Pigmeat (Subsidy) (Hansard, 7 February 1977)

§ Mr. John Silkin

I informed the House on 20th January of the Government's decision to introduce a temporary subsidy for pig producers. The EEC Commission was formally notified on the same day. The Commission has adopted the preliminary view that the subsidy threatens to distort competition and affect trade between Member States, without facilitating the development of the sector in question. The Commission has accordingly initiated proceedings provided in Article 93(2) of the Treaty of Rome and has asked for immediate comments from all member States and other interested parties. The Commission also stated that according to Article 93(3) the subsidy may not be put into effect until the procedure under Article 93(2) has resulted in a final decision.

In their reply the Government have pointed out that, so far from distorting competition, the subsidy serves to correct in part the distortion of competition resulting from the present unjustifiable method of calculating monetary compensatory amounts on pigmeat, and that it has no adverse effect on trade. They have also pointed to a number of grounds quite apart from that of facilitating the development of the pigmeat sector, on which the subsidy could be considered to be compatible with the common market. In the light of these comments they have asked the Commission to reconsider its view.

Meanwhile, the Government have decided, in the light of the Commission's provisional view, to apply to the Council of Ministers under Article 93(2) for a decision that this temporary measure should be considered compatible with the common market.

In the meantime the subsidy, which I regard as essential in present circumstances to protect both the immediate interests of our pig producers and our 509W supplies of home produced pork and bacon in the longer term, is already in operation on the basis of the financial arrangements which I announced on 20th January.—[Vol. 924, c. 607–13.]