Wool Guarantee (Hansard, 14 December 1992)

§ Mr. Macdonald
To ask the Secretary of State for Scotland if he will delay the removal of the wool price guarantee until 1995.

§ Sir Hector Monro
No. Our decision to terminate the wool guarantee was taken in 1988, following consultation with the industry. We concluded that such direct involvement in the wool market was no longer appropriate in the face of European Community support measures under the common agricultural policy. The wool industry has had several years in which to prepare for the termination of the wool guarantee and should now be ready to accept financial responsibility for is own affairs.

§ Mr. Wilson
To ask the Secretary of State for Scotland what was the cost of maintaining the wool price guarantee(a) in Scotland as a whole and (b) in the less favoured areas of Scotland in each of the past five years.

§ Sir Hector Monro
The information is not available in the form requested. The wool guarantee is designed to operate as a price stabilisation mechanism on the basis of advances to, or receipts from, the British Wool Marketing Board. For the United Kingdom as a whole, nett expenditure (or nett receipts) in each of the past five years was as shown.

£ million

1987–88 (1.9)

1988–89 (3.3)

1989–90 2.2

1990–91 18.2

1991–92 40.8

§ Mr. Wilson
To ask the Secretary of State for Scotland if he will make it his policy to retain the wool price guarantee after 1 May 1993.

§ Sir Hector Monro
No. Our decision to terminate the wool guarantee was taken in 1988, following consultation with the industry. We concluded that such direct involvement in the wool market was no longer appropriate in the face of European Community support measures under the common agricultural policy. The wool industry has had several years in which to prepare for the termination of the wool guarantee and should now be ready to accept financial responsibility for its own affairs.

§ Mr. Wilson
To ask the Secretary of State for Scotland what representations he has received on the importance of the wool price guarantee to Scottish producers; and if he will make a statement.
79W

§ Sir Hector Monro
I have received representations about the ending of the wool guarantee from several hon. Members.
The effect of ending the guarantee will vary between producers but, on average the return from wool amounts to only about 5 per cent. of total producer returns. Sheep farmers will continue to receive very substantial Government support through ewe premium and hill livestock compensatory allowances. Scottish producers currently benefit by over £90 million in direct subsidies from these sources.

	£ million
1987–88	(1.9)
1988–89	(3.3)
1989–90	2.2
1990–91	18.2
1991–92	40.8