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European Community (Agriculture Ministers' Meeting)

Volume 983: debated on Thursday 24 April 1980

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With permission, Mr. Speaker, I should like to make a statement about the meeting of the Council of Ministers in Brussels on 21–24 April, at which I represented the United Kingdom and was accompanied by my hon. Friend the Minister of State.

After two days of inconclusive discussion of the milk surplus, the Council spent its final sessions in agreeing a report for the European Council on the principles which should underlie this year's prices settlement. This statement contains no commitment as to price levels, though it records that a large majority of member States is in favour of larger increases than have been proposed by the Commission. I repeated the view of Her Majesty's Government that there should be no price increases on those items in surplus and that price increases elsewhere should be within the limits proposed by the Commission.

On co-responsibility levies for milk, there was a consensus that the cost of disposing of future additional production should be borne by producers themselves, by means of a flat-rate levy of not less than the 1·5 per cent. level agreed last year, and a further levy designed to put additional pressure upon further increases in milk production. There is, however, no agreement as to the form of this further levy. Some member States make their acceptance of the principle conditional on its being implemented by means of a levy on products going into intervention, and others on its incorporating an element of discrimination whereby the rate of levy would be lower for certain classes of producers. We were supported by other delegations in our view that there should be no discrimination. Finally, the report refers to the decision of the Economic and Finance Council that substantial savings must be made in agricultural expenditure.

There was virtually no discussion of sheepmeat, but the French Minister and I each circulated a statement of our respective positions, and these will be further considered by the appropriate institutions.

The marketing years for commodities due to end next week were extended to the end of May. Finally, the Council adopted a proposal by the Commission on the treatment of variable positive monetary compensatory amounts. Under this arrangement, during the two months for which this proposal operates, Britain will be on the same basis as the other members of the Community with regard to both positive and negative monetary compensatory amounts. I made it clear that I accepted this only subject to thorough consideration of the whole issue on a Community basis during the coming weeks.

I am sure that the House will be grateful to the right hon. Gentleman for that statement, because it would appear that he has stood by his pledge to the House that he would not agree to any increase in prices for products in structural surplus, or agree to a sheep-meat scheme which benefits the French at the expense of the Community budget. But is he aware that he has now effectively passed the buck to the Prime Minister and the summit meeting? Although he has stood by his pledges to the House, does he think that the Prime Minister will do the same? I warn him that we fear a sell-out at the summit.

Does the right hon. Gentleman recognise that this is not the best way to develop a sensible and rational agriculture policy, when it is to be subject to trade-offs between Prime Ministers? I hope, therefore, that he will assure us, as Minister of Agriculture, that he will not allow the Prime Minister to trade off our common fishery policy objectives or weaken on a price freeze on surplus products.

There was no mention of sugar in the statement. May we take it that the right hon. Gentleman is still committed to a reduction in quotas? May we take it that the beef premium and the full butter subsidies will also continue?

Having listened earlier to the Leader of the Opposition, and having just listened to the Opposition spokesman on agriculture, I admire the cheek of the Opposition, because no Government gave away more on prices for goods in surplus than the previous Labour Government. The former Prime Minister, in 1977–78, not only agreed to increase prices of milk, sugar and wine, all in surplus, but actually agreed to increases in prices beyond what the Commission was proposing. For that ex-Prime Minister to lecture the present Prime Minister on giving way on prices is a classic example of the practitioner of the past—I hope—confessing his sins. [Interruption.] The reason for my having a weak case is that under the previous Labour Government the cost of the CAP went up from £1,600 million to £7,000 million as a result of the right hon. Gentleman's rather reckless policies towards it. The view of the Government on prices has been made perfectly clear and it remains the position of Her Majesty's Government.

No discussion took place about sugar but the Commission implied that it would be introducing measures to increase the levy on the B quota this year. It is likely that last year's quotas will continue in existence for another year.

With regard to the beef premium, we have made clear our position that we would do away with the scheme only if there were other appropriate schemes that were better for our producers.

Is the Minister aware of the growing problems in agriculture concerning profitability generally? He did not deal in his statement with the horticulture subsidy which Germany has now introduced—a scheme involving £1·;·5 million to subsidise its glasshouse growers with energy costs because they have been suffering from dumping from Holland. It is rumoured that the French will do the same. What will our Government do to protect our own producers?

