asked the Minister of Agriculture, Fisheries and Food what progress has been made to reduce the structural surplus in dairy products in the EEC.

During the Community Price Review the price increases for milk were set at levels which, taken with the agri-monetary changes, result in no increase in prices to producers in real terms over a large part of the Community. However, owing to favourable production conditions, milk production in the Community is running at a higher level than last year. The Commission has been instructed to submit proposals aimed at bringing the market into better balance.

Does the Minister agree that the Commission has left matters rather late in view of the supply situation for milk this summer? Does he agree that there will be more skimmed milk powder than the skimmed milk powder incorporation scheme will remove from the surplus? Will he ask his right hon. Friend to support the motion of censure on this subject at the European Parliament?

The Council regulations provide for the scheme of import deposits to end on 31st October and also, if a satisfactory reduction in stocks is not achieved by that date, that the period of the scheme may be extended. In regard to surpluses generally, the hon. Gentleman may know that stemming from negotiations which ended in March on the skimmed milk powder scheme, which was part of a package, the Council has asked the Commission to submit proposals, to take effect from the beginning of the 1977–78 milk year, for milk producers to contribute to the financing of any surpluses. My right hon. Friend has stressed that there should be more producer responsibility for surpluses.

Is my hon. Friend aware that the Members who tabled that motion in the European Parliament are the same hon. Members as voted for increased agriculture prices in the Community and that it ill becomes them to challenge the Commission on a policy which they did their best to support? Will my hon. Friend note the recent report of Which? which blames the Common Market for excessive food prices being paid by consumers in this country? Does he recognise that, whether we on this side are pro-or anti-Europe, we are very much opposed to a policy which makes that imposition on consumers?

I take note of what my hon. Friend says. He and other hon. Members will appreciate that surpluses are not a feature of the Community alone. New Zealand, Australia and other places have the same problem. What matters is food supply security, and that is the basis of our policy.

Does the Minister understand that rigged prices always lag behind the real world and that no way of preventing this ever has been discovered or ever will be?

That comment relates to other places as well as to the Community.

Regardless of whether surpluses are a feature of the Community, can my hon. Friend confirm the figure he has given me that what is politely called the structural surplus in dairy products has cost EEC taxpayers more than £800 million this year?

I hope my right hon. Friend will appreciate that shortages also cost consumers a great deal. Our problem is to ensure that supply and demand are kept in balance.

Does the Minister agree that there will be a surplus of about 1·5 million tons of dried milk and that this is mainly due to the disastrous decision of himself and his colleagues not to accept the Commission's proposals to reduce this structural amount of milk production?

If the hon. Gentleman is fair, he will admit that there is no logic in the fact that he and his hon. Friends applauded the package which my right hon. Friend brought back from Brussels and then started to criticise certain parts of it. If my right hon. Friend had not accepted the whole package, he would rightly have been criticised for not taking the best bargain we could have had for some time.

asked the Minister of Agriculture, Fisheries and Food if he will seek a readjustment of the Lomé Agreement to enable ACP sugar producers to reallocate raw sugar quotas among themselves without prejudice to the total quota of 1·3 million tons.

The ACP sugar producers themselves agreed with the Community the provisions of the Lomé Convention sugar protocol on reallocation of shortfalls. They also agreed that no change would be made to that protocol for at least five years. I shall support the reallocation of any shortfalls occuring by 30th June this year, within the existing terms of the protocol.

Yes, but does not my right hon. Friend agree that the existing terms of the protocol are not good enough in that the reallocation cannot take place in the current year? As over 400,000 tons of the 1·3 million tons of raw sugar comes from Mauritius, does my right hon. Friend agree that if that island were to suffer a natural disaster our cane refiners would be short of supplies? After the five years that my right hon. Friend has mentioned, does he agree that the matter must be looked at again?

I accept that. That is what was agreed by the producers. I am well aware of the need to maintain throughput at our cane refineries. I specifically dealt with Fiji only the other week. It had similar difficulties to those being experienced by Mauritius, but this has always happened, even under the Commonwealth Sugar agreement.

Is the right hon. Gentleman aware that I was at Luxembourg last week when the Lomé States were meeting? Is he aware that they were agreeable to the proposals that were made? They accepted them with some slight reluctance as regards price but were extremely agreeable as regards quantity. It was recognised that the agreement was to their advantage and to ours.

