HC Deb 09 May 1972 vol 836 cc320-4W
83. Mr. Arthur Lewis

asked the Minister of Agriculture, Fisheries and Food (1) whether he is aware that in February, 1972 the price of sugar in Belgium was 7.5p per lb. as against 4.4p per lb. in the United Kingdom as at March, 1972; to what extent value added tax is paid on Belgian sugar; and whether, on Great Britain's entry into the European Economic Community, this country will be able to maintain the price of sugar at 4.4p per lb. without value added tax and without reference to the countries of the enlarged Ten;

(2) whether he is aware that in January, 1972, the price of sugar in France was 6.0p per lb. as against 4.4p per lb. in the United Kingdom as at March, 1972; and to what extent value added tax is paid in France on sugar;

(3) whether he is aware that in January, 1972, the price of sugar in Germany was 6.5p per lb. as against 4.4p per lb. in the United Kingdom as at March, 1972; and to what extent value added tax is paid in Germany on sugar;

(4) whether he is aware that in October, 1971, the price of sugar in Italy was 7.5p a lb. as against 4.4p a lb. in the United Kingdom as at March, 1972; what was the price in Italy in March, 1972; and to what extent value added tax is paid in Italy on sugar;

(5) whether he is aware that in February, 1972, the price of sugar in the Netherlands was 7.5p a lb. as against 4.4p a lb, in the United Kingdom as at March, 1972; and to what extent value added tax is paid in the Netherlands on sugar;

(6) having regard to the special measures which he has taken to restrict the increase in the price of sugar for the remainder of 1972 to less than a third of the increase which would have had to be met by consumers had such action not been taken, to what extent, on Great Britain's entry into the European Economic Community, he will be enabled to take such action without reporting to, and obtaining the approval of, the countries of the Ten.

Mr. Anthony Stodart

Value added tax is paid on sugar in the member States of the present Community at the following rates:

Country VAT
per cent.
Belgium/Luxembourg 6.0
France 7.5
Germany 5.5
Netherlands 4.0

Value added tax is not yet in operation in Italy. Information on the price of sugar in Italy in March, 1972, is not available. Under the terms of the Finance Bill value added tax will not apply to foodstuffs intended for human consumption in the United Kingdom. Although the member States of the EEC have agreed to adopt a common system of VAT, they have not yet agreed on the harmonisation of rates or coverage. As a member of the Community, the United Kingdom will play a full part in discussions on harmonisation, any decision on which must be a unanimous one, according to Article 99 of the Treaty of Rome. The price of sugar in the United Kingdom after accession will be determined in accordance with Article 51 of the Treaty of Accession, taking into account the level of market prices ruling in the United Kingdom prior to accession.

Mr. Charles Morrison

asked the Minister of Agriculture, Fisheries and Food if he will make a make a statement on the intervention arrangements for cereals which will come into operation for the United Kingdom.

81. Mr. Wolrige-Gordon

asked the Minister of Agriculture, Fisheries and Food if he intends to authorise the use of a minimum parcel of 80 metric tons for the intervention buying of cereals in Scotland under European Economic Community regulations.

Mr. Anthony Stodart

The Treaty of Accession to the European Communities, and the related decision of the Council of the European Communities, Cmnd. 4862, provides that the common agricultural policy shall be applied by the acceding States from 1st February, 1973. The Agriculture Ministers fully recognise the importance of reaching early decisions in the cereals sector as being one where a considerable proportion of trade is done on a forward basis and one to which various features of the common agricultural policy—for example, denaturing—will have to apply from the outset. For some time the Agriculture Departments have been planning the necessary arrangements, many of which of course depend upon the passage of the appropriate legislation.

These arrangements fall into two broad categories: (a) Those that depend on decisions taken by the institutions of the Community. These include intervention prices, the siting of intervention centres, compensatory amounts on cereals and processed cereal products and the premium to be paid on denaturing.

(b) Those that are left to the decision of the United Kingdom authorities within the terms of the relevant Community regulations: for example, subject to the passage of the necessary legislation, the allocation of responsibilities respectively between the Agriculture Ministers, the Intervention Board for Agricultural Produce and any agency bodies; and those involving the minimum quantities and standards of grain sold to the Intervention Board or its agent.

In approaching questions in the first category Agriculture Ministers have a number of objectives in mind. Clearly it would be necessary to preserve the normal and basic patterns of trade in the United Kingdom, although it is recognised that as part of the enlarged Community some changes would be expected to come about. Although support buying is an important feature of the Community's intervention system, it should not be regarded as designed to replace normal and improved systems of marketing. The importance of these was emphasised in the recent Annual Review White Paper.

Although the growing of cereals is important, the United Kingdom is primarily a livestock producing country. Under the Community system there would have to be facilities for denaturing in order to handle the heavy volume of wheat traditionally going for animal feed.

Proposals affecting these aspects of the common agricultural policy that involve Community decisions in the cereals sector have already been submitted to the European Commission as the first step in the process of seeking the decisions needed. The Agriculture Ministers are well aware of the importance to the grain trade of forward contracting, which must be based on estimates of price movements. They accept, therefore, the need to provide as much information as possible as soon as they can on three key aspects of the arrangements that will apply to the trade in cereals and processed products after 1st February, 1973; namely, the pre-fixing of export restitutions and levies; compensatory amounts; and the arrangements for intervention, in particular prices and where the centres are to be and also the procedures and arrangements for denaturing both by incorporation and by admixture.

In the second category, the Agriculture Ministers have now decided, after consultation with the various bodies concerned, three features of the new system. First, they have invited the Home Grown Cereals Authority under the intervention system applicable to cereals to undertake, as executive agents of the Intervention Board for Agricultural Produce, functions relating to denaturing, support buying, storage and selling, and information about prices. The authority has accepted this role and discussions are proceeding on the necessary organisational and procedural arrangements.

Secondly, the minimum quantities of grain that can be sold into intervention, subject to their reaching the required standards of quality, will be 200 tons of wheat and 100 tons of barley. In reaching this decision Ministers have had to strike what they consider an appropriate balance between the interests of the various individuals and organisations involved in the growing, buying and selling, and processing of home-grown cereals. They intend to keep the working of the system closely under review.

Thirdly, discussions on the minimum standards which grain sold into intervention must satisfy are continuing with the interested organisations, but the intention is that these should be set, within the limits prescribed by the EEC's regulations, at a level that will facilitate the storage and the resale of grain.

Similar announcements about other aspects of intervention and arrangements for other commodities will be made from time to time as appropriate.