asked the Secretary of State for Industry when he next proposes to meet the management of Chrysler UK Limited.

I have no immediate plans for a further meeting with the United Kingdom management of Chrysler Corporation.

Has the Secretary of State noticed that in 1977 Chrysler will not have made the £3·4 million profits estimated at the time of the rescue and will not have made the £300,000 profits estimated in the recent planning agreement, but is likely to lose £22 million, of which the British taxpayer will have to find £10 million? Can the Secretary of State at least give an assurance that there is no question of any more public money being given to this company beyond that set out in the existing agreement, and that it is now entirely up to the management and work force of Chrysler to make this a competitive concern?

Yes, I can give that assurance.

Is the Secretary of State aware that there is considerable consternation at Linwood over the decision announced last week by Chrysler not to build the new model for 1979 there? Does the Secretary of State recall that in col. 1559 of the Official Report for 17th December 1975 he gave me a direct undertaking that the model for 1979 would be produced at Linwood, and that it was on that basis that my hon. Friends voted for the order?

I understand that the model policy of Chrysler UK Limited is being discussed with officials in my Department. Proposals have not yet been put to me, but I hope to be able to say something about it in due course.

Will the Secretary of State confirm that the 13-point plan agreed by the company and its unions provided a satisfactory basis on which to go forward, including with the new model?

As the hon. Member for Rushcliffe (Mr. Clarke) said, the 1977 proposals have not been fully met, although it was always envisaged that they would be a struggle. The integration of Chrysler's European operations has been reasonably successful, but I hope that there can be improvements. I understand that at Linwood, for example, improvements have taken place over the past few weeks.

asked the Secretary of State for Industry what criteria he identifies as necessary to qualify industries for Government assistance by: (a) grant. (b) loan, (c) investment and (d) protection from overseas competition; and which category of assistance, and qualifying criteria, he identifies as applying to British Leyland.

Assistance to industry is provided according to statutory purposes and published criteria, in particular under the Industry Acts of 1972 and 1975. This applies to British Leyland, like any other company. Following the Ryder Report, British Leyland has received assistance in the form of equity capital and long-term loans.

Will the Minister of State give an assurance that the willingness of the Government to accept and not to funk the recommendations of the Edwardes Report will be a test of their credibility in attempting to get the economy into some sort of shape after four years of Socialism? Will he give an assurance that the Government will not throw good taxpayers' money after bad in financing car-making establishments such as Speke, which seem to be more like schools for industrial unrest than car plants?

The hon. Member should have referred to the first four years of Socialism. I do not think that it is up to the politicians to say what can be done. It is for the management to say how it will do it. It is then up to the Government to say how much money they will put in. That is what the Leader of the Opposition said when she visited Cowley two months ago. I do not know that I go that far, but, on the whole, she was on the right lines.

Will the Minister accept my congratulations on the brave and sensible words that he spoke over the weekend in support of the management of British Leyland? Will he, however, assure the House that on this occasion at least he has the support of the Prime Minister and the Cabinet and that he will not have to undergo a humiliating back-down?

The hon. Gentleman appears to be attributing to me words spoken by the Secretary of State, but I do not think that anyone in the House could quarrel with the statement that we must have a strategy for British Leyland which will arrest the decline and put it on a sound footing; that British Leyland will be managed by the management, not the Government; that British Leyland can succeed only on the basis of producing cars competitively, and so on. I think that those are universally accepted sentiments.

As well as giving the financial cost of sustaining British Leyland, will my hon. Friend say how many jobs are involved at British Leyland and how many jobs are involved in the private sector components industry which supplies British Leyland? Will my hon. Friend try to ascertain whether it is still the Opposition's policy that British Leyland should have gone into liquidation?

The Opposition are a bit bewildered about their policy on Leyland. They voted consistently against the rescue of Leyland, but, on the other hand, whenever there were by-elections in the Midlands, particularly Birmingham, they pretended that they were the saviours of Leyland. The Conservative Party would like to wreck a good deal of this country's manufacturing industry.

Does the Minister accept that the Opposition agree with the sentiments of the Secretary of State, if they are correctly expressed, in the weekend interview? We simply wait to see whether on this occasion he can carry the Cabinet and the Labour movement with him. At least, the Labour Party has realised the folly of the Ryder Plan, which appears to be being abandoned.

The Ryder Plan is being looked at again by the new chairman. [HON. MEMBERS:"Oh".] That is very sensible. Just as the Conservative Party, when it published its White Paper on steel in 1973, said that such plans had to be flexible and subject to the course of events, so with any industrial plan. I am glad to see that the Opposition are regaining a little of the flexibility that they lost between 1970 and 1974.

asked the Secretary of State for Industry if he will make a further statement on British Leyland.

asked the Secretary of State for Industry when he expects to receive a copy of the Chairman's review report into the reorganisation of British Leyland.

asked the Secretary of State for Industry when he will next meet the Chairman of British Leyland.

asked the Secretary of State for Industry when he last met the Chairman of British Leyland.

The Chairman of British Leyland will shortly be submitting a revised corporate plan to the National Enterprise Board, whose report I expect to receive in March. I meet the Chairman of British Leyland from time to time as circumstances warrant.

Does not my right hon. Friend accept that one of the major problems of British Leyland is reflected in the fact that the price of a new Mini has trebled over the last five years, in a period when the retail price index and average wages have risen by only about twice? Does he accept that this means that a smaller and smaller proportion of new cars has been bought by individuals?

Does not the Minister agree, therefore, that one of the solutions may be for British Leyland not to go up-market but to concentrate on automating its production of a more standard vehicle, which will maintain the labour at British Leyland by increasing throughput and reducing the real cost, and also perhaps meet the real need for this type of car?

I hope that the rest of the supplementary questions will be briefer.

I hope very much that the British Leyland management will have a model strategy which will command the support of the whole work force and will produce products which the British people will want to buy.

As we have the Secretary of State answering Questions and not the Minister of State, perhaps we shall have a more objective exchange of views. The "Easy Ryder Plan" has been totally overturned. Will the Secretary of State confirm that the report and recommendations arising from the new solution will have to be that much tougher now as a result of all that has happened, even if a no-strike agreement or a guarantee—putting it higher—with the unions is achieved in order to try to get back to a million vehicles per annum?

The National Enterprise Board and ' the Chairman of British Leyland have told me that they want to see the participation arrangements strengthened. The arrangements were set in train two and a half years ago, and they want to ensure that they have a successful company. It is true that two of the most important ingredients of the Ryder strategy have not been met, namely, the company has not held its share of the United Kingdom market and has not generated sufficient internal resources.

When he next meets the Chairman of British Leyland, will the Secretary of State point out to him the third criterion that the money advanced by the House was for capital expenditure and not for meeting recurrent costs? Will he inform us now whether any guarantee was given by himself or by the National Enterprise Board for the recent drawings by the company?

The recent drawings were discussed with my Department and I understand that they will be sufficient until about the end of March. Further financial requirements for British Leyland will depend on the revised corporate plan which is being discussed by the Leyland board and its work force for submission to the NEB.

When the Secretary of State says that he will give his unstinting support to the Edwardes Plan instead of the Ryder Plan, does that mean that he will give support when the going gets tough and there are proposals for redundancies, which may well be necessary, and, indeed, when plant closures may be found necessary, as the CPRS Report said in 1975? If he does, he is entitled to ask for the support of the Opposition.