I am grateful for the hon. Gentleman's support. I believe that the Lomé Convention was a good deal for the ACP countries. I think there is recognition of that in the developing world.

Does my right hon. Friend agree that under the Commonwealth Sugar Agreement it was possible to get sugar from other Commonwealth sources—for example, Australia? Does he agree that it will not now be possible to get other supplies if the situation goes wrong? Finally, does he agree that the problem is not only that of the ACP producers but of the possible employment situation facing the can refiners in this country?

I am aware of the worries and concerns of those who represent constituencies where refining takes place. I have met the trade unions, and I hope to make an announcement very soon. My hon. Friend was a member and supporter of an Administration—

And resigned.

Not when Australia was a member of the Commonwealth Sugar Agreement.

asked the Minister of Agriculture, Fisheries and Food what is the current level of imported produce compared with the same period last year.

Imports of food and animal feeding stuffs in April 1976 were 4·8 per cent. higher by value and 3·5 per cent. lower by volume than in April 1975.

I thank the Minister for that reply. Is it not the case, however, that the monitoring of supplies coming into this country from outside the EEC is slow and that publication is often too late to allow action to be taken against distortion of the market? Would not the answer be to activate the reference price system for products on prevailing wholesale prices related to economic prices for the producers?

I believe that the hon. Gentleman is thinking particularly of horticultural products. I do not think that that would be applicable to main agricultural commodities. The reference price system has a rôle to play, and it does so in the context of the Community's arrangements.

Will my hon. Friend tell me whether it is a fact that British butter is going into intervention? If that is true, would it not be in the best interests of our country if we were to sell the butter to the housewife instead of importing so much German and French butter and using our vital foreign currency when it is not necessary to do so?

That is a big question. It is certainly true that some butter has gone into intervention. The main reason for that is the transitional step. When it is known that there is to be an increase in the price, the Continentals ship butter into this country to take advantage of the increase. That means that there is a temporary surplus. I think that my hon. Friend will support our policy of expanding home production.

What is the good of its going into intervention?

Is it not a fact that in the horticultural sector there have recently been substantial imports of tomatoes? Are the Government still making an effort to secure equality of competition between ourselves and the Dutch growers as regards the cost of fuel, or have they given up the attempt?

I think the hon. Gentleman will be aware that the guidelines for oil subsidies terminate at the end of this month and that we are opposed to any extension of the guidelines. We should not lose sight of the fact that competition from Holland has been affected by the depreciation of the pound.

asked the Minister of Agriculture, Fisheries and Food what was the difference last year between the target for agricultural expansion indicated by the Government's White Paper "Food from Our Own Resources" and the percentage change in production actually achieved.

I would refer the hon. Gentleman to the reply I gave the hon. Member for Canterbury (Mr. Crouch) on 25th March.

I thank the right hon. Gentleman for that illuminating response, but I remind him that the Government's White Paper promised a modest increase of 2½ per cent. almost 12 months ago. Is he not aware that the volume of production has fallen by 14 per cent., which is, I think, the largest percentage fall in agricultural production for some time, going back to the Second World War?

The hon. Gentleman knows only too well—in fact, he has quoted from "Food from Our Own Resources" —that the projections in the White Paper were not, for obvious reasons, a fixed set of production targets. I believe that the price review which we negotiated in Brussels and here with our farmers has restored a measure of confidence in the industry.

Is it not the case that conditions are now set very fair for farming and that we can look for considerable expansion of agricultural production? Does my right hon. Friend agree that the national interest would be served if Conservative Members recognised that and encouraged the increase that we need?

I am grateful for my hon. Friend's support. The hon. Member for Clitheroe (Mr. Walder), who was a junior Minister, knows that I did a good deal for the farmers in the Brussels negotiations.

The right hon. Gentleman thinks that production will expand in 1976, and he knows very well that my right hon. and hon. Friends are fully in support of an expansionist policy, but expansion did not happen last year. Now that the pound has fallen so low, is it not vital that every effort should be made to increase the volume of home-grown food even more than the Minister proposed over a year ago?

I am anxious to get home production going. In fact, this is happening. However, I cannot forecast, for example, precise weather conditions. The right hon. Gentleman, as a farmer, must know that better than I do.

