Hansard

The Green Pound: Consequences Of Present Value

Volume 415: debated on Thursday 4 December 1980

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Lord O'Hagan

asked Her Majesty's Government:What is the consequence of the present value of the green pound for:

  • (a) the British farmer;
  • (b) the British consumer;
  • (c) the British food manufacturing industry;
  • (d) the level of imports of fuel, fertilizer and machinery;
  • (e) trade in farm products within the EEC; and
  • (f) British agricultural exports.

    • Earl Ferrers

    The present value of the green pound means that the sterling equivalents of the European Community's farm support prices are 13·3 per cent. higher than if they were converted at the market rate for sterling. On existing levels of production and consumption, it can be calculated that, were this position to remain for 12 months, a difference in support prices of this order would advantage United Kingdom farmers in a full year by about £500 million, and that it would be likely to raise the food price index and retail price index by about 2¼ per cent. and ½ per cent. respectively.Compared with using the market rate of sterling, therefore, the present value of the green pound should stimulate increased farm production, and should result in lower food imports, higher agricultural exports and greater output by the industries which supply agriculture. It is, however, difficult to measure these effects precisely.