I want to see British Leyland a successful company. I want to support all those in British Leyland, including the Chairman, who want to achieve objectives as a substantial British company, not only arresting the decline but improving its market share where it can. Unfortunately, that has not taken place over the last two years. I think that the matter is being tackled now and being discussed with the work force.

Will it not be difficult for a chairman, whatever his qualities and qualifications, who is on relatively short secondment from another company and therefore quite secure, irrespective of what happens to British Leyland, to obtain full co-operation from managers and workers whose jobs he is putting at risk? Does not this critically difficult task demand a man of longer and deeper commitment?

I have said publicly that I support Mr. Edwardes's appointment. Not only do I support it, but the whole of the National Enterprise Board does, including the four senior trade union leaders who are members of that board. The best way of securing jobs in British Leyland is to ensure that there is comparability of performance and continuity of production. That is what Michael Edwardes wants to achieve, as does the vast majority of those who work in British Leyland.

In view of the obvious difficulty for the Government of managing nationalised industries—we are coming to the subject of steel later in Question Time—what does the Secretary of State think of the proposal of the National Executive Committee of his party for a huge expansion of nationalisation, both of industries and firms, in Labour's "Programme for Britain 1976"?

I am always in favour of the fully worked out policies of the Labour Party, especially those expressed in the manifestos of 1974.

What will be the repercussions on the reorganisation of British Leyland so far as its overseas investments and commitments are concerned, especially in South Africa?

I know that my hon. Friend has some Questions on this matter on the Order Paper for answer later this week, but I understand the Board of British Leyland is reviewing all its operations, both at home and abroad.

Will the Secretary of State now answer the second question of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller)? Did he personally, on behalf of the Government, give a guarantee for any of the recent loans to British Leyland from the banks, totalling £50 million?

It is not my responsibility. That responsibility rests with the National Enterprise Board, and these arrangements, I understand, are satisfactory to those from whom the loans have been received.

asked the Secretary of State for Industry what production output, in terms of vehicles per employee, has been achieved by British Leyland in the past year.

I refer the hon. Member to the National Enterprise Board's report on the performance of British Leyland which my right hon. Friend provided to the House on 25th July 1977.

Can the hon. Gentleman confirm whether it is correct, as has been reported, that the equivalent Japanese output is 43 vehicles per man per year, which is an enormously higher figure than ours? Is not this difference in output really the key to the future of British Leyland?

While it is true that some of the productivity levels of some of our main competitors are higher than at British Leyland, I should warn the hon. Gentleman that direct comparison is not exactly of like with like because we are not necessarily talking about the same vehicle types.

asked the Secretary of State for Industry if he is satisfied with the increase in British industrial productivity since March 1974.

asked the Secretary of State for Industry in what respects he has so far achieved the overriding objective of improving Great Britain's industrial performance.

asked the Secretary of State for Industry whether he is satisfied with improvements in output by British industry since the implementation of the industrial strategy.

Despite the deepest world recession for 40 years, genuine progress has been made in establishing conditions in which British industry can do well at home and abroad.

Is the Minister aware that, according to the figures which I received from his own Department since his party came to power in March 1974, the United Kingdom is the only major industrialised country to have merely staggered back to where it was in terms of manufacturing output per employee at that time? Does this not underline the damage done to industrial productivity in this country by the mistaken and sometimes vindictive policies of his Government, especially during the first two years of their term of office?

The overwhelming message that came from the 40 sector working parties in the industrial strategy was that the essential prerequisite for solving the problems of industry was getting the economic climate right. I draw the hon. Member's attention to an item in the Observer yesterday which made the point that shares and reserves were up, the pound was up, inflation was down, interest rates were down, medium term loans were at their lowest rate for a number of years, the country was earning its keep for the first time for many years and foreigners were putting money into this country. [HON. MEMBERS:"Oh."] I know that the Opposition do not like this. The IMF has indicated that we are making better progress than expected. That is the assessment not of some wild Socialist but of Barclays Bank in its advertisement.

Does not the right hon. Gentleman agree, however, that our industrial performance is still disappointing and that without the benefit of North Sea oil the position would not be as cheerful as he and his colleagues are constantly making out? Against this background, will he try properly to answer the question put by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph): what is the right hon. Gentleman's attitude to the proposals for the extension of Government interference as outlined in the Labour Party's "Programme for Britain 1976"? We did not hear what the Secretary of State thought about them.

I clearly heard at our last Question Time the views of the right hon. Member for Leeds, North-East (Sir K. Joseph). Let us bear in mind that what he said then was that, for example, the Government should not be giving financial support to successful private enterprise, in which case the recently announced Ford project would be taking place in Ireland, not in Britain. The right hon. Gentleman further indicated that he deplored support for the steel and shipbuilding industries and that he would have sold out Chrysler and British Leyland. That is what the Conservatives would do for British industry.

What is the purpose of the industrial strategy if it is not to achieve a sizeable increase in output and make a dent in the appalling unemployment figures that the Government have produced?

The Opposition seem signally unaware that we have been in a major recession, just as the rest of the world has. The industrial strategy must, of course, be directed to a long-term improvement for industry. It is a medium-term to long-term policy. On 1st February there will be a discussion in NEDC on the latest proposals which will be coming from the sector working parties. The interim reports were that by 1980 they were capable of improving their market performance by £3,000 million. That is what the industrial strategy is about.

Does my right hon. Friend agree that British industrial productivity has been unsatisfactory since 1884? Is it not true that the problem has nothing to do with one party or the other but results from a weakness in private enterprise in this country?

It is a valid contention that productivity in this country has suffered from the alternating stops and gos of our economy under successive Governments, Labour as well as Conservative. This has affected the investor's and the working man's attitude to new investment. What is important is that last year investment rose by 7 per cent. One can say—making certain calculations for the final quarter—that in real terms investment last year was higher than in 1972 and in 1973. As I have continually pointed out to the Opposition, they never managed to achieve again the levels of investment achieved in 1970.

But does the right hon. Gentleman think that the proposals in Labour's "Programme for Britain 1976" will make matters better or worse?

Those were proposals for discussion. The Labour Government's policy is spelt out in their manifesto. As our record has shown this time, it is then carried out during the period of Labour government.

On a point of order, Mr. Speaker. Is it not an established practice of Question Time that an hon. Member should be given notice if his or her Question is to be coupled with that of another hon. Member?

I think that it is a normal courtesy. The Minister may have slipped up. I do not know.

Is my right hon. Friend aware that the Labour Party's "Programme for Britain 1976" is a projected programme for the future, and it does not necessarily follow that it will have to be carried through in this Parliament, though it is party policy? Will my right hon. Friend also explain to the Opposition that the United States, West Germany, France, Italy and most of the European countries are not run by Labour Governments but their percentage of unemployment is higher than that in this country?

No. Rubbish.

It is worth re-emphasising the point that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has made that unemployment is high throughout the Western world. This is an international phenomenon to which the Opposition wish to turn a blind eye. If the right hon. Member for Leeds, North-East (Sir K. Joseph) wishes to make any constructive points on this matter, I shall be glad to hear from him. All that he has said on industrial policy in the past few months has been destructive and would add to the levels of unemployment.