Does not the right hon. Gentleman agree that it is grossly unfair to compare a year such as last year with this year, last year having been a year of panic and this year being a year of super-confidence in the agricultural industry? Will the right hon. Gentleman give further confidence to the agriculture industry by indicating whether he has contingency plans ready should the common agricultural policy collapse during the next year?

I think that the hon. Gentleman is exaggerating. People criticise the CAP, but I believe that it has given us some benefits.

Let us hope that it collapses soon.

My right hon. Friend has not yet said what we are going to do about the butter mountain which is now rearing its ugly head as a result of intervention buying.

There is no mountain of butter in this country.

The right hon. Gentleman took 25 or 26 words in not answering the Question of my hon. Friend the Member for Canterbury (Mr. Crouch). Would it not have been much more satisfactory if he had given a direct answer to the Question which required only two figures?

I gave an answer to the hon. Member for Canterbury. I do not want to repeat all my answers, even though they are very good answers.

asked the Minister of Agriculture, Fisheries and Food how much cheese was produced in the United Kingdom in the first quarter of 1975 and 1976.

United Kingdom cheese production in the first quarter of 1976 was 43,000 metric tons. In the same period of 1975 it was 55,700 metric tons.

Is the Minister aware that more cheese, particularly higher-class cheese, could have been produced in the United Kingdom in the first quarter of this year were it not for the policy of the Milk Marketing Board—and this at a time when cheese is flooding in from overseas? What does the Minister intend to do about it?

The hon. Gentleman should be aware that cheese is in considerable surplus in this country. The area of production is a matter for the producers, and in this the Milk Marketing Board plays its part. The United Kingdom's share of the cheese market has increased from 40 per cent. in 1968 to 67 per cent. in 1975.

Will my right hon. Friend say how much British cheese is being exported to Common Market countries? Is he aware that it is impossible to find British cheese in Common Market countries? In most European countries there seems to be a myth that our cheese is appalling. It is the best in the world.

I am grateful to my hon. Friend for his support, which I hope will continue. As will be seen from the White Paper, we expect greater home production in the future.

Will the Minister use his influence with the Chairman of the House of Commons Catering Committee to ensure that good British Stilton is not priced so high that it is beyond the pockets of most hon. Members?

That is not a matter for me. It is a question of consumer choice.

Without being inquisitive, may I ask which are the higher-class cheeses?

I am not sure that people always have to work out the economic reason for buying a particular cheese. It is a matter of consumer choice and preference.

Would it not help British cheese producers and our balance of payments position if we controlled the import of luxury cheese from France and Italy?

My hon. Friend may think that there is some merit in that suggestion, but the system has to be competitive. If we did that, the danger is that others would reply in the same way and this would seriously affect our exports.

asked the Minister of Agriculture, Fisheries and Food what is the current EEC subsidy on food imports as a percentage of their real cost.

The United Kingdom monetary compensatory amount resulting from the difference between the market rate and the representative rate for the £ sterling is now 20·9 per cent. of the Community support price in the United Kingdom for the products affected, except for common wheat, for which it is 28·4 per cent. of the support price.

Do not those figures indicate that the common agricultural policy is being used by the Government to conceal real increases in the cost of living? Does not the inexorable fall in the value of the pound suggest that the Government are relying ever more on the patience of our European partners to conceal their failure to grapple with inflation?

Yes, I am well aware of the problem referred to by the hon. Gentleman. It is true that our partners in the Community are affected. That is why we are all anxious to make sterling strong. As I said, I keep this under review.

Is not the hon. Member for Flint, West (Sir A. Meyer) right, and are not these devices only temporarily disguising from our people the enormous and rising cost to us of the common agricultural policy?

My right hon. Friend knows that the consumers of this country have benefited considerably. The figures show that we receive more from the Community for the benefit of the consumer than we put in.

Is the Minister aware that the value of the EEC subsidy referred to in his reply is equivalent to between 4 per cent. and 5 per cent. on the Retail Price Index? That is a considerable subsidy, much higher than it has ever been. For how long does the Minister think it will be possible for the consumer to enjoy such an enormous EEC subsidy?

This is a matter which I shall inevitably have to discuss with the Council of Ministers. I appreciate what the right hon. Gentleman said. There is no question about it.

