GATT: Sugar Regime (Hansard, 18 January 1994)

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe)
My Lords, GATT requires cuts in internal support, in tariff and equivalent measures against imports and in the volume and value of subsidised exports of sugar. The Commission is to make proposals to achieve the necessary targets, but consideration has yet to be given to the desired balance between measures affecting volume and price.

§ Lord Mottistone
My Lords, I thank my noble friend for his Answer to the Question. I must declare an interest. I was sorry to read in an Answer that my noble friend gave to a Written Question last week that the sugar regime is to be rolled over for another year. Does my noble friend agree that the delay in bringing the sugar regime up to date has been disgraceful over the past few years? Does he also agree that it is particularly important, when the matters about which he spoke come to be discussed, that it is price reduction upon which there should be concentration?

Earl Howe
My Lords, my noble friend is right. The Council agreed in December to a further roll-over of the current sugar regime until 30th June 1995. We were disappointed at yet another roll-over, but it was understandable, in part, given the timing of the GATT conclusion. We shall press the Commission to address urgently the long-delayed reform of the regime and the measures necessary to implement the GATT deal.

§ Lord Carter
My Lords, as the existing UK sugar quota provides for only half of our domestic sugar consumption, while France, Belgium, and Denmark, for example, have quotas which are twice their domestic consumption, will the Minister assure the House that the Government will firmly resist any proposals to reduce the UK sugar quota after the GATT settlement?

Earl Howe
My Lords, I can give the noble Lord the assurance that we shall do everything in our power to resist that. The EC's subsidised exports, as a whole, have to be reduced, but we see no justification for a cut in the UK quota. The UK is about self-sufficient in sugar: half of it comes from beet and the other half from cane. We are not causing problems on world markets and the focus of attention should therefore rest elsewhere in the Community.

Lord Bruce of Donington
My Lords, will the noble Earl give the House an indication as to how the Government propose to bring pressure to bear upon the Commission? What ability have they to bring pressure to bear on the Commission?

Earl Howe
My Lords, much in the same way as we have done in the past with great success in many areas. The changes that we want to see can be summarised very simply: a substantial cut in prices, which is a priority; reduced production, but as I have just said not at the expense of the UK; and proper integration of the arrangements for beet and cane. We also want a number of technical changes and ultimately the abandonment of quotas.

§ Lord Mackie of Benshie
My Lords, the noble Earl said in reply to his noble friend that he agrees that a price reduction is important. Can he say what suffering there is among the manufacturers of sweets? Are they roaming the streets applying for relief, or anything like that?

Earl Howe
My Lords, it is perhaps for the manufacturers of sweets to answer for their own performance. We have long and consistently argued for a price cut in sugar. EC sugar support is out of line with that for other sectors. The regime should be reformed as rigorously as other parts of the CAP, not least to bring about some benefit to consumers but also to bring about a better balance in the arable sector as a whole.

§ Lord Monkswell
My Lords, in response to a supplementary question the Minister said that Britain was self-sufficient in sugar, and then said that half was from sugar beet and half from sugar cane. Can he explain to the House where in Britain sugar cane is harvested?

Earl Howe
My Lords, the Community has an agreement under the Lomé Convention with ACP countries for the import of sugar cane. Those arrangements were built into the sugar regime some years ago. It so happens that about 85 per cent. of the sugar cane imported into the Community comes into the UK and is refined here.

§ Lord Dormand of Easington
My Lords, under the arrangements which are now being made, what are the Government doing to safeguard the interests of those Commonwealth countries which produce sugar?

Earl Howe
My Lords, as I have just said, the Commonwealth countries with which we have an agreement under the Lomé Convention will be protected under that sugar protocol. It is not a matter that the 449 GATT deal can affect in any way. However, there may be changes in the price arrangements which will obviously have to be negotiated with the ACP countries, but not in terms of the volume which we are committed to taking.

§ Lord Dormand of Easington
My Lords, perhaps the noble Earl will forgive me, but there appears to be a contradiction there. The Minister said that we would not be affected in any way and then went on to say that the price might be affected. That is a very important aspect of the agreement.

Earl Howe
My Lords, I should like to qualify what I said. I think that I did so, but I should not have said "in any way". There may well be changes to the price of sugar, as the noble Lord is aware, but not to the volume.