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

asked the Minister of Agriculture, Fisheries and Food what discussions he has had recently with the Council of Ministers and with the European Commission.

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

I would refer my hon. Friends and the hon. Member to the statement that I made on 22nd July following the meeting of the Council of Ministers (Agriculture) on 18th-19th July. I will be meeting my colleagues again on on 26th-27th September.

Can my right hon. Friend tell his Common Market counterparts that nowhere is the stupidity of the Common Market so evident as in his three areas of responsibility? In agriculture, it has meant inefficient production. In fisheries, the absence of an exclusive zone continues to threaten the very livelihood of our fishermen. In food, it has meant inflated food prices and mountains of waste. Is it any wonder that yesterday the Labour Party NEC called for the whole question of our Common Market membership to be reopened? It is obvious that most people were conned in the referendum two years ago.

Certainly the questions that my hon. Friend has suggested relating to agriculture, fisheries and food arose, though my own contribution was perhaps not entirely couched in the language which my hon. Friend has just used. However, I hope that it was effective.

Is the Minister correctly reported in today's newspapers to be urging in Brussels the lowering of the beef intervention buying point to 85 per cent. of the reference price? If that is so, how can it do other than further erode producers' confidence and increase uncertainty among beef producers in Great Britain?

I have not seen the article in question, so I am afraid that I cannot comment upon it.

When my right hon. Friend next meets his EEC counterparts, will he raise with them, or urge them, or coerce them, or threaten them—I do not mind which—on the question of purchasing inferior quality beef from third countries? My right hon. Friend may be aware that that beef is required for manufacture, and that the manufacturing industries in this country will perish if he does not get this inferior manufacturing beef from third countries.

There is an important point here relating to what my hon. Friend calls inferior quality beef. However, it is tied up with the much wider question of a freer, more liberal importation into this country of beef from third countries in general and from Commonwealth countries in particular.

Will the Minister continue to derive support and encouragement in his work at Brussels from the assertion of the Secretary of State for Foreign and Commonwealth Affairs that this Parliament and the British people, when they consider it fit, are entitled to review the whole question of this country's membership of the EEC?

I do not think that that is a matter entirely for me, but I am interested to hear from the right hon. Gentleman what my right hon. Friend said on the matter.

Will the Minister accept that this is not a hypothetical question? In the event of our people not getting a 12-mile exclusive zone, will the Minister then stick out for a 50-mile exclusive economic zone?

I think that I made that clear in my statement on 22nd July, but it is perhaps worth reiterating. The position that I took up with my Common Market colleagues at the last meeting remains the position of Her Majesty's Government. We want to preserve the twin objectives of which I have always spoken to the House—conservation of fish and conservation of the livelihood of our people. If by being a little more flexible we can preserve those objectives, certainly we shall do so. If not, our original proposal remains on the table, and that is the proposal which our colleagues will have to deal with.

When the Minister next meets his EEC counterparts, will he discuss with them the malfunctioning of the co-efficient of MCAs and the grossly unfair methods of calculating these coefficients that has militated against the export of meat and lamb from Britain?

There are times when I think that this is practically the sole topic of conversation in Brussels. We discuss it again and again.

asked the Minister of Agriculture, Fisheries and Food what further measures he intends to take to conserve fish stocks within United Kingdom 200-mile limits.

asked the Minister of Agriculture, Fisheries and Food if he will make a statement about his further discussions on a common fisheries policy and British requests for adequate conservation.

I refer the hon. Members to the statement that I made on 22nd July when I reported to the House the outcome of the Council of Ministers (Agriculture) on 18th-19th July. We are continuing to review the necessary further conservation measures for safeguarding fish stocks and will not hesitate to press these when the Council resumes its discussions.

I thank the Minister for that answer. Does he appreciate that the fishermen on the South Coast of England, who have seen how the French and the Belgians have over-fished their areas, are concerned about this issue? Will he confirm that he has power to bring in conservation measures that affect all nations? Will he take such action as he considers necessary, appreciating that modern electronic devices do not really give the fish a fair chance?