Does my right hon. Friend agree that the subsidies described are on prices which are very high? Is not the position comparable with that of a housewife who has perforce to shop in a supermarket which charges very high prices but in return she gets Green Shield stamps?

I hope my hon. Friend appreciates that continuity of supply for the British consumer has been helped considerably by our membership of the Community. In many countries, for example the Soviet Union, production has failed.

Does the Minister agree that there is something slightly dishonourable in claiming credit for the difference of 5 per cent. in the Retail Price index because of the level of the green pound? It is a curious argument to claim that the devaluation of sterling benefits the Common Market.

I am not using that argument. The hon. Gentleman is getting curiouser and curiouser. He continually attacks the CAP without acknowledging all the gains that we have made.

asked the Minister of Agriculture, Fisheries and Food whether the Government's stated aim for an exclusive fishing zone of 50 miles is an irreducible minimum or a preliminary negotiating position.

asked the Minister of Agriculture, Fisheries and Food if he will make a further statement on fishing limits.

asked the Minister of Agriculture, Fisheries and Food what new proposals his Department has submitted to both the EEC Council of Ministers and the Commission concerning the renegotiation of the common fisheries policy, with specific reference to the concept of exclusive fishing rights for coastal States.

My right hon. Friend the Minister of State for Foreign and Commonwealth Affairs told the EEC Council of Ministers on 3rd May that the United Kingdom would be ready to consider a variable coastal belt as little as 12 miles or as much as 50 miles in different areas. He emphasised that this was a definitive statement of our needs. Discussions are continuing with our Community colleagues on this important issue.

Will the Minister think again on this in view of the entirely changed circumstances since the common fisheries policy was originally devised, notably, the Icelandic settlement and the trend towards 200-mile limits? Will the Minister and the Government make clear that it is essential in the interest of the British fishing industry to have an exclusive 50-mile limit, and will he stick to that?

I stand by the statement made by my right hon. Friend the Minister of State. I am well aware of the concern of hon. Members who represent fishing ports. This is a matter for negotiation, but we have stated our position.

Has not the position changed in that when we went into the Common Market we were repeatedly assured that the EEC common fisheries policy would be renegotiated, whereas the EEC Commissioner, Mr. Lardinois, has repeatedly said that there will be no renegotiation of this policy?

He has not said that.

He has said it. It is on the record.

No.

Order. The hon. Member for Fife, Central (Mr. Hamilton) must not continue to interrupt from a sedentary position.

I congratulate the Minister's colleague who agreed with me that a 12-mile limit was not enough. Does not the right hon. Gentleman agree that a 50-mile limit is an absolute minimum if our fishing ports are to be viable communities?

Sometimes a 35-mile limit in a particular fishing area may be adequate. I assure the hon. Lady that we shall have an opportunity of negotiation. I did not negotiate the common fisheries agreement—indeed, I was critical of it. But we face a new situation and there will have to be negotiations.

Does my right hon. Friend agree that the Treaty would first have to be renegotiated if we demanded a 50-mile limit? Does he accept that there are more ways of opening the gate than by taking it off its hinges, and that variable limits would serve our inshore fishing interests better than the renegotiation of the Treaty for a 50-mile limit?

I accept what my hon. Friend says. Being a Member of the European Parliament, he follows this matter with interest. This will have to be negotiated.

How can a statement of requirement be definitive when it is contained in a series of proposals which have not yet been disclosed in order to preserve the Government's bargaining position? How can there be a bargaining position about a definitive requirement?

The right hon. Gentleman loves semantics. I am going to negotiate in my field and the Foreign Secretary will also do so in the Council of Foreign Ministers.

Since the meeting in Brussels at which the Minister of State for Foreign and Commonwealth Affairs was present, that same Minister told the House that 50 miles was the minimum which could be said to meet the requirements of the British fishing industry. Since then there have been further events of a dramatic nature, and the Foreign Secretary was very clear about the urgent need to complete the revised common fisheries policy. The 50-mile limit must be negotiated on that basis. It is fantastic to contemplate anything less than that. When will the Minister make a statement about fishing policy as promised by the Foreign Secretary?

