HL Deb 11 March 1987 vol 485 cc1045-7
Lord Mottistone

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what action they are taking to resist the threatened imposition of a punitive EC tax on oils and fats, in view of the fact that the Select Committee on the European Committees of this House has strongly recom-mended against such a tax. (11th Report, Session 1983–84)

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, Her Majesty's Government have made their views known to the Commission. We shall resist the recently-announced Commission proposal for an oils and fats tax as we did the 1983 proposal for the well-argued reasons made by the Select Committee at that time.

Lord Mottistone

My Lords, would my noble friend not agree that the proposals this time are even more stringent than they were in 1983? Therefore, the rejection by your Lordships' Select Committee is even more validated and even more important?

Lord Belstead

My Lords, I am not quite sure whether they are more stringent. They are equally repugnant. My noble friend has touched on an extremely important point. This proposal would raise the price of a raw material essential for many processed foods by approximately 100 per cent.

Lord Gallacher

My Lords, will the Minister accept the assurance that we, on this side of the House, welcome the Answer which he has given to his noble friend? Will he also ask his right honourable friend the Minister, in opposing the proposal, to remind the officials of the Commission that one of the three objectives of the common agricultural policy is the maintenance of fair prices to consumers and that this proposal completely contradicts that objective? Will the Minister further advise his right honourable friend to say to the commissioners that the proposition of financing surpluses in other respects out of a levy on oils and fats is totally inimicable to the objectives of the common agricultural policy?

Lord Belstead

My Lords, I agree entirely with what the noble Lord, Lord Gallacher has said. The noble Lord is, I think, saying that this is not the right approach, and the Government most certainly agree with that view. We believe that support costs should be reduced and that revenue should not be raised by taxing the consumer.

Lord Broxbourne

My Lords, will my noble friend say whether any question of vires arises in this matter, and if so, whether any reference to the European Court of Justice is contemplated?

Lord Belstead

My Lords, I am not aware that any question of vires arises so far as this is concerned, except that it is the fact that all imports of soya oil into the Community are bound in the GATT. As regards that, I suppose there might be a question of vires. If there is, we shall most certainly seize upon it and argue it extremely strenuously.

Lord Bruce of Donington

My Lords, can the noble Lord inform the House whether, in the event of the proposal reaching council level, Her Majesty's Government stand the risk of being overruled by a qualified majority?

Lord Belstead

My Lords, this will be decided, if it has to be so decided, by qualified majority.

Lord Elton

My Lords, will the Minister confirm whether it is the case, as I have heard rumoured that the value of the tax in respect of palm oil may exceed the value of the palm oil itself? If that is so, will he impress upon his colleagues the terrible effect that this tax is likely to have on third world suppliers, particu-larly friends within the Commonweath, such as Malaysia.

Lord Belstead

My Lords, I would most certainly confirm what my noble friend has said so far as concerns the second part of his question. So far as concerns the first part, the cost of oil will just about double. What effect that would have on individual countries I am not sure. But, in general terms, my noble friend is absolutely right. In addition to the United States, many developing countries, including small developing countries, would be seriously affected by such a tax.

Lord Sainsbury

My Lords, may I, on behalf of noble Lords on these Benches, welcome most strongly the Minister's statement? As I am sure he is well aware, this tax would affect the lower income groups, when one considers that the price of margarine, which is dependent upon vegetable oils for its manufacture, is one-quarter of the price of the cheapest butter. The cheapest margarine is one-quarter of the price of the cheapest butter.

Lord Belstead

My Lords, I am grateful to the noble Lord, Lord Sainsbury. Not surprisingly, I could not have put it better myself.

Lord Harmar-Nicholls

My Lords, is this not a good example of how something we do not like and do not want could have been resisted if we had not given up the veto in favour of the qualified majority?

Lord Belstead

My Lords, I understand the thrust of my noble friend's question; but this is something we have resisted. We have resisted it successfully over quite a few years. As my noble friend Lord Mottistone reminded me in his Question, this all stems from a very robust recommendation by the Select Committee of your Lordships' House in 1983 that this was a tax which would not be to the advantage of anybody in particular. As a result of that, Her Majesty's Government have always opposed the tax, and this we shall continue to do.

Lord Rea

My Lords, would the Government's case in resisting the tax be strengthened by pointing out the important health implications which would come from increasing the price of these fats and oils? Is the Minister aware that a large number of these oils are rich in polyunsaturated fatty acids which are protective against heart diseases and that their increased consumption was recommended by COMA, the Committee on Medical Aspects of Food Policy, three years ago.

Lord Belstead

My Lords, I am grateful to the noble Lord for giving a professional view of the matter. From the point of view of the Government, I would add this. if I may. I think consumers should be given the opportunity to eat sensibly taking into account the best dietary advice. By increasing the price of vegetable and fish oils by a tax of this kind, the consumer's choice would be restricted in a very important area of diet.

Lord Diamond

My Lords, can the Minister possibly tell us the opinion of the other member countries of the EC on this issue?

Lord Belstead

My Lords, variations of this proposal have been discussed—I said for the last few years but in fact it is over about the last 20 years. In 1983, when there had to be a decision—although there were discussions subsequently—the United Kingdom, Germany, Denmark and the Netherlands prevented the adoption. I understand that on this occasion, Portugal is indicating that it would also be opposed.

Lord Mottistone

My Lords, will my noble friend tell us when he next thinks that this matter will come before the Council of Agriculture Ministers?

Lord Belstead

My Lords, I keep hoping that it will not come before the Council of Agriculture Ministers. It is part of the price fixing. The next Agriculture Council will be held in the near future. As I have tried to show my noble friend in answer to all the questions, we shall consistently oppose the case for this tax.

Lord Leatherland

My Lords, will the Minister tell us whether a calculation has been made by the Government on the extent to which this tax, will put up prices in fish and chip shops?

Lord Belstead

My Lords, we have not done so, but it will apply of course to the price of fish and chips. To that extent the noble Lord has made a good point.

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