I do not know about giving the fish a fair chance—it is the fishermen with whom I am primarily concerned. But the hon. Gentleman has put his finger—his fish finger—on an important point, which is that it becomes more and more clearly essential to preserve our national right to apply conservation measures. This must be the case whether or not I can negotiate a sensible permanent régime in the near future. That is something that it is vital for us to have. But that should not prevent us from looking at the sort of conservation measures that were, I think, implicit in the hon. Gentleman's Question.

Has my right hon. Friend noticed that Norway, which had the wisdom to stay out of the EEC, has obtained a 200-mile exclusive zone? Does he agree that if we had stayed out we could have done the same?

My right hon. Friend should be aware that I consider that we have a 200-mile zone. The waters up to 200 miles from the shores of these islands are our waters, as I have so often said to the House. They are under our sovereignty and under our jurisdiction.

Is the Minister not aware of the anxiety felt in the South-West about the future of mackerel stocks? Is he not also aware that last year double the quota recommended by his Ministry staff was fished? Can this situation go on?

The hon. Gentleman makes a valid point. I must confess that I and my officials are deeply concerned. We may, if we are not careful, see exactly the same thing happening to mackerel as has been happening to herring. We are therefore studying the measures that will need to be taken to protect what we regard as a valuable stock—incidentally, a stock that I hope the British housewife will become more accustomed to eating. In any case, this is a stock which will be a valuable trade-off in the future.

Is the Minister aware that he will receive widespread backing in the House if he takes and prepares further measures to ensure conservation within the areas that we recognise as being needed for our British fishing industry? Does he also realise that there is a danger to our excellent record of conservation if we fail to regulate the South-West mackerel fishery?

I thought that that was implicit in my reply. This is a matter that we are studying with a great degree of urgency. In this case study must lead to action. What is true in the South-West is true, in varying degrees, throughout the fishing areas around our shores.

Does my right hon. Friend agree that it is rather strange—indeed, most curious—that hon. Members on the Opposition Benches, including the Liberals, but principally the Tories, while complaining about the Common Market at present are actually acting as saboteurs of the European party which the Leader of the Opposition proclaimed in that so-called famous speech somewhere on the Continent recently? Does my right hon. Friend find it necessary to answer these questions? Why bother with them? They did not seem to matter when we entered the Common Market.

I ought not to act as an apologist for all hon. Members on the Benches opposite. As I look round, I see one or two hon. Members who at the time took much the same view as does my hon. Friend. But, on the main point, I think that it is right that these questions should be aired and points be put to me. The reason is that it strengthens my hand if I can say that, whatever the rights and wrongs and the history, the whole House and the country are determined, in a particular situation. If I can do that, it helps a great deal.

Does the Minister recognise that if we are to police our fishing grounds adequately we must have the ships to do it? In view of the drastic cuts in defence expenditure, will he make representations to his right hon. Friend the Secretary of State for Defence to ensure that sufficient funds are available to enable this work to be undertaken by the Royal Navy?

I have always believed it to be vital that we have an efficient and, if necessary, an expanded fishery protection service. I am sure that this is right, and I shall do my best to see that we have the means whereby we can protect our own fishery resources.

asked the Minister of Agriculture, Fisheries and Food, in the light of the industrial action being taken by the staff at the Central Veterinary Laboratory, Weybridge, in pursuit of their claim for London weighting allowance, if he will make a statement.

I have received a deputation of representatives of Ministry staff from the Central Veterinary Laboratory and am in communication with my right hon. and noble Friend Lord Peart.

Will the Minister accept that although the staff at the Central Veterinary Laboratory do not regard themselves as being in dispute with his Ministry they are looking to him to urge their case not only with his noble Friend but with his hon. Friend the Minister of State, Civil Service Department? Will the right hon. Gentleman accept also that although, no doubt, the staff will continue to exercise their customary sense of responsibility, if this work to rule continues after the holiday season it is likely to increase its impact to the detriment of the service provided by this world-famous establishment?

