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Food And Fuels (European Community)

Volume 934: debated on Monday 27 June 1977

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2.

asked the Secretary of State for Trade what were the amounts in £ sterling of the cost of imported food and fuels, respectively, from the EEC countries over the past three months ended 31st May 1977; and what were the amounts of oil and coal, respectively, which the United Kingdom exported to those countries during the same period.

In the three months ended May 1977, the value of imports of food—including live animals —and fuels from the EEC was £622 million and £261 million, respectively. Exports of petôum and petôum products and of coal, coke and briquettes to the EEC were £250 million and £12 million, respectively.

What would be the cost of importing a similar quantity of food from countries outside the EEC? Is my hon. Friend aware that there are many complaints about the cost of food from the Community in view of the price of food available from other sources? Is it not time that the Department produced information on that matter? On the question of coal, is not my hon. Friend aware that 40 million tons of coal are imported—

Order. The hon. Gentleman is now giving information. He has asked a lot of questions. Perhaps he will ask one for luck to finish.

Will my hon. Friend say what his intentions are for trying to persuade the EEC to take some of our surplus coal instead of buying coal from countries outside the EEC?

The National Coal Board is certainly well aware of the surplus of steam coal, although stocks declined last winter. It is making efforts to unload as much as possible on EEC markets.

As for food, an article of 11th June in the Economist estimated that the CAP adds between £500 million and £600 million a year to our trade deficit. There were two recent estimates by eminent economists on this matter. Professor Josling estimated that the saving for the United Kingdom of buying at world prices would be £380 million. Wynne Godley estimated that the saving was £200 million plus £430 million saved in payments to the CAP. I cannot give authority to these figures because they depend on factors which are systematically unquantifiable.

I agree with the Minister that the figures are confusing, but do we not get back to the fact that the Common Market has tariffs because food is cheaper outside the EEC and that an import tariff has to be imposed to bring the price up to Community levels?

I accept, as everyone must, that that is the case. The aim of the EEC is to achieve as much self-sufficiency as possible in both industry and agriculture.

Has my hon. Friend read the replies given last week by the Secretary of State for Prices and Consumer Protection in which he indicated that the effect of the CAP on our retail price index was very marginal?

The effect on the retail food index of the estimates which I have already quoted from two eminent economists works out at between 1·5 and 3 per cent.

What is the basis for the Minister's statement about the EEC's policy on self-sufficiency?

I think the contention that the EEC and the Treaty of Rome are based on the intention that member States shall be collectively as self-sufficient as possible is well understood. It is not enshrined in any particular article, but I have no doubt that it was in the minds of the founders of the EEC.

Is my hon. Friend aware that he would have considerable difficulty in persuading housewives that the EEC was responsible for such a small percentage of the rise in prices, particularly on basic foods such as milk and dairy products? In the case of many basic foods such as beef, he would find it virtually impossible to do that.

I was quoting the results of the studies which have been undertaken by two eminent economists. I was not giving my own view.

We have noted that the Minister's figures were rather questionable—I think that that was the term he used. However, have any estimates been made of what the margin would be between EEC and world food prices if the EEC were to start buying these products on the world market? What would that do to that margin? Would it not narrow very quickly indeed?

The effects of such a suggestion, which is purely hypothetical, cannot be quantified. If the hon. Gentleman wishes to pursue this matter, however, I suggest that he puts down a Question to my right hon. Friend the Minister of Agriculture, whose Department is most closely concerned.