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The European Community: Mutton And Lamb Régime

Volume 414: debated on Thursday 30 October 1980

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3.10 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will summarise the recently agreed European Community proposals for the production, import and export of mutton and lamb; what are their implications for the farmer, the taxpayer and the consumer; and to what extent they meet the serious anxieties previously expressed by Australia and New Zealand.

My Lords, the Community régime for mutton and lamb came into effect on 20th October 1980. The support provisions consist of measures to guarantee producers' incomes through annual premiums on ewes, together with the option of operating either intervention or a variable premium, which is in effect a weekly deficiency payment and is on similar lines to our previous Fat Sheep Guarantee. Member states who operate the variable premium must recover an amount equivalent to the premium on sheep or carcases which they export.

Trade with the major third country suppliers is covered by voluntary restraint agreements. Under these, third countries will restrict their exports to the Community to a level slightly above that which prevailed recently. In return for this restriction, they will enjoy a halving of the import duty on the consignments which they send.

The régime will increase the returns of United Kingdom farmers whilst fully protecting the interests of consumers. The support arrangements are fully financed by the Community. The voluntary restraint agreements will safeguard the position of Australia and New Zealand on terms which were acceptable to their Governments.

My Lords, I am most grateful for that summary of a very complicated agreement, in regard to which I feel the Government deserve much praise for the skill and patience that they have shown in negotiating it. May I put two brief supplementary questions to my noble friend? First, does he agree with me that had a Socialist Britain not been a member of the Community, New Zealand's and Australia's traditional export markets would have been at risk from dumping of subsidised frozen lamb and butter from the intervention stockpiles, and that therefore it is just as well that we are members of the Community?

Secondly, may I ask my noble friend whether he will say a word about the very serious problems which have faced farmers in the last week or two with regard to their exports (particularly, I think, to West Germany and Holland) resulting from the clawback of subsidies which is required when lamb is exported? I think I am right in saying that we hope to continue to export some 20 per cent. of our lamb production.

My Lords, I entirely agree with my noble friend that it is because we are members of the Community that we have been able to protect the interests of Australia and New Zealand in the way I have described.

My noble friend is perfectly right in saying that there have been problems over the export of lamb to Belgium and Germany, particularly, since these proposals came into operation. The reason is the combination of the fact that exporters have to pay what is rather unpleasantly described as the "clawback" and, of course, the transport charges, which has made the resultant price of English lamb in those countries temporarily relatively uncompetitive. But I would say this to my noble friend: the new scheme has been in operation only since 20th October. It will take time to settle down, and I would hope that these initial problems will be overcome. But I can tell my noble friend that the Commission have given a firm undertaking that they will keep the clawback arrangements under review, and they have confirmed that it is not the intention to hinder the development of the export trade.