I also pay tribute to the staff. I think that they have behaved in a very responsible way. I regard myself, obviously, as having a strong interest whenever they feel a sense of grievance. I have put their points to my noble Friend and to my hon. Friend, but, as the hon. Gentleman rightly conceded, it is a matter that does not lie within my power except within circumscribed limits. Like the hon. Gentleman, I hope that the dispute will be settled soon.

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the increased expenditure by the EEC following decisions of the price review.

Information on the cost of the 1977 price fixing has been made available to the House in documents R/851/77 and R/1226/77. My aim at this year's price negotiations was to achieve the maximum restraint on common support prices and the increases finally agreed were the lowest for several years.

But is not the sum of £50 million, which, I think, we are due to receive for the butter subsidy, more than cancelled out by the £60 million that we have to pay in on the amended supplementary budget No. 1? That being so, does it not show that we should now stop this charade of financial obfuscation and move over to a national agricultural policy that is under our own control?

I hesitate to correct the hon. Gentleman's figures, but I understand that the butter subsidy is worth £65 million, not £50 million.

That is not what is said on the document I have here.

I think that that is, in fact, what has emerged. The other factor is the value to the consumer of the butter subsidy. I do not want to get dragged into the butter subsidy issue, because I know that that was not the main thrust of the hon. Gentleman's question, but it is a fact that the reduction of 10p per pound, which has been fairly widespread, has helped the British consumer very much, from the days when the hon. Gentleman and I thought that there might be an increase of 18p or 19p a pound, as he well remembers.

Can my right hon. Friend say whether this country has derived any benefits whatever from the £700 million per year that it has to pay to the common agricultural fund and, if so, what these benefits are?

If I were to answer this question directly, we should be involved in a very long debate. One would have to consider a balance, partly of advantage and partly of disadvantage. But I have to tell the House that an unamended common agricultural policy is one which, taking the balance, is not of benefit to this country and ought to be remedied.

Has my right hon. Friend taken note of the fact that, following the marvellous job he did in the price review of keeping the levels as close to small increases as possible, he may find himself this year dealing with a much worse situation, because it seems very likely that we shall have bumper cereal harvests, and we shall then be in an even more ridiculous situation vis-à-vis the intervention prices that have already been fixed?

I do not think that we can be hurt by having a heavy harvest. I think that it must be of help to livestock producers. But, in general, my hon. Friend is quite right, and it remains part of our policy—not the whole, but a part—that the price reductions that we started to obtain this year on institutional prices of commodities in surplus shall be continued and pressed on with.

Is the Minister aware that there are hon. Members—I hope on both sides of the House—who are getting increasingly tired of agricultural Question Time being used—not by the Minister but by certain hon. Members —to present tirades against the Common Market? Is he aware, further, that we need things from the Common Market and we shall not get them if we behave in what I am afraid to say is the ridiculous way in which certain hon. Members behave in relation to what was a democratic decision of the British people?

That is a very wide and philosophical question, but I thank the hon. Gentleman for the compliment that he indirectly but implicitly paid me. What he is saying, of course, is that my reasonable, courteous and gentle way of handling my partners in Europe has been successful.

Does my right hon. Friend agree that British farmers have benefited in general terms from the common agricultural policy? Can he say by how much they might have benefited as a result of the recent review?

To think of farmers as one collective mass is to give entirely the wrong impression. It depends upon the sort of farming being done. Some farmers have done better than others. I do not know that one could necessarily do a Gallup Poll on numbers. But one can survey farming sector by sector. In cereals, for example, there have been undoubted benefits. That is why I did not agree totally with my hon. Friend when he made his point. It is also true that the benefits to pig farmers have sometimes been illusory.

In view of the TUC-Labour Party liaison document published yesterday, which apparently has the blessing of the Prime Minister, in which it is said that deficiency payments shall be extended, will the Minister now say how much more expensive deficiency payments would be to the British Treasury if the same level of prosperity were to be afforded to farmers at the present time? Could it be three, four or five times as much?

To do that, one would have to quantify one basis against another, and it would be a very long calculation. But I cannot remember the Opposition Front Bench attacking—it was one of the few occasions on which they did not—when we managed to get the variable beef premium, which is our own deficiency system, made permanent for the whole year, and possibly permanent in history. Indeed, some Opposition Members have asked why we do not extend the system.

asked the Minister of Agriculture, Fisheries and Food what administrative priority is given within his Department to the preservation of good agricultural land.

