to have been debated this afternoon but, for reasons which are better known to him than to most people here, that debate has had to be postponed. May I also remind him of an undertaking given by the Government that when such a report is to be debated by your Lordships, Her Majesty's Government will not take any action until your Lordships have had a chance of having that debate. Fortunately, in view of this three months' moratorium, there will be opportunity for this debate to take place. May I have my noble friend's assurance that he and his friends will at least use their best endeavours to adhere to that undertaking?


My Lords, yes. I shall certainly pass on to my right honourable friend and to my noble friend the Chief Whip what my noble friend has said.


My Lords, as the noble Lord did not reply to my question, perhaps I could reformulate it as follows. Do the Government think that if their efforts, and indeed the efforts of any British Government, to change the Common Agricultural Policy should fail, it would be better for us to get out of the Common Market?—in spite of the fact that if we did so, we should have to finance our farmers to the extent of £1,100 million and there would be the very prejudicial effect of interventing on the world market for the starving nations of the world. Do the Government believe that that is so?


My Lords, I think we are moving into a general debate and have gone rather further than questions arising from this particular Statement. In answer to the noble Lord, Lord Gladwyn, it is true that if we were not in the EEC we should have to spend money on supporting our agriculture. This would simply be an internal transfer between taxpayers and farmers. However, the cost of the CAP represents a transfer of resources out of this country to those countries which are the main beneficiaries under the CAP. That is a very different matter, as the substantial charge on our balance of payments represented by the CAP is a burden on our economy, and we are seeking to reduce it.

We have now spent 26 minutes on this Statement and, perhaps wearing another cap, might I say that it would be for the convenience of the House to pass on to other business.


My Lords, although I defer totally to the noble Lord, can he say whether he is in a position to answer the question which I asked him about the interpretation of that part of the Statement which I found totally incomprehensible? I do not want to put the noble Lord on the spot. If he cannot do that—and I do not mean this in a derogatory fashion at all, but I fancy that he will find great difficulty in so doing—will he be good enough to do two things. Will he, first, write to me telling me what it means and, secondly, invite the people who draft these Statements to do so in a way which is more readily comprehensible than is the Statement before us today?


My Lords, is the noble Earl asking me about the basket?


My Lords, not just the basket, but the passage that followed after the basket, which states: The use of this more representative unit should reduce the upward pull on the values of common prices which have hitherto resulted from the use of the Snake unit of account".


My Lords, on 13th December last Parliament urged the Government to press for the adoption of a more representative unit of account in agriculture. The ECU, which is the European Currency Unit, which is based on a basket—which, I am told, is a sum of defined amounts for each EEC currency, of all the EEC currencies—should provide such a unit. Towards the end of last year it was quite clear that the Council agreement to the introduction of the ECU could be reached only if the charge was made on a neutral basis. No other course was, therefore, a realistic alternative. If there is anything on which I have not answered the noble Earl, I shall also write to him. I think that it would be the wish of the House—it is certainly my wish—that we should now pass on to other business.