The Foreign Secretary said that I would make a statement very soon. I cannot say anything more, except that I shall keep the right hon. Member informed through the usual channels. [Interruption.] Well, if the right hon. Member does not want to use the usual channels I shall contact him and talk to him personally as he is an eminently reasonable man. I cannot go beyond the statement made by my right hon. Friend the Minister of State.

Is my right hon. Friend aware that many of us regard it as ludicrous to have the hound's tooth of gunboats and protection vessels rushing in and out of and up and down agreed fishing areas? To revert to the point raised by the right hon. Member for Cambridgeshire (Mr. Pym), will he confirm that part of the Government's scheme for immediate help to the fishing industry and for restructuring it will embody the decasualisation of the industry?

That has nothing to do with this Question. I have told the House today—and I have repeated the promises which my right hon. Friend gave the Opposition the other day—that this is a matter which we will have to look at.

Does my right hon. Friend accept that the grievous blow suffered by the deep sea fleet on Humberside over the Iceland settlement has changed conditions? If we are talking in terms of converting vessels to come back nearer to shore, we must bargain hard and tough over the common fisheries agreement. We should try for a 100-mile limit and then go back when they push us back.

My hon. Friend knows what the settlement which was negotiated in Oslo meant. The main problem here is to adjust the industry to the changed situation—I accept that. It is important that we should pursue vigorously the negotiations in Europe.

While accepting that the Minister has inherited a very difficult negotiating position, may I ask whether he accepts that something along the lines of a variable 12-to 50-mile limit would be regarded by the industry as an indefensible sell-out of British interests? Is it a factual position that we cannot get any exclusive limits in Britain unless our partners in Europe agree?

This is a matter for negotiation, and I cannot negotiate here in this Chamber. I believe that we must pursue our negotiations vigorously. My right hon. Friend the Minister of State announced what he thought was the right approach, and I support that.

Does not the Minister agree that the Minister of State's negotiating statement was made before the Icelandic agreement? This agreement changes the whole situation, because it will result in increased pressures on inshore waters around these islands. Therefore, we are justified in going for an exclusive 50-mile coastal belt.

I know that the hon. Member has argued this point before. I cannot repeat again what I have already said, but it is the Government's intention to move in an orderly way towards the adoption of a 200-mile limit. We believe that we will have to go to that.

asked the Minister of Agriculture, Fisheries and Food if it is his policy to maintain the present level of lamb imports from New Zealand.

My right hon. Friend and I intend to ensure continuing access to the United Kingdom market for New Zealand lamb exports to meet our requirements.

Am I right in assuming that there is no EEC policy on the import of sheepmeat from non-EEC countries, notwithstanding the movement to a full common external tariff? Will the Minister give a guarantee to New Zealand to maintain imports of sheepmeat at the present level?

There are two points in the question. The first is the supply of sheepmeat generally. The hon. Member is aware of our commitments in the White Paper "Food from Our Own Resources" and the continuing import requirement. With regard to the second point on imports of sheepmeat from New Zealand, we have made it quite clear to the Community that any future arrangements for a Community regime on this matter will have to take account of the needs of the consumer here and the position of our own market.

There is no justification whatever for applying the whole hideous apparatus of the common agricultural policy to mutton and lamb. We in this country are the biggest consumer, producer and importer in the whole of the EEC.

I stress that we must safeguard all our essential interests, including consumer prices.

Will the Minister bear in mind that this is one area in which the greatest home expansion can take place to the benefit of the consumer, the producer and the balance of payments with our export of mutton and lamb to the Community? Will he give every encouragement to home production? In Devonshire, part of which I have the privilege of representing, we have set a good example in this field: we have more sheep than head of population.

I hesitate to suggest that there is any relationship between the sheep in the hon. Member's constituency and its representation in the House of Commons. We support his observation about home production of sheepmeat. The other substantial supplier—New Zealand—has been making a decreasing contribution in recent years. Therefore, we want to give all the encouragement we can to increasing home production.

asked the Minister of Agriculture, Fisheries and Food how many tonnes of beef have been sold into intervention in the United Kingdom in 1976.

It is provisionally estimated that 12,516 metric tons of beef were taken into intervention in the United Kingdom between 1st January and 28th May 1976.