The preservation of good agricultural land is one of the highest priorities of the Lands Group in my Department's Headquarters and the Land Services of the Agricultural Development and Advisory Service, in the field.

Since the Minister's Department objected to only 20 per cent. of the applications put before it last year and does not even know how many of those applications were subsequently refused, is it surprising that farmers do not really think that his Department takes its responsibilities seriously?

No. The hon. Gentleman is quite unfair in his attitude. It was this Government who, in 1976, placed a statutory requirement on local planning authorities to consult the Ministry of Agriculture if they intended to develop more than 10 acres of agricultural land.

In no way do I associate myself with the hon. Member for Melton (Mr. Latham), but does not my hon. Friend agree that present controls are inadequate to prevent the dumping of waste, the removal of topsoil, the laying of concrete and the desecration and destruction of good agricultural land by those people who have no scruples about environmental matters? Does he not think that it is time that the Ministry had another look at this situation? I believe that it is quite unsatisfactory.

I agree that this is an area in which we must remain eternally vigilant. We must also recognise that—I know that this is not what my hon. Friend is referring to, and I shall be happy to investigate the specific points that he has raised—the building of new schools, and houses where people can have gardens of their own, represents progress and increases our national wealth. The challenge is not to stop these developments; it is to see that they take place in a way that minimises the loss of agricultural land and, so far as is practicable, are directed to areas of land which are not of such high agricultural potential.

Will the Minister bear in mind that, particularly in the South-West of England, there are growing problems over the preservation of good agricultural land? In particular, will he note that there is the possibility of the flooding of hundreds of acres of land for a new reservoir at Roadford? Will he see that a determined effort is made to stop this sort of thing and to ensure that reservoirs are put where they should be—on Dartmoor, or on poor land?

I assure the House that the Government are determined to do everything possible to minimize the loss of good land from agriculture. I remind Tory Members that was their Government in 1971 who slackened the situation and weakened the power of the Ministry of Agriculture in these matters.

asked the Minister of Agriculture, Fisheries and Food what are his powers regarding land drainage in Wales; and if he will take steps to increase them.

My right hon. Friend the Minister's land drainage powers in Wales arise under the Water Act 1973 and the Land Drainage Act 1976 and are substantially the same as those in England. They are concerned principally with the execution of general policy, within the national policy for water in England and Wales, and administrative matters in connection with the land drainage functions of the water authorities, internal drainage boards and other drainage authorities.

Will the Minister have a look at the Gyffin drainage scheme, in my constituency, and consider whether his powers are adequate to deal with that situation? Does he agree that, in view of the delay on this scheme, his powers are inadequate?

I am reminded that the last time that I met the hon. Gentleman was when he took up with me the question of drainage at Llandudno Junction. I understand that since then work has been progressing satisfactorily, and I shall be very happy to investigate the other matter that he has raised today.

asked the Minister of Agriculture, Fisheries and Food what progress is being made towards the establishment of a sheepmeat régime within the EEC.

The Council of Agricultural Ministers discussed the matter last October. Since then discussions at official level have taken place. The Commission is expected to produce new proposals for a Community régime in the autumn.

Will the Minister confirm that if no changes are made from 1st January it will be illegal for the French to put a levy on our sheepmeat? Can he say how much British sheepmeat is reaching the French market through other EEC countries?

I do not have the figures available on the latter point, but I am aware of the situation in relation to the Irish pressure and the European Court case in connection with the French. What we want to avoid is any sudden change or disruption which would have an adverse effect upon the consumer and the producer.

What will be the position of the Minister's right hon. Friend when he goes to the Council of Ministers? What stand will he take on behalf of the British people? Has the Minister heard it said by some enthusiastic Europeans that the stand by the Minister on behalf of the British people has, in fact, harmed the Joint European Torus negotiations and delayed a decision on them? If that is so, is not the Common Market a very curious organisation?

