HL Deb 21 November 1979 vol 403 cc111-4

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 how much butter has been sold at a subsidised price to the USSR by the European Community during the current year; what has been the cost to the Community of these transactions; and whether this practice has now been stopped.


My Lords, the Commission's provisional estimate of such sales for the first six months of 1979 is 66,308 tonnes. The cost to the Community resulting from the payment of export restitutions would be about £76 million. My right honourable friend the Minister of Agriculture, Fisheries and Food protested strongly in the Council of Ministers about cheap sales of butter to the Soviet Union, but there was no support in the Council for a ban on such sales.


My Lords, while thanking my noble friend for that reply, may I ask him why, if it be necessary to produce in the Community more butter than can be sold at an economic price, it is necessary to sell this butter at subsidised prices to Russia with the consequence that they have of course more resources available for guns? Would it not be better, if this butter has to be disposed of, that it should go to the victims of Communist imperialism in Kampuchea?


My Lords, my right honourable friend was most anxious to see that my noble friend's first point was met; in other words, that there should not be surpluses created. The only way in which you cannot create a surplus, it appears, is to lower the price. So he is trying to do that. He also expressed great concern to the Council of Ministers that, at a time when there could be a military build-up in Russia, the European Community should be selling subsidised butter to Russia.


My Lords, would my noble friend add to that answer by telling the House what were the arguments which his right honourable friend's European colleagues used for this quite extraordinary decision as to the disposal of the butter to Russia?


My Lords, the discussions at the Council of Ministers are of a confidential nature and I could not tell my noble friend what were the arguments used. But I will tell him this: if there is a surplus of butter, then that has to be disposed of throughout the world. It is a trading matter to dispose of it. The fact is that the Council of Ministers did not agree that there should be a ban on all sales to Russia.


My Lords, is the noble Earl aware that butter prices in Britain are increasing every week, and that the situation is becoming so absolutely intolerable that it is sending housewives frantic? Is it not time that the Government did something about it so far as consumer protection is concerned?


My Lords, the subsidy which all butter in the United Kingdom attracts at the moment from European funds is 12p per pound, which is the highest subsidy that has ever been attracted, and it is the result of my right honourable friend's negotiations this year. The noble Lord shakes his head, but it is actually a fact.


My Lords, that may be so, but it is no consolation to the housewife who is putting up with increasing prices all the way round.


My Lords, the noble Lord says: "Why do not the Government do something about it?" I was trying to tell him that the Government have done something about it which his Government did not do.


My Lords, the Minister of State quoted the subsidy provided to British housewives on a pound of butter. Is not that rather less than is provided in subsidy for butter sold to the Russians?


My Lords, the export subsidy on all butter which goes abroad is very considerably greater, but that is because it is going abroad.


My Lords, may I ask what has happened to all those jibes that we had in the last Session about good Europeans, and all the accusations that on this side we were bad Europeans? If the Government are such good Europeans why do they not do something about the cost of butter?


My Lords, this Government are extremely concerned that they are good Europeans. What we wish to do is to see Europe as a whole proceed and be successful. Butter is extremely important, but there are very many more far-reaching things than butter to be considered.


My Lords, would my noble friend continue to press Mr. Peter Walker, the Minister responsible, that he follows up and suggests that, instead of continuing exporting artificially cheap butter to Russia, we stop it and send it to the Third World countries which are desperately in need of nutritious foodstuffs? On the domestic front, would he put forward the argument that we might take the butter at the same price as Russia pays for it and, as a special instance, distribute it among the old-age pensioners of this country?


My Lords, my right honourable friend is concerned and has pressed his colleagues in the Council of Ministers that there should be fewer surpluses of butter. This is the prime move to start with. He is also concerned to see, where possible—and he has asked them to do this—that more subsidised butter should be available within the Community. The fact is that if there is a surplus the only way to get the market right is to dispose of the surplus.


My Lords, the noble Earl just referred to a "good European". How does one define a good European? Is a good European somebody who provides Russia with butter at the lowest possible price, one who contributes more to the EEC than any other country in the Nine, or one who refuses to take our lamb? Is that how one defines a "good European "?


My Lords, the definition of a good European might be similar to that of a clever politician: it is up to the individual concerned to make his own choice.


My Lords, is the noble Earl aware that the good old English cream butter is no longer available, and that nowadays you cannot tell butter from margarine?


My Lords, that seems to be an argument in favour of the margarine manufacturers, but I can assure the noble Lord that there has been an increase in the production of British butter.


My Lords, if we are to supply our butter at ridiculously low prices to the Soviet Union, could there not be a quid quo pro whereby we get caviar from the Soviet Union at similarly ridiculously low prices?


My Lords, that, of course, is a matter for the traders; and those who trade between the European Community and Russia might well take on board the noble Lord's advice, but I do not know whether they would be successful.

The LORD PRESIDENT of the COUNCIL (Lord Soames)

My Lords, I think perhaps after that singularly appropriate supplementary, we might move on to the next Question.

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