Does the Minister agree that the self-employed and small businesses can play a significant role in improving economic conditions and creating new employment? Will he take steps to set up a fund in Scotland, using a portion of Scottish oil revenues, as venture capital to set up new businesses, and will he abolish the discriminatory 8 per cent. levy on the self-employed?

In his recent Budget Statement my right hon. Friend the Chancellor of the Exchequer made various alterations favourable to small firms. The Scots have their own Scottish Development Agency, with its own resources, which can establish its own priorities and will soon be responsible to its elective council.

asked the Secretary of State for Industry what is the total sum that has been made available to the private sector of industry from public funds in the form of grants and concessionary-rate loans since February 1974.

It is estimated that since February 1974 payments of about £1,062 million for grants and £126 million for concessionary-rate loans have been made under the Industry Act 1972 to the private sector of industry. The total figure of £1,188 million is at out-turn prices and is net of repayments. In addition, £557 million in the form of regional employment premium has been paid over this period.

Does my hon. Friend agree that these are sensational and formidable figures? Is it not apparent that some sectors of private industry would not have survived long without public support? Has my hon. Friend had any word about the Leader of the Opposition's intentions should her party ever achieve power again? Would she long tolerate this degree of public support and public subsidy?

My hon. Friend will appreciate that the Opposition's policies, such as they are, are a matter for them. However, it would appear, from the occasional glimmerings of their policies that we receive, that they are prepared to cut public expenditure substantially in all areas except the individual constituencies of Opposition Members. They display their hyprocrisy by condemning public expenditure nationally but being quite happy to see it increase when they wish to make individual representations about firms in their constituencies.

Does the Minister accept that while the schemes exist the private sector would be mad not to take full advantage of them? What estimate has he made of the total involved on the many occasions when these sums need not have been taken up if private money had been sought?

There have been many occasions on which private money has not been available or has not been available until the Department has made a gesture or given an indication that a grant or loan would be available. There is much that is unsatisfactory about the private money-raising market in this country. That is one of the aspects of the unsatisfactory performance of British manufacturing industry. There is no doubt that but for Government support in, for example, the clothing and textile industries, through temporary employment subsidy, those industries would have been in grave difficulties.

Can my hon. Friend give some details of the amount of help given to private industry through the temporary employment subsidy? In view of the important help that this has been in recent months, will the Government resist the EEC demands that the TES should be suspended?

The matter is under consideration, but the view of both sides of industry which have made representations, including the unions, is that TES has been very important for the continued survival of many jobs, particularly in the clothing and textile industries, which are still our third largest employer, and also in a wide range of jobs. Those are considerations of the sort that the Government have very much in mind.

Will the Minister give the House figures for the amount paid by private enterprise to the Exchequer by way of corporation tax, rates paid by companies and employers' national insurance contributions? Does he agree that in total the amount vastly exceeds the figure mentioned and that without such payments there would not he any subsidies to other companies?

No doubt the hon. Member will table a Question for detailed answer on that point. It is worth pointing out that there is a 100 per cent. tax allowance on investment in plant and machinery, which costs just over £2½ billion per annum. Rates are allowable against tax, which is not the case for the private individual. The hon. Gentleman's argument bears rather closer examination than he suggests.

asked the Secretary of State for Industry whether he plans to nationalise the Hull Telephone Department.

My right hon. Friend has given his consent to an interim extension, to 30th June 1978, of the licence from the Post Office under which Kingston upon Hull City Council operates its own local telephone service, and is considering carefully the issue of a new long-term licence.

Is it not highly desirable that the Hull telephone service, which is cheap and profitable and which has achieved a percentage of home installations nearly twice as great as the GPO, should remain independent to provide comparison and a stimulus to innovation to the Post Office's statutory monopoly?

Clearly the hon. Gentleman has come a long way since he voted against the Bill introduced by my hon. Friend the Member for Luton, East (Mr. Clemitson) which sought to extend the powers of local authorities in relation to commercial trading activities. I welcome the hon. Gentleman's conversion to municipal socialism.

asked the Secretary of State for Industry what is the latest estimate of the amount of industrial investment in 1977 in: (a) the public sector and (b) the private sector; and how these figures compare with the corresponding period in 1976.

With permission, I will circulate the information in the Official Report.

Does my right hon. Friend agree that the Labour Government should set an example in industrial regeneration by steadily increasing investment in the public sector of industry? Why, then, is it that in the latest public expenditure White Paper we have the proposal that between 1978 and 1982 there should be no growth in the budget of the National Enterprise Board and a decrease in the amount of spending by the Scottish and Welsh Development Agencies?

The figures are based on an analysis of what has been required in the past and on the finance available.

Will the right hon. Gentleman also publish in the Official Report the return on these investments in the public and private sectors? Does he accept that unless there is an adequate return no further jobs will be provided?

The hon. Gentleman will know that in instances of Government assistance in rescue cases an assurance of viability is sought. He will also know that the NEB, as with the Scottish and Welsh Development Agencies, is expected to make a commercial return on its investment.

Does not my right hon. Friend agree that unless we restore the public expenditure cuts, and indeed go further and put more money into public expenditure, we shall never be able to solve the unemployment problem?

Questions on general public expenditure levels should be directed to my right hon. Friend the Chancellor of the Exchequer. Up to June of last year an extra 100,000 jobs had been created in manufacturing as a result of the policy of giving assistance to industry.

Is not this "industrial investment" merely taxpayers' money? Should not this House decide, and make it clear when it makes its decision, that the investments are made in the expectation of there being a profit to the companies concerned—and, as a result, increased taxes—or are they merely a form of industrial social security?

I am at a loss to understand how the hon. Gentleman as a member of the party which abandoned investment grants in favour of a tax allowance system, can say that investment under his party's system was not taxpayers' money.

Does my right hon. Friend accept that, although there is a general need to stimulate investment in the public and private sectors, there is a particular need to stimulate investment in areas of high technology—[HON. MEMBERS: "Why?"]—where we can still maintain our lead over the semi-industrialised nations, such as Korea?

Despite the displays of incredible ignorance from the Opposition, I certainly endorse what my hon. Friend has said. This is one of the lessons that has come from the 40 sector working parties which have put forward proposals for industry schemes in those sectors where they felt that Government help was particularly relevant. Computers and electronics are cases in point, in which industries we face intense periods of development and overseas competition.

Now that the question of unemployment has been raised from the Government Benches, may I ask the right hon. Gentleman to take this opportunity to correct his hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and to tell the House that on the Government's own figures—I take no joy in this; I state the fact—unemployment in this country is now significantly higher than it is in Germany, America or France—

It is not true.

I am quoting the Government's own figures. Will the right hon. Gentleman confirm this? Will he also confirm that the higher unemployment is the direct result, in the view of many people, of hostility towards enterprise practised by the Government, particularly in their first years of office, under the influence of the part of the Labour Party to which the hon. Member for Walton belongs?

It is difficult to reconcile hostility to enterprise with the right hon. Gentleman's frequent complaint that we give too much money to profligate private industry. I point out that our hostility has taken the form of £1,300 million worth of Section 8 assistance, most of which has been opposed by Tory Members. The right hon. Gentleman says that he takes no joy in the unemployment level. May I also say that he takes no constructive attitude? Over the months we have not had a single constructive suggestion from the Opposition Front Bench on how more jobs can be created.

asked the Secretary of State for Industry if he will give a general direction to the Post Office Corporation not to charge additional sums for installing new telephones in certain districts of big cities over and above the normal charge of £50.