I should not like to stray into the area that the hon. Gentleman has mentioned with regard to the JET project. All I can say with regard to the negotiations and the objectives of the British Government—and they are several—is that we want to protect the producer and give him confidence, we want to ensure that there are no unreasonable changes in prices which would affect the consumer, and we want to make sure that there is access for third countries. After all, the Community has to import one-third of its sheepmeat. At the same time, we want to ensure that our own industry can export to France and other countries in the Community.

Does the Minister recognise the urgency to establish a sheepmeat régime? What does he propose to do to regulate the trade in live lambs exported to countries such as Holland and Denmark, which are subsequently slaughtered and then sent in through the back door, as it were, to the French market, thus avoiding the levy that is presently paid by those producers who do the right thing and sell carcases from Britain to France?

These are problems of intra-Community trade. There is free trade among the six old member countries but not among the new three. We are seeking a policy of liberalisation of trade both inside and outside the Community. I take the point about the need for urgency in the matter to which the hon. Gentleman referred.

asked the Minister of Agriculture, Fisheries and Food what is the current level of the pig breeding herd.

asked the Minister of Agriculture, Fisheries and Food what steps he proposes taking to bring about a reduction in the subsidy received by importers of pigmeat by way of monetary compensatory amounts and so remove the present advantage to foreign competitors of British pig farmers.

The most recent available figure for the United Kingdom breeding herd is for April, when the number of sows and gilts in pig was estimated to be 827,000.

Does the Minister accept that there are few sectors of agriculture under greater threat than is pig production? The statement of the Minister's right hon. Friend has not exactly been optimistic with regard to the future. Does the Minister further accept that the only hope for the future now is a rundown of the industry, with higher prices through shortage, and that that will result quite directly in more import pressure and the eventual driving-out of the British pig producer? What will the Minister do about it?

The House will be aware of the considerable efforts that the Minister has made for the industry in the past, including the 8½ per cent. change in MCAs, the 2·9 per cent. change in the green pound, the subsidy—subsequently withdrawn—worth £17 million and, recently, the abolition of the ACAs, which, in relation to the Danish exporter, helps us to the extent of £42 a tonne. Those are some of the factors, but we are still pressing in the Community for a recalculation of MCAs. The possibility of much lower cereal prices and the better harvest should, of course, help the livestock industry generally.

Is the Minister aware that the MCAs are now working directly against the British pig producers? Will he tell his right hon. Friend that I regard it as his duty to go to Brussels the moment that the House goes into recess and not come back until he has sorted out the problem? He should seek to solve the problem of the MCAs in calculating a more proper subsidy to allow British pig farmers to stay in business. Will the Minister ask his right hon. Friend to start speaking up in the Cabinet for British farming and food production? If his right hon. Friend is not prepared to do that, will he ask him to resign?

In view of the catalogue of action and effort that my right hon. Friend has deployed in the past, to which I have just made reference, the hon. Gentleman will realise that no one has been pressing more forcibly for the British pig industry than my right hon. Friend. I am glad to know that the hon. Gentleman is behind us in this request—indeed, demand—to recalculate the MCAs. That is the position that we shall press with all the effort that we can.

Is my right hon. Friend aware that when he answers all these questions from Tory Members he could save a lot of time by just saying that their chickens are now coming home to roost?

Will the Minister admit to the House that the situation of the pig producers in this country remains grave and that unless a decision is made very soon the long-term future of the industry is in grave jeopardy? Will he, as Minister of Agriculture in the United Kingdom, take whatever action is necessary to ensure that the pig industry in this country remains a viable one, even if that means that we shall be temporarily unpopular with our European partners?

Poacher turned gamekeeper.

The hon. Gentleman will recognise that my right hon. Friend took unilateral action to help the pig industry and that he was then required to withdraw the subsidy worth £17 million. Whether the hon. Gentleman is suggesting that we renew the subsidy, I do not know. But I do know that the remedy is mainly in the hands of the Community. We have been pressing for the Community to take unilateral and urgent action on the lines that we have suggested.