At the previous Council meeting it was agreed by a number of members of the Council, including ourselves, that there was a need for the Community to have a common approach to the problem, and the Commission promised to produce a paper on that. I spoke to the Commissioner on the topic at the last meeting. He informed me that the paper has now been prepared, and promised to bring it forward—I hope at the next Council meeting. The only way to tackle the problem is to have a common standard for the Community as a whole.

Does my right hon. Friend agree that the dispute with the French over sheepmeat has been allowed to drag on for far too long, to the detriment of United Kingdom sheep producers? Will he therefore explain what further action he can take, other than referring the matter to the respective committees and institutions, that will resolve the problem in the way that we all hope?

On the sheepmeat regime, when we reached that item on the agenda at 3 o'clock this morning, the French Minister announced that he was in total disagreement with all the proposals that had been put forward and, as the Council of Ministers had not agreed on any of the many proposals that he was making for price increases elsewhere, he could not go on discussing the sheepmeat regime.

The Presidency and others reacted by saying that it was a matter which had to be cleared up in the near future. The paper tabled by the British Government, which does not include intervention and would benefit our sheep producers, as the biggest in Europe, will be discussed at a working committee prior to the next Council meeting. I hope that we shall be able to make progress.

Does the right hon. Gentleman intend to continue to accept the imposition of a levy on increased production of milk in the United Kingdom, even though we are massive net importers of milk and dairy products? Does he not think that the British farming industry faces enough difficulties, with interest rates and so on, without facing that sort of discrimination as well?

I made clear in my statement that I will not accept a levy that discriminates against the United Kingdom producer. I want a system that operates on the basis that those who produce the surpluses in Europe meet the cost of disposing of them. I should favour any move towards that principle.

In order that we may all be quite clear about it, will my right hon. Friend reaffirm the promise that he gave me in the House just before Easter that there will be a veto on any increases in farm prices for items that are in structural surplus?

Yes, Sir. The position is that at this Council meeting, as at others, the British Government made clear that they are not in favour of any price in-creases creases that will continue the increases in the surpluses. Late last night there was an attempt by the French Government to obtain an increase of 5 per cent. overall. Obviously, we made our position clear on that, and I am glad to say that the majority of member States were unwilling to accept a price increase of that order.

Is the Minister aware that there is considerable feeling in the North-East of England that in the Community discussions on fishing and the special dispensation for " North Britain ", that refers only to Scotland? Will he assure the House that he will ensure that " North Britain " includes the North-East of England? I make that point seriously in view of yesterday's unemployment figures, which show that one man in five in my constituency is without a job.

I am discussing an Agriculture Council meeting and not a Fisheries Council meeting. The hon. Gentleman has raised a topic which I shall discuss at the Fisheries Council.

Is my right hon. Friend aware that the Opposition spokesman on agriculture still does not understand the CAP, the Government's policies or what his own Government did when in office? Will my right hon. Friend accept the congratulations of the House on defending the British position robustly and successfully so far? Is not the great message of hope that afer the summit meeting all the other member States realise increasingly strongly that the CAP must be fundamentally recast and reconstructed in the next two years, and that this could be the beginning of a new era if the French would co-operate?

Perhaps the most significant factor in this year's price review is that for the first time the Commission has put forward a proposal for the cost of additional surpluses to be borne by the member States producing them. I shall hope to persuade the Council, over a period, that the same principle should apply to existing surpluses.

Order. I propose to stop questions at 4.30 pm, even if hon. Members are still trying to catch my eye. I hope that questions will be brief.

On the question of the so-called co-responsibility levy on milk, will the Minister confirm that it is in fact a milk tax and that even if farm prices remain the same, prices to the consumer may well go up? Will he confirm that in his experience, when he has to reach decisions on the same time scale, he cannot avoid linking the issues that have to be decided by a given time?

I presume that all the increases above the Commission's proposals that took place during the lifetime of the previous Government were due to those sort of linkages and negotiated positions. Perhaps that could be explained by the previous Minister of Agriculture. On the co-responsibility levy, I should prefer a system in which the exercise of restraint was on the price and not on the levy. The levy system has been in operation for some time and at the previous meeting of the Council it was agreed that if milk surpluses continued to rise the levy would also rise. That is the current position.

As the hon. Member for a constituency with an important agricultural content, may I assure my right hon. Friend that he certainly has the confidence of farmers, who believe that he will ensure that the best interests of British agriculture prevail in Europe. Will he give a categorical assurance to the House, so that it is on record for ever, that he will not consider any form of discriminatory co-responsibility levy on milk which will be damaging to the British dairy industry?