No, Sir. But I understand that the Post Office is consulting the Post Office Users National Council on this matter.

Is it not astonishing that many residents or applicants in whole districts of a town are not able to have a telephone installed unless they pay an additional deposit of £37 or more on top of the £50 installation fee? Is my hon. Friend aware that, as a result, many people cannot have telephones installed? Is this not a blatant unfairness since it is the poorest people who have to pay more than others for a telephone, and since the telephone industry is a highly successful nationalised industry with a large surplus?

I know that my hon. Friend lays stress on this point. There is concern on both sides of the House about the fact that there appears to be discrimination by area. It is because of this that the Post Office and the Post Office Users National Council are jointly studying the problem.

Is my hon. Friend aware that some local authorities which pay the rental charge on telephones for disabled people are taking a share of the £7 bonus which has been given to all telephone subscribers? Does he realise that the local authority in my constituency is proposing to keep the whole bonus? Will he look into this matter and ask for guidance from the Post Office so that local authorities may reach a fair agreement with telephone subscribers?

I am grateful to my hon. Friend for raising that matter, because I know that there is concern about what some local authorities have been doing, particularly in connection with telephones provided for the chronically sick and disabled. If my hon. Friend will let me have further evidence on this matter, I will gladly look into it.

asked the Secretary of State for Industry if he will list those powers he possesses under the Industry Act 1975 which have not yet been used.

Since the answer is lengthy, will, with permission, circulate the information in the Official Report.

I thank the Minister for that reply—which gives me little material for a supplementary question. May I ask whether he can give any indication of those areas in which powers are not being used and say why this is so? In particular, has the failure to use the powers been due to a lack of finance? Is he satisfied with the powers that exist for the setting up of public sector ventures or joint ventures on a 50–50 basis?

The reasons for the nonuse are twofold. The first is that some of the powers are of a comparatively trivial nature—for example, the power to vary by direction the accounting year of the NEB. Secondly, they may relate to matters considered during the passage of the Bill as being important, reserved matters—for example, the question of ownership by foreign enterprises of British firms which might involve some strategic or other relevant factor. A combination of these two aspects is responsible for the situation. The amount of money which has been advanced to the NEB, in the face of opposition from the Conservatives, has been considerable, but there is always room for improvement. The NEB has been not unsuccessful in making the sort of investment envisaged for it.

Will my hon. Friend assure the House that among the reasons why these powers have not been used there is not a reason to the effect that the Minister does not agree with his having the power in the first place?

No.

asked the Secretary of State for Industry whether he is satisfied with industrial progress in the Northern Region.

We shall continue to promote industrial development in the Northern Region.

Will my right hon. Friend make a statement about Swan Hunter and the Polish order? Does not he agree that, whatever the difficulties may be at Swan Hunter, the good industrial relations record and the high quality of the labour force make the Northern Region an ideal place for investment?

The shipbuilding situation is unchanged as reported by British Shipbuilders at the weekend. I endorse my hon. Friend's recommendation of his area for industrial investment. I am sorry that we recently lost an investment project which was to have been scheduled for his locality.

Will the right hon. Gentleman confirm that the Northern Region has benefited considerably from the infra-structural spending, loans and grants from the EEC through the European Investment Bank, the European Coal and Steel Community and the Regional Development Fund, without which it would not have fared so well, albeit under difficult conditions? Should not the Government therefore be less churlish about the EEC and be keener to help build up the Community institutions and allow more money to be spent in this way?

I am glad to agree about the role of the European Regional Development Fund and the European Investment Bank in our regional work. As far as the Regional Fund is concerned, the question of the non-quota section has important long-term considerations, and there has been a less than adequate indication of how that section would be used and how its use would be monitored. We have asked the Commission to come forward with further information.

Is it not the fact that, if unemployment begins to decline in the rest of the United Kingdom, the unemployment level in the Northern Region is usually left stranded high and dry like a whale on a beach, and that if such is the situation again, despite the progress that has been made, there will be strong criticism of the Government's failure to provide an effective regional policy?

My hon. Friend will recognise that regional policy can operate only in the context of world growth. The international recession is not, unfortunately, within the control of an individual Government. My hon. Friend will also appreciate that recently there has been considerable discussion, stimulated by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer, to try to stimulate greater growth in the world economy, which is a prerequisite to getting our own economy moving.

Is it not generally unfair that the Northern Region should receive from the Regional Development Fund three times as much assistance as the North-West receives, although the percentage of unemployment in the North-West is higher than it is in the Northern Region?

It is difficult to draw such a comparison because the North consists predominantly of special development areas, since it has such high concentrations of unemployment. The hon. Lady must be careful in what she says on behalf of the North-West. For example, if one takes the gross unemployment figures, one finds that the South-East, strangely enough, becomes the area with the greatest problem.

asked the Secretary of State for Industry if he has yet received any requests from the British Aerospace Corporation for assistance in launching a new civil airliner.

Apart from the special limited provisions of Section 45, the concept of launching aid for new aircraft has been ended with the Aircraft and Shipbuilding Industries Act 1977.

Is the hon. Gentleman aware that I asked him not whether any launching aid had been requested but whether any assistance had been requested? Unfortunately, it seems that he can think of no form of assistance except money. Can he say now whether British Aerospace has yet approached him for any assistance of any sort in launching the HS146 airliner, which he led the workers in the industry to expect would be launched last year?

I am not sure what other kind of assistance British Aerospace could ask us for. It has far better designers than we could provide in the Department of Industry, for example, and its technicians are very good. British Aerospace is involved in collaborative discussions with our potential partners in Europe. What the hon. Gentleman simply cannot get into his head is that collaboration implies joint decisions with partners. We cannot launch our part of the aircraft without the launching of the rest as well. One has heard of flying on a wing and a prayer, but this is ridiculous.

Is my hon. Friend aware that, in the present unemployment situation at Hatfield, there is urgent need for a decision on the HS146? When is such a decision likely to be made?

I shall give some information to my hon. Friend when her Question on the subject is reached later.

In pursuit of the Prime Minister's stated aim that all new civil aircraft projects must be commercially viable, should not British Aerospace at least be prepared to consider co-operation and collaboration with American companies?

I agree with the hon. Gentleman. Indeed, British Aerospace has been involved in discussion with Boeing, McDonnell-Douglas and Lockheed. These are potentialities which must be considered before new projects can be decided upon, as well as discussions with our European partners.

asked the Secretary of State for Industry what proposals the Government have to assist the electronics industry.

The Government are already engaged in providing assistance to the electronics industry over a wide front and in developing further means of promoting its competitivity.

Does not the right hon. Gentleman agree that the industry can cope for itself, given a reasonable environment? Is he aware that leading industrialists have recently said that the major problem of the industry is recruiting and maintaining the best of its staff in the environment of the top tax rates in this country, which drive people abroad, as against the attractions of Government service, which offers a decent salary rate and safe, index-linked pensions?

