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Cereal Production (Balance Of Payments)

Volume 114: debated on Thursday 23 April 1987

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asked the Prime Minister by how much the balance of payments in relation to cereal production has grown since 1979; and if she will list those industries, services or sectors where the balance of payments has grown by an equivalent or greater sum.

In 1979 the cereal sector had a deficit on its crude trade balance of nearly £500 million; for the 12 months to September 1986 it returned a surplus of nearly £100 million. Similar improvements have occurred in some other sectors, including organic chemicals, aerospace equipment, insurance, banking and other financial services, oil and natural gas extraction.

I thank my right hon. Friend for that reply. Does she agree that her reply is, in itself, a tribute to the efficiency and enterprise of agriculture and of the cereals sector in particular?

Yes, I agree with my hon. Friend that farmers have made an outstanding contribution to the economy. They and we know that some things, including cereals, are now in surplus. We have to try to deal with those surpluses because they are taking far too much of the total European budget. We shall try to do so at a rate with which the farmers can cope.

What does the Prime Minister intend to do for those sectors that have not done quite as well as the cereal sector—for example, electrical machinery, textiles and vehicles? In those sectors, a combined surplus of £1,400 million has turned into a combined deficit of £6,400 million under this Government. What will she do for those important industries?

Textiles, as the hon. Gentleman is aware, have made a tremendous comeback and monthly improvements are being made, both in the amount produced and in the excellent textile designs for clothing and furnishings. It sounds to me as though the hon. Gentleman is proposing a good deal of protectionism, which, of course, we reject. We have a multi-fibre arrangement. I remind the hon. Gentleman that Opposition Members frequently ask for more aid for Third world countries while denying them trade.

Is my right hon. Friend aware that it would be a disaster for cereal farmers if their agricultural buildings were rated, as the Labour party wants, or if their products suffered a two-tier price structure, which is what the alliance wants? Will my right hon. Friend confirm that the Conservative party is implacably opposed to the rating of agricultural properties and to a two-tier price structure?

Yes. We are totally opposed to the rating of agricultural property, which would not only have a disastrous effect on farming but would put up prices for the consumer.

Does the Prime Minister accept that, had the coal or textile industries received the same degree of protection that has been afforded to the cereal producers of Europe, their performance might have been rather better?

As the hon. Gentleman is aware, the textile industry has a multi-fibre arrangement, through the European Community, which is renewed each time that it runs out. The hon. Gentleman is aware of the difficulties of negotiations that we have with it. He is also aware of the massive subsidies that continue to go to the coal industry each year.