Does my right hon. Friend agree that the slaughter of pigs cannot go on, because if it does the British pig meat industry will disappear? Does he further agree that the Danes will never be able to make up the shortfall? Therefore, will he bring back, unilaterally, a pig subsidy, despite the bleating and threats of the Common Market?

I am not sure that "bleating" is the right term for pigs, but I take the point. I have made very clear the fact that we were not in any way inhibited from taking action in the past, but we must now look to the Community. The strong views expressed on both sides this afternoon are an indication of the serious position facing the industry.

Does the Minister accept that this is now the single most serious matter within the agriculture industry? Does he further accept that the pig herd is now one-fifth smaller than at this time last year, and that individual pigs are losing money at the rate of at least £3 a head? Will the Minister indicate, as the House goes into recess for three months, what we should say to our pig producers about their future when they are losing money at this incredible rate?

With regard to slaughterings, there may be an indication that this is a peak in the pig cycle, and there should be a strengthening in the market. We hope and expect that the position regarding cereals and feedstuffs will be helpful to the industry in the immediate future. We do not need to be pressurised more on this matter, because the remedy really lies in the hands of the Community.

asked the Minister of Agriculture, Fisheries and Food what steps he intends to take to maintain the level of liquid milk consumption in the United Kingdom.

As my right hon. Friend the Chancellor of the Exchequer announced on 15th July, the subsidy on liquid milk is to be increased so that the retail price can be held at its present level throughout the rest of the year. The adverse effect of a price increase on the level of consumption will thus be avoided.

Is not this a complete reversal of Government policy on these matters? Are we not now having a sort of milk price yo-yo? Does the Minister agree that what is really needed is to see that the economic policies of this country are improved, and the unemployment situation improved, so that the consumer has enough purchasing power, rather than this constant yo-yo in prices?

I am sure that my right hon. Friend the Chancellor of the Exchequer, like myself, will wish to express his appreciation of the hon. Gentleman's support for our economic policy. With regard to the yo-yo-ing of price, it is not the down "yo', if I may put it that way, that matters. It is the up "yo" that matters. It is precisely for that reason that the subsidy was introduced.

As the level of the farm gate price is tied to the percentage of the milk produced that is sold in the liquid market, can the Minister tell us what steps he has taken to maintain the level of the farm gate price to farmers in Northern Ireland after 1st January next?

I cannot at the moment. I should like to be able to do so. Discussions are going on with all interested parties, including, of course, my right hon. Friend the Secretary of State for Northern Ireland and the Northern Irish interests. As soon as I possibly can I shall ensure that the House is kept properly informed

Will my right hon. Friend have discussions with the Secretary of State for Education and Science about the desirability of reintroducing school milk for those primary school children who do not have it, as that would not only be good for them in nutritional terms but would be very good for the dairy industry?

The provision of milk for liquid consumption is nutritionally of great importance to this country. It is why we have fought so hard and will continue to fight hard for any institution, like the milk marketing boards, which will protect the liquid milk market. I shall draw to my right hon. Friend's attention the specific point raised by my hon. Friend.

asked the Minister of Agriculture, Fisheries and Food whether it is his intention to apply for a derogation from the European Community for continued cheese imports to the United Kingdom from New Zealand after 31st December 1977.

The declaration by EEC Heads of Governments on 11th March 1975 established the framework for consideration of the question of imports of New Zealand cheese for the period after 1977, and I expect that this matter will now be considered by the Community in the autumn.

Does the Minister agree that the delay in finalising this matter is not only causing grave uncertainty to the British dairy industry, which has invested more than £50 million in cheese manufacturing plants, but must put our very good friends in New Zealand in a state of uncertainty? Will he please give an assurance this afternoon that the question of whether we are to allow further cheese imports from New Zealand into this country will be finalised at a very early date—and I mean weeks, not months?

We recognise the urgent need to deal with this matter, as indeed with other aspects concerned with the Community as a whole, but I stress that we should keep the matter in perspective. The New Zealand quota this year is only 15,240 tonnes. Last year we imported 70,000 tonnes of Cheddar-type cheese from other member States. Therefore, there is more cheese coming in from the Community than from New Zealand. But, of course, New Zealand has a special place in this matter, following the Dublin Heads of Government agreement of a few years ago.