I do not agree with the second part of the hon. Gentleman's supplementary question, but when I met the industry's representatives on the last occasion they pointed out that, in competition with other industries, it is finding difficulty in obtaining the high quality personnel that it needs for both the production side and for research and development. I indicated my willingness to discuss the matter further with them.

asked the Secretary of State for Industry if he will take steps to offer greater inducements to private and nationalised industries to provide new manufacturing jobs in the South Yorkshire districts where large pockets of high unemployment have existed over a number of years.

South Yorkshire already benefits from substantial Government assistance to industry, including selective financial assistance, regional development grants on buildings and advance factories. The latest advance factory programme, announced in November, included three units in Goldthorpe and one in Barnsley, which will help areas with high unemployment. The Government do not consider that an increase in the incentives already available would be justified.

Does my hon. Friend realise that, no matter what the Government have done over the past few years, there has been no help towards combating the large unemployment that exists in these pockets, especially in the Mex borough and district employment exchange area? If the present system cannot be of benefit in reducing unemployment in such areas, should the Government not consider South Yorkshire as a special development area? If that cannot be done, let us have mini-special development areas, such as Mexborough, where unemployment is very high.

All parts of the country are experiencing higher levels of unemployment than are acceptable because of the general economic situation, and that is undoubtedly influencing the position in South Yorkshire. But the incentives available have done something to counteract the situation. In Mexborough, for instance, there have been 12 projects which have received offers of regional selective assistance and are expected to create some 800 jobs. We are constantly examining ways to combat the level of unemployment. It depends to some degree on private investment by private enterprise in an economy which is largely private enterprise, and our incentives and inducements are an attempt to provide that investment.

Will the Under-Secretary agree that it is uncertain whether regional policies will do anything to help depressed areas such as South Yorkshire but that it is overwhelmingly certain that regional policies do a great deal of harm to once properous areas such as the West Midlands?

The regional policies have been undertaken in this country for many years, and certainly since the last serious depression in the 1930s. It was because of the very high levels of unemployment which occurred in the regions—for example, on Merseyside and Tyneside—that successive Governments have introduced regional policies. There is no question whatsoever that if there had not been a progressive regional policy developed and maintained by the present Government unemployment in those areas would have been a great deal worse than is complained of at present.

Did my hon. Friend see a BBC North programme on television last year called "No Jobs for Spanner", filmed in the South Kirkby area in my constituency, where young male unemployment is over 12·8 per cent.? It is all very well announcing advance factories but what is wanted is real assistance such as has been suggested by my hon. Friend the Member for Dearne Valley (Mr. Wainwright).

I understand very well the representations of my hon. Friend the Member for Hemsworth (Mr. Woodall), and this is a very serious matter, but the fact is that already very large and significant sums of assistance are being given. South Yorkshire was rightly included in the advance factory programme, and we shall have to see just how well these situations work out and whether private enterprise answers the call which my hon. Friend and other hon. Members are making for investment to take place in order to provide jobs.

On a point of order, Mr. Speaker. Is it not unfortunate that no Question has been reached on the subject of the steel industry and the great problems affecting the British Steel Corporation?

The hon. Gentleman's point of order should be raised at the end of Question Time. I point out to him that we reached Question No. 21.

I beg to move,

That this House, believing that it is as much in the interests of the consumer as of the producer to sustain the livestock industry, calls on Her Majesty's Government to devalue the Green Pound forthwith by 7½ per cent.

Whatever the result of tonight's vote, at least the Opposition parties can take away a degree of satisfaction—that our concerted action has forced the Minister at last to do something. The Government have made a move. It is not as large a move as we require but at least it is bigger than anything that was contemplated before. The Minister should blame himself that he is now being forced to do something more drastic because he has dragged his feet for such a long time.

The green currencies are hardly the subject for light conversation. They do not arouse a great deal of interest except among those who feel that they are immediately affected by them. The green currencies were invented as a transitional measure to ease the adjustment of countries to changes in the market values of their currencies. It was never the intention that they should be used to insulate the food prices of any member State against the effect of an enduring and substantial drop in the value of its currency nor was it intended that they be so used indefinitely. No other country has allowed so substantial a discrepancy to exist between the two currencies for as long as has the United Kingdom.

There have been advantages and disadvantages. I should like to take up a little time weighing one with the other. The advantages have been shared between our own consumers and the Continental and Irish livestock producers. The disadvantages—and in my view they outweigh the advantages—have been shared between the European taxpayers, including ourselves, our own producers and the nation, which has had to accept an addition to its food import bill of £1 billion in 1977 and £2 billion since 1974.

I do not seek to gloss over the fact that there has been some gain to the consumer. But the verdict on this gain—which seems to be marginal—cannot be passed until the full price is known of what the consumer may have to pay in the future. The Minister would have been better advised if he had sought greatly to close the considerable gap between the green rate and the real rate. We believe that he was wrong to allow anything like this large gap to become part of the fabric. If he had gradually closed the gap he could have avoided the drastic step that is suggested in the motion. This is the minimum step. Others would go further, but this is the minimum action required to have a useful effect.

I should make one matter clear. It would be wrong to lay down a detailed and tying programme for the elimination of the remainder of the discrepancy. Nevertheless, we should aim to eliminate something, which will do grave damage if it is allowed to continue, over the next two or three years.

There have been some rather exaggerated reactions to the suggestions that we have put forward. Some of the estimates were so instantaneous that they gave the impression that those who made them had given them little thought and given no thought at all to those most hurt by the present situation.

Nothing will occur in a hurry. There are stocks to be used up. It takes a long time before a farm price increase works its way through to the shops. I am sure that the Minister will be in a better position than I to give an estimate of the effect of the 5 per cent. that he is contemplating but I believe that it is likely, when it is fully felt, to add up to about 1 p in the pound on the food index.

I should like to call the attention of the House to what seemed to me to be a responsible and balanced statement by Sir Hector Laing, which was endorsed by 14 major food companies—although no doubt farmers will complain that it does not take account of their troubles. Sir Hector said:

"Green Currency rates are intrinsically undesirable as a permanent feature because of the distortion of trade which they cause. It however, these rates were adjusted too rapidly, there would be significant and sudden price increases in a number of major items in our national diet, which could create problems in our first national priority—the fight against inflation.

The question of timing is therefore all-important, but in reaching a decision, the Government has a responsibility to pursue policies which allow all links in the food chain—farmers, processors and distributors—to be sufficiently profitable within a competitive climate to invest at a level which will ensure the best possible value to the consumer."

It is our complaint today that the Government have most lamentably failed to give the producer and some of the processors their proper turn. I have no doubt whatever that many livestock producers who have criticised the motion which we have put forward today will point with some envy to other industries which—even after enduring the bias and bad manners of the Price Commission—have not failed to recover a larger share of their increased costs than they have.

The European producer has been the chief beneficiary of all this. He has been given a perfectly splendid armchair ride into our market. The Government's failure over many months to make a substantial move on the green pound has assured the Continental producer—I ought not to exclude the Irish producer—of a payment of a very substantial amount from the Commission. That payment is called the monetary compensatory amount and is a figure which is calculated according to formulae of quite fiendish complexity which I shall not go into now. [Interruption.] The hon. Member for Feltham and Heston (Mr. Kerr) speaks for himself. He is very much given to speaking for himself and that sort of immediate reply is so characteristic of him.