Will my hon. Friend accept that these are very depressing figures for everyone connected with the beef-producing industry? The best place for beef is not in intervention but on the housewife's table. The best way to get rid of surpluses is by allowing the price to come down. Will my hon. Friend bring pressure to bear on the EEC and urge it to adopt such a sensible policy?

Yes, I agree. We are opposed to intervention. That is why my right hon. Friend has taken steps to reduce massively the level of intervention.

Although my hon. Friend says that he is opposed to intervention, it keeps being done and mountains of one sort or another keep appearing and rearing their hideous heads. In a world in which two-thirds of the people go hungry, that sort of policy is totally obscene. The food produced by the nations of the world should be shared out among the nations of the world and not kept in intervention to satisfy the profit needs of a few French farmers.

We are basically in agreement with my hon. Friend, but he must keep this matter in perspective. There is a very small amount of beef in intervention in this country. It represents a small proportion of the total amount of meat in cold storage in the country. There is a big difference between permanent intervention on the scale which takes place on the Continent and the very limited fall-back position which applies in this country.

Does the Minister agree that the amount of beef going into intervention is minimal and that most of it is in Northern Ireland? Does he not agree that a beef subsidy is being paid to keep beef at a reasonable price for old-age pensioners and certain special categories?

That is fair. Not only is the amount in intervention minimal, but we have taken action to reduce sharply the whole amount going into intervention and we intend to see that amount fall further.

asked the Minister of Agriculture, Fisheries and Food when he next expects to meet other EEC Ministers of Agriculture.

asked the Minister of Agriculture, Fisheries and Food when he next intends to meet his EEC colleagues.

At the next meeting of the Council of Agriculture Ministers on 21st–22nd June.

Does the right hon. Gentleman recall that the commitment to New Zealand on dairy imports was a fundamental part of the Government's renegotiation? Will he confirm that he regards the agreement as being absolutely binding on both Britain and its Community partners, and that at the next meeting there will be no going back on commitments already given?

I can assure the hon. Member that, as I have frequently said in the Community, we believe that what was agreed at the Dublin summit in relation to New Zealand's access to the market here was a solemn pledge given by the whole Community—[Interruption.] The hon. Member for Banbury (Mr. Marten) should not make remarks from a seated position. He should get up and ask me questions directly. I can assure the House that we shall fight hard for New Zealand.

In view of my right hon. Friend's commitment to the Government's policy to seek fundamental changes in the CAP, will he consider, next time he meets the Agriculture Ministers, trying to persuade them to chuck the whole thing in and call a moratorium until they can devise a more sensible policy which is fair to producers and consumers?

My hon. Friend, who carefully watches the agricultural scene, must recognise that his suggestion is completely unrealistic. We are committed to and are determined to improve the CAP as part of the ongoing business in the Community. I want liberalisation of trade and access for New Zealand. I got a variable premium system for the beef industry which was like our own deficiency payments system, and I have pressed hard to dispose of surplus production into the developing countries for food aid. We have done that and the British presence has been felt.

Does the right hon. Gentleman agree that if the CAP is to succeed in the next five or 10 years we must abolish the green pound?

Inevitably there must be a major adjustment here, but we cannot do it immediately because it would harm our consumers.

Is my right hon. Friend aware that consumers make up 100 per cent. of the Community and that they have no voice to speak directly for them in Brussels? Will he press for a commissioner of consumer affairs to be appointed to look after their interests and to redress the imbalance within the CAP?

I cannot accept that. I am the Minister for Agriculture and Food, and I continually press the consumer position.

Is the right hon. Gentleman aware that one of the most important things he can do when he next meets the Community Ministers of Agriculture is to impress upon them that it is absolutely vital for the benefit both of producers and of consumers in this country that our existing marketing boards should be allowed to continue working in the way they are at the moment?

I stated the other day at the Dairy Federation conference my views on the Milk Marketing Board, which is an example of a very successful organisation. I have stated precisely what the Government intend to do.

asked the Minister of Agriculture, Fisheries and Food what are the prospects for the current crop of potatoes; and what steps he intends to take to ensure adequacy of supply next winter, while safeguarding the consumer from unjustified profiteering.

It is still too early to make any firm estimate of production from the 1976 crop. Plantings should now be complete and the area planted by registered producers in Great Britain is estimated at 186,000 hectares, 6,000 hectares more than in 1975. Given normal yields, this should provide sufficient potatoes to meet our requirements. Until the level of production can be assessed, it is impossible to say whether any steps will need to be taken to supplement supplies, but we will continue to watch the situation closely and will take prompt action if necessary.

