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Green Pound

Volume 130: debated on Thursday 31 March 1988

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10.

To ask the Minister of Agriculture, Fisheries and Food what recent representations he has received about the level of the green pound; and if he will make a statement.

I have received a number of representations on this subject. The majority have sought a devaluation for pigmeat. Some have concerned all or a number of sectors. Representations from food manufacturing interests have opposed devaluation.

I recognise that my right hon. Friend has already said that he is seeking a devaluation of the green pound. Is he aware, however, of the considerable importance attached by the British farming community to his success? Bearing in mind that the first 4 per cent. of any devaluation will be used to offset the drop in farm incomes brought about by the recent package of measures on stabilisers, is he seeking a devaluation greater than 4 per cent., so that there will be real benefit to the British farmer?

Of course I am aware of the feelings of farmers in this country, but I think it is important to keep the two matters separate. The stabiliser regime is necessary on its own, with—if production goes beyond the maximum guarantee quantity thresholds—the effects of price reductions. That is necessary to deal with the soaring cost of the common agricultural policy and the surpluses.

Devaluing the green pound is a question of fairer terms of competition between the member states, and is also strongly linked with the move towards the single market by 1992, when it must be right to get rid of the MCA system altogether. It is important to approach the two matters differently, and that is what I am doing.

In my right hon. Friend's negotiations with other member states, will he remind them that they are meant to believe in the principle of fair competition? Are not British farmers suffering considerably because of the level of the green pound? Will he impress upon those member states that, as they have to get used to the principle of fair competition for 1992, it would be far better if they began to get used to it now?

I am sure my hon. Friend recognises that our competitiveness has vastly improved during the past year. United Kingdom MCAs are now 18 to 20 points lower than in February 1987, which is well over half in all sectors and more than three quarters for beef. That has significantly improved our competitive position. I agree about the importance of achieving competition on, overall, reasonably fair terms. I also agree about the importance of moving to that position ready for 1992, and that is what I stressed this week.