Wool Guarantee (Hansard, 24 October 1988)

§ Mr. Macgregor

The Government set guaranteed prices for wool and potatoes only. The intention to end the potato guarantee and review the potato marketing support arrangements was announced earlier this year. The financial agreement between the Government and the British Wool Marketing Board expires on 30 April 1990 and must be reviewed before that date. The prospect of this review, and the announcement on potatoes, have created uncertainties in relation to wool. It therefore seems appropriate to state the Government's intentions on wool as early as possible to remove uncertainty and to give the industry maximum notice of proposed changes.

The board has been notably successful in recent years in promoting improvements in quality and marketing of British wool in the interest of wool producers and consumers. The board also administers on behalf of Government the wool guarantee which operates through a stabilisation fund. This element of Government involvement in the wool market is no longer appropriate since the Government believe that the industry should now be ready to accept financial responsibility for its own affairs. The Government do not intend otherwise to change the marketing arrangements for wool. The marketing of clip wool in the United Kingdom will continue to be organised by the British Wool Marketing Board operating under the British wool marketing scheme.

The Government therefore intend to introduce legislation as soon as parliamentary time permits to abolish the guarantee arrangements under which the Government fix a guaranteed price for wool each year. The precise timing of such a step will be subject to further discussions, but it seems unlikely on present indications to take effect before 1991. Thus guaranteed prices will continue to be fixed for the 1989 and 1990 wool clips. In so far as this would necessarily involve an extension of the current financial agreement between the Government and the British Wool Marketing Board beyond its expiry, when the Government are due to write off any debts outstanding 75W in the stabilisation fund, the Government will be entering into discussions with the British Wool Marketing Board to agree appropriate arrangements.