I was not sure whether, when the right hon. Gentleman said earlier " Yes, Sir " to one of his hon. Friends, he really meant that he would use the veto to prevent any products in surplus from having their prices increased and that he would use the veto to maintain a price freeze.

Obviously there is a relationship between levies, prices and other topics. I have stated categorically that I am against giving increases in incomes to those who are currently producing surpluses. That is a sensible view, to which we will adhere.

Is my right hon. Friend aware that, although we on the Conservative Benches have every faith in him and we are confident that our right hon. Friend the Prime Minister will be able to achieve this weekend far more than anyone else in this country could possibly achieve, there is always the possibility that a few bone-headed Frenchmen will prevent an adequate settlement being reached? As a prudent and effective Minister, no doubt my right hon. Friend has some contingency plans. As the housewives of this country are fed up to the back teeth with the common agricultural policy and paying £35 a year for each member of their families above what they would otherwise have to pay, will my right hon. Friend confirm that included in his contingency plans is the possibility of buying food on the world markets at world prices?

Having had the wisdom of my advice for the past three days and nights, I am sure that the view of the French will change.

In view of the appalling budgetary consequences that would flow from any decision that did not reflect the priorities of the Government, and in view of past experiences of Councils of Agriculture Ministers exceeding the Commission's recommended price levels, does the right hon. Gentleman think that there would be some advantage in the final decision on price levels and price fixing for agriculture being taken by the Council of Finance Ministers rather than by the Council of Agriculture Ministers?

I should be happy for my right hon. and learned Friend the Chancellor of the Exchequer to attend all these meetings on my behalf. It is a myth that Agriculture Ministers decide matters in the interest of agriculture communities against the wishes of their Finance Ministers and Prime Ministers. My judgment on the CAP is that the increases that have taken place have had the full approval of the Governments concerned. When it is suggested in Germany that the German Agriculture Minister does not have the support of his Government for all the increases that he has obtained, it must be remembered that he has remained the German Minister of Agriculture for 11 years.

Following on from my right hon. Friend's reply, he will be aware that my right hon. Friend the Prime Minister said this afternoon that farm prices were to be settled within the Council of Agriculture Ministers. Will he therefore confirm, finally and conclusively, that he will continue to oppose any increase in the prices of commodities that are in structural surplus?

That is the position not of myself, but of the Government. I assure my hon. Friend that at every Council meeting that I attend the negotiating position that I take is agreed by the Government as a whole. I am sure that the same was true of my predecessor. My negotiating position is agreed by the Foreign Secretary, the Chancellor of the Exchequer, the Prime Minister and all the members of the Government.

As the Prime Minister came back from Dublin saying that she would not accept half a loaf, and as she will now be negotiating at the summit conference for the elimination of the £1,300 million, may we have a categorical assurance that the farm price review will not be a part of the package to reduce that £1,300 million, in view of the fact that inflation in Britain is running at 20 per cent., which is a much higher rate than that of the rest of Europe?

All that I can say is that our record so far on this matter is very much better than that of our predecessors. If we got half a loaf, it would be much better than the previous Government achieved. They never got a crust.

Will the Minister accept my congratulations on the fact that he has so far resisted any increase in prices of products in surplus? However, in view of the evasive answers given by the Prime Minister earlier today, will he give a categoric assurance that in the package deal that she negotiates there will be no possibility of these prices being increased, and that he will veto any price increases for products in structural surplus?

I am sorry, but I really believe that this attempt by Opposition Members to create an atmosphere and situation in which there is no possible negotiating position is absurd. All that I can say is that Her Majesty's Government's record on CAP prices is so much superior to that of our predecessors that people can have much more confidence now than ever before.

Does the right hon. Gentleman recall, however, that only on 20 March his right hon. Friend the Prime Minister gave the Leader of the Opposition the assurance that the Government would stick to a price freeze on products which are at present in surplus and that later that afternoon the Minister himself accepted an Opposition amendment committing the Government to a price freeze on milk and sugar? In view of his right hon. Friend's prevaricating replies this afternoon, will he give a straight " Yes " or " No " answer to this question: are the Government committed to a price freeze on milk and sugar?

I repeat that the Government's policy is a prices freeze on milk and sugar. That has always been the position and, unlike the previous Government, we have stuck to it.