The effect of the MCAs has been to restore to the foreign exporter the 30 per cent. or so by which the pound fell in value as against other currencies. Meanwhile, our own producers have received no such benefit. They have been paying in pounds which have been through the wringer of inflation and they are realising that there is no recovering their cost increases.

In these circumstances it is hardly surprising what happened to imports. I referred just now to the large increases which have taken place since 1974 and in particular to the increase of —1,000 million in our food imports last year. Butter in Germany has a wholesale price of about —1,000 a tonne more than that which prevails here. German butter, which used to be imported here in quite negligible quantities just a few years ago, has now reached a sizeable imports proportion of 50,000 tonnes or so. [Interruption.] I know how Labour Members like to go back to the original argument about why we are in Europe at all. I hope very much that instead of repeating that old fashioned argument with which they feel thoroughly familiar—I know they are fond of repetition—they will listen and try to take account of what is now happening to one of our very important industries. They should also take note of the fact that Irish beef imports into this country have about doubled in value in 1977 alone.

I turn to bacon. The Danish share of our market is now likely to go up from about 43 per cent. to 48 per cent. The Dutch share is increasing. This leaves the pig producer of this country with a share of his own market which is hovering around 40 per cent. and going down.

In the circumstances created by the Government's obdurate policy of refusing to devalue the green pound, the MCAs have reversed the natural order of things and countries with strong currencies have been protected from imports while those with weak currencies have been exposed. In other words, it has been exposure for the weak and protection for the strong—the very reverse of what one would wish. It is not true to blame the common agricultural policy. It has been brought about by the Minister's own failure to recognise the facts.

Tell the truth for a change.

The hon. Gentleman should take that advice himself. It is the hon. Gentleman's misfortune that he is unable to stop talking and it is our misfortune that we cannot stop hearing him.

I now turn to the European taxpayer, who deserves some mention as he has been paying quite a substantial contribution to our food costs. It has been averaging more than £1 million a day, and in such a context it deserves mention. The question I should like to ask the Minister is how he reconciles so mendicant an attitude with the recent boasts which some of his colleagues have voiced about the new economic strength of this country. It is decent that we should pause and ask ourselves what our reaction would be if other countries were to seek to take us for this kind of a ride.

The motion today is intended to call attention particularly and seriously to the situation of our livestock industry and of the processors of its products as well as to the damage which has been sustained by that industry and with which it is now threatened by present policies. We are not just commenting upon the roughness of their situation; we are saying that the effects are such as to involve risks and dangers to the consumer which ought not to be accepted.

In our view the producers and processors have had a very galling experience of seeing their own market taken over not by people whose costs were lower than theirs but by people with higher costs. They have seen their competitive advantage taken away as a result of MCAs which were payable as a direct consequence of the Minister's refusal to devalue the green pound.

In view of the disputation about responsibility, and the responsibility of the CAP, may I ask the right hon. Gentleman whether he listened on Saturday morning to the chairman of the NFU for the West Riding who, when introducing a forthcoming conference this week, said quite clearly and in definite terms that many farmers did not realise, and were not told when they were taken into it, what serious disadvantages would result from entry into the Common Market?

I think the situation was very fully explained to them at the time. I am glad that the hon. Gentleman has at least listened for a moment to someone speaking from a point of view which he does not share. It is against his habit. I think it worth while that the hon. Gentleman should, from time to time, remind himself that his own party made a big meal about renegotiating the terms of entry. If Labour Members failed to achieve their objectives, that was not our fault. They have no one to blame but themselves.

Is the right hon. Gentleman aware that, under the system devised by the Conservative Government it has been possible for some considerable time to export live cattle from Great Britain to Holland and Belgium, where they are slaughtered, and receive a 13p per lb. subsidy, to process them there, and then for us to reimport them?

That is the green pound.

I gave way to the hon. Member for Derbyshire, North-East (Mr. Swain) for a number of reasons. The first is that I rather like him.

Is the right hon. Gentleman trying to stab me in the back?

My second reason was that I thought that I could do with a bit of a rest. But I can assure the hon. Gentleman that I never expected from him a useful and constructive intervention to add to my own argument. I am very grateful to the hon. Gentleman, who has made a further contribution to a friendship which I value.

I return to the wholesale price of beef in Ireland. The price there is 129p per kilo deadweight. Here the comparable price is 110p. The United Kingdom producer's competitive advantage is more than swept away by an MCA of 29½p. Then, if we look at pigmeat prices, Denmark's is 11 per cent. above ours, but an MCA of nearly £250 per tonne on bacon again removes the competitive advantage of our own producers. I have referred already to butter which is coming in from Germany in large quantities and which in any normal circumstances would be hopelessly uncompetitive.

It is as well that we at least look in passing at the producers' reaction. That reaction is best measured by what they have started to do, which we believe may prove the beginning of a very serious consequence for us all. First, in-pig gilts are down by 27 per cent. Secondly, in-calf heifers are down by 12 per cent. There are fewer cattle and calves than in any of the last five years. There are fewer pigs than in three out of the past four years, and the pig breeding herd at the end of 1978 is likely to be the lowest for 16 years. As the Minister himself has admitted, the processors of pigmeat are having a miserable time, with bacon prices down and with fewer pigs available to them. Such recovery as there has been in agriculture must be judged against the background of two drought years. But the livestock producer has for the most part been fenced off and not allowed to participate in its recovery as a result of MCAs and increased imports which have held down his market.

In these circumstances, what judgment should one make of Government policy and of Ministers who, less than three years ago, put forward the document "Food from Our Own Resources", to which still they pay a sort of pale, watery homage when they are challenged on the subject?

I propose to quote some extracts from that document which seems highly relevant:

…a continuing expansion of food production in Britain will be in the national interest."

That appears in paragraph 4, which goes on to say that this

"would remain economically valid, whether or not the United Kingdom decided to stay within the European Community."

The point is made in paragraph 12:

"An expanding home agriculture would also provide the basis for a bigger…food processing industry…a…high level of agricultural activitiy would be of benefit to United Kingdom supplying industries, particularly agricultural machinery production"—

all of them sources of employment and as such to be cherished by Ministers.

The document also contains in paragraph 21 this little gem:

"The Government are in broad agreement with the Farmers' Unions on the order of magnitude of the increase in output which it is feasible to obtain by 1980."

Increases in the cattle herd to 15·4 million or 16·3 million were put forward. The figure then was 15·2 million. Now it is 13·8 million. The Minister will have an awful job rewriting "Food from Our Own Resources" without confessing that he and his colleagues have been guilty of fraud.

My right hon. Friend does not want to rewrite "Food from Our Own Resources". He wants to rewrite the CAP.

In composing this document, the Government had two factors in mind—comparative costs in resource terms and, in paragraph 22, the risks to the economy, which is the one which concerns the Opposition, in terms both of import prices and the reliability of supplies involved in a relatively high level of dependence upon imports. I need not remind the right hon. Gentleman again of the unacceptably steep rise in imports which took place last year as a result of his policies.

However, Ministers have now jettisoned their earlier and more prudent judgment. They have shown themselves now to take risks which previously they regarded as unacceptable, and all the signs are that that new readiness is because of very unrespectable reasons. They are hoping simply to stay where they are, in office if not in power.

I make one more quotation from "Food from Our Own Resources". It states in paragraph 23:

"…it is not enough to rely on the expectation of future market price movements to bring about an expansion of production. If farmers are to invest…they need a degree of assurance about their future returns."