Does my right hon. Friend agree that, although there is a great deal of substance in the complaints of Opposition Members regarding our membership of the EEC generally, many of the grunts and other farmyard noises that we have heard this afternoon are part of the frustration and anguish they are suffering because they rushed into membership so freely and quickly, without thinking?

I recognise my hon. Friend's usual lucidity in these matters. My right hon. Friend is going to Australia and New Zealand during the recess. I have no doubt that he will bear in mind some of the points made and will have regard to the position of New Zealand. I think there is anxiety about our need to produce more cheese in this country. This can easily come about, in view of the substantial quantities that we import from the Community.

Does the Minister agree that the common agricultural policy, with all its protection, is damaging our agricultural trade with New Zealand and Australia? Will he further agree that the effect of this is to harm the lives of people in the Commonwealth, in Australia and New Zealand, which is something we do not want to do?

I note the hon. Member's point. He will know of the loyal way the British Government have taken into account the special position of Australia and New Zealand. We shall continue to press upon the Community the special place that they have in our relationship and as potential suppliers of our needs.

Since it is now an established fact that the retail price of butter from New Zealand would be only 51 per cent. of the normal EEC price if it were allowed free price range, will my right hon. Friend tell us the equivalent percentage for cheese?

I shall write to my hon. Friend about that. The price that New Zealand gets for her products—butter, cheese or any other product—must be comparable with the rest of the price levels within the Community.

asked the Prime Minister if the public speech on prices by the Secretary of State for Education and Science at the National Liberal Club on 9th July 1977 represents Government policy.

In so far as my right hon. Friend's speech touched upon Government policy, the answer to the hon. Member's Question is "Yes".

How can it be the Prime Minister's policy both to support his right hon. Friend in her vigorous denunciation of the damage caused by constant critics of our EEC membership and, at the same time, to permit a quarter of his Government to vote against direct elections? When will he stop imitating Dr. Doolittle's push-me-pull-you, facing both ways at once? What steps will he take to remedy that damage, particularly in the light of the decisions taken yesterday by the Labour Party National Executive Committee?

The Government's policy on the European Community is quite clear, and I have nothing to add.

Has my right hon. Friend seen the recent statement made by the retiring Chairman of the Price Commission, who indicated that if there is a responsible approach to wage demands and prices there is a reasonable prospect of getting inflation down to a 10 per cent. yearly average by the end of this year? In that context, will he also look at a report in the Scottish Daily Record this morning, showing that in some instances the price of beer has gone up by at least 30 per cent. in the past year? Unless we tackle that problem, we shall not get the response from the trade unions that we desire.

I believe that my right hon. Friend the Secretary of State for Prices and Consumer Protection is looking into the matter of beer prices. Generally, it is the case that if there are moderate increases in earnings during the next 12 months the country can look forward to a substantial reduction in the rate of inflation. Let me just list for the House some of the contributions to this end. In milk prices, railway fares, gas prices and postal charges there will be no increase before the end of 1977. In electricity charges and telephone charges there will be no increase before the spring of 1978. That, together with the reductions in income tax, which will find their way into the wage packet during the month of August—including a lump sum, in two instalments—provides a most favourable climate for wage bargainers during the next 12 months. I believe that against that background, and despite the jeers of the Opposition, trade union bargainers will want to ensure that inflation does not go rampant again.

asked the Prime Minister if, further to his statement, Official Report, 7th July, column 1423, that the social contract was no longer intact and his answer of 13th July to the hon. Member for Chingford (Mr. Tebbit) that it was not broken, he will clarify the present status of the social contract.

Yes. [Interruption.] Yes. I thought that the hon. Member would be surprised. I refer him to the new statement that was announced yesterday, entitled "The Next Three Years and into the Eighties". This provides a renewed basis for co-operation between the Government and the Trades Union Congress.