Is my hon. Friend aware that, notwithstanding the vagaries of the weather, the housewife now has the very strong impression that there has been a considerable amount of unjustified profiteering during the last 12 months? May we expect in the near future a statement on the investigations that the Government were conducting on the distribution of potatoes?

I appreciate my hon. Friend's concern and the concern felt generally on this subject. I remind him that the report of the Price Commission found no evidence of excessive margins in the distribution of potatoes. Of course some producers have done well, but returns from agricultural crops inevitably vary from season to season and it is fundamental that the high prices are due to the very much lower yield. That has affected the profit returns to producers generally.

asked the Prime Minister how many ministerial broadcasts he has made since taking office.

One, Sir.

When my right hon. Friend next makes a broadcast, will he care to refer to the responsible attitude of the trade unions which are now planning for a return to free collective bargaining, because, as David Basnett said yesterday, they want to avoid an atomic explosion of wages? Will he agree that that creative attitude is in direct contrast with the attitude of those in management who are now busily devoting their time and energy to schemes designed to evade taxation?

We shall have considerable problems next year when we discuss the ending of the agreement on pay which will expire in July 1977. It is generally recognised by trade unions and by the Government that there will have to be consultation about these matters, and we shall be ready to enter upon that as soon as seems appropriate.

When he next makes a ministerial broadcast will the Prime Minister explain what he proposes to do with the Aircraft and Shipbuilding Industries Bill? Does he propose to redeem the broken pledge on the last vote on that Bill by dropping the measure?

I shall of course be very happy to discuss the Shipbuilding Bill on television or in any other forum if it seems appropriate. I must resist the right hon. Lady's view about the way in which the vote was conducted. I do not wish to exacerbate or add to the difficulties which exist in the House, but I am bound to say that some of the accounts which have appeared do not tally with my version or my understanding of what took place, and it is at least as likely that I am right as that the Opposition Chief Whip is right.

Will my right hon.

The child benefit scheme has not been abandoned, but it has been partly implemented by giving £1 for the first child. It cannot be fully implemented, as I stated yesterday in the course of ray long speech which my hon. Friend found sufficiently convincing to vote for.

Having seen the Prime Minister before on this matter, may I just say to him that there is no question but that there was a broken pledge with a named pair—a pledge which was honoured in the first Division and not in the second? I would ask the right hon. Gentleman whether as Prime Minister, he proposes to keep his ill-gotten gain at any price.

I do not agree with the right hon. Lady. It is not the case, as we understand the situation, that there was a broken pledge. On the evening I saw the right hon. Lady, when I had returned from Scotland and saw her within half an hour, I had not acquainted myself with the full facts, because I was anxious to see her quickly. Having acquainted myself with the full facts, I am afraid that I cannot accept her version of the matter. [Interruption.] The Chief Whip would probably like to say a lot about it, but what should restrain both sides of the House is the fact that we have to work together if parliamentary democracy is to continue.

indicated dissent.

If I cannot persuade the right hon. Lady, I am afraid that the issue must rest there for the time being.

When my right hon. Friend next makes a ministerial broadcast, will he explain to the nation why on every occasion that the Conservative Party has no policy to offer the nation it resorts to smears and slanders such as equating the Labour Party with either the Gestapo or East European countries? Is it not time that the nation was informed by a broadcast of what social democracy really means and how we are the greatest defenders of our democratic rights and liberties?

I listened to that part of the right hon. Lady's speech yesterday, but I do not think that the House took it very seriously. I am not at all sure that I should want to spend time on a broadcast on this matter. I am not aware that in the Iron Curtain countries to which the right hon. Lady referred there is a free Press with the kind of criticism of the Government that we see here every day. I am not aware that people can move freely about between their jobs nor—and this is the ultimate sanction which the right hon. Lady herself may be able to secure support for some time—are they free, as are the people of this country, to change their Government. If she really believes that we resemble an Iron Curtain country, all I can say is that that kind of exaggeration will be treated with derision.