I have no doubt that, when those words were used, they were used in good faith. The trouble is that that good faith has proved infinitely perishable. Ministers have neglected subsequently to do what they promised, and the Minister himself is given to a somewhat casual use of words.

I anticipate that shortly the right hon. Gentleman will go on to congratulate my right hon. Friend on getting assurances out of the European Commission about the security of the Milk Marketing Board as one way of demonstrating that producers need a forward look at the business in which they are engaged. However, before the right hon. Gentleman comes to that, will he comment on the fact that at the heart of the problem in the pigmeat industry is not the green pound but the way in which the European Commission and the other eight nations so far have refused to have any proper calculation of these MCAs to take account of high cereal imports?

I congratulate the hon. Gentleman much more on his optimism than on his perception, but I am glad that he reminds me of the point about MCAs, which I should have included in my speech. I shall deal with it now. We have repeatedly put to the Minister that if, at a much earlier stage, he had himself been willing to accept a reasonable measure of devaluation of the green pound, he could then have had a recalculation of the MCAs.

I challenge the Minister to produce satisfactory evidence that that allegation is unfounded. If he can produce the evidence, I shall gladly withdraw it.

The time when the right hon. Gentleman should gladly have withdrawn it was several months ago, when I spoke about this to the House and quoted from the letter which I had received from the Danish Government in which they said that the two issues were not in the least related and that they were going to fight against a recalculation of MCAs.

My point is that, when the right hon. Gentleman attained his present office and first started arguing about this matter, he had a chance, had he been willing to devalue the green pound, to get from the Commission and his colleagues an agreement to discuss the whole basis of the calculation of MCAs.

If the right hon. Gentleman cares to look back—I forget how many months ago it is now—the letter predates any argument we had about the green pound.

If that is the best the right hon. Gentleman can do by way of rebuttal of the charge which I make and of the suspicions which we harbour, I find it unacceptable.

I return to one of the right hon. Gentle-mans most remarkable performances, when he attended the Farmers' Club. I did not have the privilege of attending, but I recall that he referred to the occasion last week in the House, even quoting from what he said, which I found rather surprising, in view of the reports which we had heard about it. I quote now from the right hon. Gentleman's own Press handout:

"We have all had to suffer cuts in our expectations, although I believe the Annual Review White Paper, which I expect to be published tomorrow, will show that farming net income held up well in real terms in 1977."

Having already had sight of the White Paper which was to appear the next day, the right hon. Gentleman might, I suggest, have felt it incumbent upon him to refer to these words:

"When stock appreciation is included, aggregate net income increased by 28 per cent. to £1,835 million in 1976 and is expected to have fallen by 2 per cent. to £1,796 million in 1977. In real terms a 10 per cent. increase between 1975 and 1976 is expected to be followed by a fall of 15·5 per cent. in 1977."

I am sure that the right hon. Gentleman has a facile explanation available for that, but nevertheless I believe that, in talking to the Farmers' Club, he would have been well advised, since he was referring to the White Paper, to refer to real incomes. He would have been well advised to include that sentence in his speech.

We put down the motion because we sought to express our belief that the Government have treated our livestock industry in a way in which no other European Government would have treated their livestock industry, and they have treated our livestock industry in a way in which they have themselves treated no other industry in this country. In our view, by so doing they have taken grave risks which involve not just producers, not just other industries and the balance of payments, but those consumers for whom the Government so busily claim to care so much.

My right hon. and hon. Friends and I believe, and I think that other Opposition parties believe, that the Government have fully earned—and I very much hope that they will receive—the blame of the House of Commons tonight.

I should have informed the House that I have selected the amendment in the names of the Prime Minister and his right hon. Friends.

I beg to move to leave out from "House" to the end of the Question and to add instead thereof:

recognising the special difficulties of the producers of pigmeat and beef, approves the action of Her Majesty's Government in requesting the Commission to propose an immediate devaluation of the Green Pound by 5 per cent. as part of a move, in the course of 1978, to increase the net income of such producers by 10 per cent., an amount which corresponds to the guidelines figure in the Government's incomes policy.

Before discussing that amendment, put down in my name and those of my right hon. Friends—[HON. MEMBERS: "Where are they? "]—one or two are around—and the motion to which it relates, I wish to spend a minute or two on the two Commission documents Nos. R /2601 /77 and R /2651/77, which deal with the whole question of green currencies.

Document No. R/2651 is a Commission report on the use of the European unit of account in the common agricultural policy, and Document No. R/2601 proposes that monetary compensatory amounts be phased out, subject to certain limitations, over seven years.

At the moment, we still retain effective national control over the timing of changes in our representative rate. There are obvious advantages in this situation. There could, however, also be advantages in applying the EUA to the common agricultural policy. In Brussels I have so far taken the line that decisions on these two points must be taken jointly, since decisions on the unit of account to be applied, in effect, determine the level at which prices must be aligned. I have to tell the House, however, that it is already clear that there is very little prospect of either the EUA or automaticity—[An HON. MEMBER: "What?"]—being agreed by the Council. I shall spell it for the hon. Gentleman a bit later.

The motion and the amendment bring together three important and related questions. The first is whether the agricultural industry as a whole is in so difficult a position that an immediate devaluation of the green pound by 7½per cent. is required, as suggested by the Opposition. Second, if that is not the case, is the livestock sector in a position where it needs special help, and, if so, what should that help be? Third, if the livestock industry is in difficulties, are they of such gravity as to justify measures which would harm other important parts of the national interest, such as the consumer interest?

As to the first question, we all know how the Opposition's motion originated. It resulted from the pressure of the right hon. Member for Worcester (Mr. Walker), who, in a rather unexpected foray into the agricultural arena in December, gave as his reasons for urging the use of a Supply Day for debate that the industry's output under the Labour Government had fallen by 23 per cent. and that therefore this motion would attract all the Opposition parties to vote against the Government.

I believe, incidentally, that the right hon. Gentleman kindly offered to use his undoubted influence to ask the Irish and Danish Governments to pay my ministerial salary, but I can only assume that his endeavours in that respect have met with no success and that in consequence I must just soldier on without payment from anyone.

It is perhaps, a little unfortunate from the point of view of the Opposition's strategy that the Annual Review was published on 12th January and that it does not live up to the expectations of right hon. Gentlemen opposite. The fall in output in 1976 was, of course, the direct result of the worst drought this country has suffered in 500 years, and if right hon. Gentlemen opposite wish to blame us for the fall in production that resulted from that, it seems only fair that they should give us equal credit for the rise in output of 25 per cent. in 1977 that followed, with the help of the better weather of last year.

That rise was so dramatic that it gave the agricultural industry as a whole the best year's production for four years—very nearly a record.

Last year, labour productivity reached a record level. Cereals production was also at a record level—some 3·7 million tonnes greater than in 1976; milk production was at a record level—about 41 per cent. up on 1976; sugar beet is expected to yield nearly 1 million tonnes of white sugar; and potato production has increased by more than a third.

Now, all these results are excellent, but I suspect that most people will tend to judge the matter by one other criterion. They will look upon the income of farmers as the best test of all. Excluding stock appreciation, this figure in current money terms represents an increase of 16 per cent. in 1977.