Why does the Prime Minister think that his new piece of paper, which has no TUC commitment other than a reluctant aquiescence to the 12-months' rule, will succeed when the old, now defunct, contract, which had genuine TUC commitments, produced record unemployment, stagnant productivity and a disastrous slump in overyone's standard of living?

I have answered that question many times in the House, and I am not able to get the hon. Gentleman to accept the answer. But, in addition to the factors that I gave in answer to the last Question, allow me to add that the fact that sterling—which I have constantly described in this House as stable and which is now strong and moving upwards—is yet another favourable factor for wage negotiators. I would deny what the hon. Gentleman said about the trade union part of the contract being a failure last time, because there is no doubt, as I hope he will recall, that the £6 wage limit produced a very substantial decline in the rate of inflation during the first 12 months.

Will my right hon. Friend explain to the Opposition that the social contract was begun in 1972, extended in 1973 and carried right through to today? Will he further explain that it was never mainly about wages and incomes policy —although it was partly about that, at one stage—that it has never been dead, and that part of it involves the introduction at the earliest moment of a wealth tax? Will he also explain that there should be an extension of planning agreements, and that if they are not accepted by industry there must be a statutory back-up to them? Will he make it clear that Opposition Members, instead of making noises, ought to study the social contract and not talk the nonsense that they have talked in the past about it?

I am asked for a comment upon opinion and therefore I will give it. It seems to me that the Opposition demonstrate day after day in this House their total incapacity to understand that unless they get on terms with organised labour in this country, instead of appearing constantly in opposition to it, as they do—unless they recognise that our industrial society demands that cooperation—they are never likely successfully to govern this country.

Is the Prime Minister aware that one of the results of the social contract under Socialism is that the average family is now paying more, per week, in income tax and national insurance than it has left to spend on its food bills? When does he hope to reverse that situation?

The right hon. Lady continues to mislead the country about the necessity for a reduction in the national standard of life if we are to pay our way. When she starts to explain that, we may have less facile questions and explanations from her. I ask the right hon. Lady whether she will join me in urging trade union negotiators to be moderate during the next 12 months and to keep the level of their earnings increases within 10 per cent.

I shall gladly do that. Now will the Prime Minister answer my question?

I have answered the question. I shall answer the right hon. Lady's question again, although she knows the answer perfectly well. It is that this country, because of the increase in oil prices by four to five times, required a reduction in its standard of life. I have never evaded making clear that the Government took measures deliberately to achieve that. I hope that the Opposition, one day, will have a similar sense of responsibility. Now, I am glad to say, the period of the worst reduction is over and we can look forward to an improvement in our standard of life. I hope that the right hon. Lady, in her support for me—for which I thank her—on this matter of an increase in earnings, will include all groups, no matter who they may be.

With great respect, I do not think that the Prime Minister can have heard or understood my question. The question was: is he aware that under the social contract the average family is now paying more, per week, in tax and national insurance contributions than it has left to spend on food? Has he any plans to reverse that situation, which would mean having tax incentives to get the growth that the next stage of the social contract demands?

Very well. I shall try to give the right hon. Lady even more information than I have given her so far—[Interruption.]—if the animal noises coming from the Opposition will stop for a moment.

Will my right hon. Friend take this opportunity of further educating the Opposition? Since a major priority at the present time must be to reduce the appalling level of unemployment, will he point out to the Leader of the Opposition and to the country just how the policies of Adam Smith and free market capitalism affect unemployment rates in countries such as the United States of America?

I despair of educating either the right hon. Lady or the Opposition. I have spent the past 12 months trying to do it, with singularly little success.

In the process of education, would the Prime Minister like to tell his hon. Friend the Member for Enfield, North (Mr. Davies) that Britain was the star of the Common Market last month, contributing almost the whole total of the increase in unemployment throughout the whole Community? Would he like to make a note to himself, to keep by him, that since the October election the real net take-home pay of the average industrial worker, about whom the Prime Minister was talking, has fallen by more than £8 a week? Is that not a pretty fair subscription to pay for joining the social contract?

I have always regarded the hon. Gentleman as one of my least promising pupils, but during the recess I shall be very happy to conduct a seminar with him and any other of his hon. Friends that he cares to bring along.