When the Prime Minister next makes a ministerial broadcast, will he tell the British people that the Government will not accept the view being put forward by trade unions—that we should have non-elected local councillors? Will he reaffirm his belief again and state categorically, that all local councillors must be elected through the ballot box?

I have not studied that particular matter but, as the hon. Gentleman formulates it, I would accept what he says.

asked the Prime Minister when he next expects to meet the Secretary-General of NATO.

I have no plans to meet the Secretary-General in the near future. But my right hon. Friend the Foreign and Commonwealth Secretary met him at the North Atlantic Council meeting in Oslo on 20th and 21st May; and my right hon. Friend the Secretary of State for Defence is seeing him today at the meeting of the NATO Defence Planning Committee in Brussels.

What assurance will the Prime Minister give the Secretary-General that he will not cheat the country out of its proper and vital defence rôle by implementing any part of the Labour Party programme on defence to appease the Marxist members in his party, an action for which he has no mandate and which the great majority of people will deplore?

When I have the pleasure of meeting Dr. Luns we do not conduct our conversations on that basis. I think that the general NATO attitude towards Britain is that she is making a full and proper contribution to a unified defence system. I have had no complaint on any other score; and I doubt that we shall be discussing those matters.

Will the Prime Minister have a word with Dr. Luns about the SNP commitment to a separate Scottish air force? He might even pass on some of the well informed speeches which my hon. Friends hope to make this afternoon on the operational efficiency and costs of a tartan air force.

When Dr. Luns and I meet we discuss matters of more immediate practical importance than that, but if the Scottish nationalists would like some assistance, I shall ask the Secretary of State for Defence to give them some idea of what the cost for a separate air force would be. It might frighten them a little.

When the Prime Minister meets the Secretary-General will he discuss with him the fact that in recent weeks it has emerged from his own Government's estimates that Russian spending on defence is very much higher than we believed it to be when we conducted our own defence reviews? In view of this, should we not conduct another review to see whether it is necessary for us to spend something faintly approaching the 11 per cent. or 12 per cent. of GNP that the Russians spend on defence?

I do not think that the Soviet defence capacity has been underestimated. What has been underestimated is the proportion of the Soviet GDP that it involves. According to the latest figures, it looks as though the Russians have had to absorb about 11 per cent. or 12 per cent. of their GDP per annum, but this does not make any difference to the assumption which has been made by the chiefs of staff and others of the actual size of the Soviet capability. It has been increasing in recent years, and this has not been disguised.

When the Prime Minister meets the Secretary-General, will he let him know that the proposed air force of the Scottish Parliament will be one that is relevant to the needs of Scotland and suitable for patrolling the fishing limits around our shores? Can he tell us when he will place some orders for Jetstream aircraft with Scottish Aviation Ltd. for aircraft suitable for such a purpose now?

I am not sure whether the hon. Gentleman has assumed the rôle of Shadow Minister of Defence, but if he has I salute him and congratulate him on his maiden speech. I would say to him that I hope that the people of Scotland will believe that their defence needs are adequately covered by the defence arrangements for the United Kingdom. I hope that they will not listen to the rather silly nonsense which is talked about setting up a separate defence service, presumably with another army, navy and air force, to protect the Scottish people.

asked the Prime Minister if he will meet the Governor of the Bank of England.

I have no plans to meet the Governor in the immediate future. But my right hon. Friend the Chancellor of the Exchequer maintains close contact with him.

When my right hon. Friend next meets the Governor of the Bank of England will he discuss with him the pivotal rôle of the Bank, the Government and industry in the oncoming upturn? Will he take care not to repeat the blunders of the Barber Administration and ensure complete control over the money supply during the coming period? Will he also issue the strongest directive to the banking system that investment funds should find their way into productive industry?

I take my hon. Friend's last point completely. I hope that with the upturn that is coming that will be so.

The right hon. Gentleman has got it right.

—aided by the pay policy. I do not want to make relations between the right hon. Member for Down, South (Mr. Powell) and the Opposition Front Bench any worse.

In view of the Prime Minister's great interest in and long experience of these matters and in view of his continued assertions that sterling is at present under-valued, will he tell the House precisely what he considers the right value of sterling to be?

There was a time when I used to read the hon. Gentleman with some interest. I never then heard him make such a suggestion, and he should not do so now. The hon. Gentleman knows very well that it would be foolish for me to make such an assumption.