Bearing in mind that if it is 16 per cent., that is 6 per cent. over the norm that the Government have laid down, would it not be right to say that that is a very good argument for no devaluing of the green pound at all?

I hope that I can convince my hon. Friend a little later why it is necessary to have a devaluation of the green pound.

Will the right hon. Gentleman be kind enough to read the whole—

I am sorry, I had not finished dealing with my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee). I hope to come to that point in a little while. I have a suspicion that most wage earners—whatever their occupation—also, like farmers, regard themselves as a special case, as doing work that is of value to the economy, and would have been delighted with an increase of that order in the same period.

Instead of being so selective in his quotation from paragraph 34 on page 7, perhaps the right hon. Gentleman would read the whole paragraph, which shows exactly how badly farmers have done in real terms.

If the hon. Lady calms down a little, she will realise that in 1977 we were in the depths of our economic difficulties and that there was not a section of the country that did not have to make a sacrifice, and that a fall in real terms, not just a small increase, was common to everyone. If the hon. Lady is referring to the question of stock appreciation—because I said "excluding stock appreciation"—I should be delighted to give her a very short lesson on the subject. It is this: stock appreciation, which is a traditional method in accountancy, anyway, is always excluded from the net income, for the reason that it is calculated purely on the basis of the costs incurred by the producer or whoever it may be and it is not related to what the actual sale price would be. That is why stock appreciation is removed from the figures. If the hon. Lady does that, she will find that my figures are quite correct and that the income has increased by 16 per cent.

What about disposable income?

The Minister is attempting to justify his incompetence by quoting average figures of earnings. Will he tell the House now what advice he has received from the smaller dairy farmers and mixed farmers, particularly those in such areas as Derbyshire, about the income decline that they have suffered?

I wonder whether the hon. Gentleman was listening at the beginning of my speech when I said that there were three questions that we needed to answer —the first relating to farmers as a whole; the second relating to the livestock industry, in which the hon. Gentleman's dairy farmers will figure quite prominently, I promise; and the third relating to the consumer. I am at present on the question of the industry as a whole. Does it not follow from what the hon. Gentleman is saying that if dairy farmers are not doing well, the increase in net income of those who are not in the livestock sector must have been even greater?

Great play has been made of the argument that investment is falling, although in money terms it increased by 18 per cent. Taking volume of new investment in plant and machinery, the trend over the past three years has remained pretty stable at the high level of 1974. It is true, however, that investment in buildings and work fell in volume by 5 per cent. in 1977, but, given the lower incomes in 1976, the year of the drought, this is hardly surprising. The fall in interest rates, the higher incomes of 1977, the end of deferral of capital grants, and the general improvement in the economic climate will in turn, I think, favourably affect investment from now on. Indeed, we have evidence that this is already happening.

Will the right hon. Gentleman give way?

I think that this will have to be the last occasion on which I give way for some minutes.

I am most obliged to the Minister for giving me the last occasion for some minutes. When I have asked my question, it may well be the last occasion for some hours.

Instead of relating the figure to artificial figures of average income, and that sort of thing, will the Minister give the House these figures? How many tonnes of malting barley has one had to sell to buy a tractor in 1970, 1971, 1972, 1973, 1974, 1975 and 1977? How many tonnes of beef does one have to sell for the same thing? How many gallons of milk does one have to sell? The right hon. Gentleman should relate it to the product and not to an artificial general figure.

The hon. and learned Gentleman will also have access to the Annual Review and 1 have no doubt that, given a little assistance, he can work those figures out for himself.

That the agricultural industry as a whole is in difficulties we can therefore dismiss—and both the Opposition motion and the Government amendment tacitly accept that, since both limit their wording to the livestock sector. Here, indeed, we come to the heart of the matter, for what is at stake—I agree with the right hon. Member for Yeovil (Mr. Peyton)—is the continuance of United Kingdom production or the surrender of our market to foreign competitors.

No one knows better than I do the difficulties which result from the unfairly high level of the MCA subsidy paid on our imports of bacon and other processed pigmeat. Our EEC competitors, of course, can sell bacon in our market at a price which gives them a good return but is too low to allow our curers to trade profitably and pay producers their price for their raw materials with the inevitable result of declining production and increasing unemployment.

On beef, the greatest problem comes from the high MCA on Irish exports of carcase beef and live cattle. We must not overstate this problem. Part of the reason for the extra quantities is an unexpected increase of 14 per cent. in slaughterings in 1977 in export abattoirs in the Irish Republic. And we have seen similar quantities of Irish supplies on our market in previous years without the degree of concern that has been expressed this year. But I agree that last summer and autumn the availability of Irish beef with a large MCA undermined wholesale prices in the United Kingdom.

I accept that an unstable market hinders producers in forward planning and is better avoided if possible. This has been the basis for my continued advocacy of a dual system of support with premiums rather than intervention alone. In brief, I believe we must act now if we are to avoid a massive take-over by foreign interests of these two basic British sectors.

Those national measures, which were at the disposal of my predecessors before we joined the EEC, are no longer available to me. Even the pig subsidy which I gave to the industry last year was, as the House knows, ordered to be ended by the European Court. Changing the basis of calculating MCAs, which I have consistently fought for, requires the unanimous consent of the Council of Ministers to a Commission proposal. There is as yet no Commission proposal and there are unfortunately other countries which have a vested interest in the present method of calculation. All I can say is that I intend to keep fighting.

In the circumstances, and in the absence of the ability to take other national measures, the only possible remedy is to devalue the green pound. A large devaluation of the green pound would clearly help our pigmeat curers and processors. It would adjust the MCA payments on imports and would probably lead to an increase in the market price for bacon and other products. It would also be welcomed by beef producers who hope that by reducing MCAs it would stimulate better market prices.

But, as my hon. Friend the Member for Cannock (Mr. Roberts) said on Thursday, the green pound is a blunt instrument. In the first place, it must apply throughout the United Kingdom, although problems may differ in various parts of our country. There are specific problems in Northern Ireland, for example and the Government have tried to give selective help, for example, by the meat industry employment scheme. But I reject out of hand any suggestion that there should be an all-Ireland green pound.

In the second place, the effect of devaluation itself is uneven in agriculture. Devaluation means rises in feed costs for all livestock producers. For those whom the devaluation does not provide an automatic increase in returns, the position is even more serious. The cost of producing eggs and poultry would go up and these producers will not experience any countervailing benefits. I know that the British Poultry Federation is concerned at the effects an overlarge devaluation would have on consumption.

If a large devaluation is of doubtful benefit to large parts of the agricultural industry, its effect on the consumer would be brutal. The argument of the Opposition is that a large devaluation is good for consumers because it is in their interests to increase home production of food. I certainly share the belief that we should produce more of our own food, but that is a view that does not always go unchallenged in Brussels. However, I am not prepared to agree to so large an increase in the price of food that, while production of food is encouraged, its consumption is positively discouraged. Is that not exactly what is wrong with the present workings of the CAP?

As I said earlier, I have been pressing for over a year for the recalculation of pigmeat MCAs. I still believe this to be the right solution and will continue to pursue it. But in present circumstances, a modest devaluation has become our best option.

Can the right hon. Gentleman explain why a 5 per cent. devaluation is good and a 7½ per cent. devaluation is bad?

I do not believe that the latter is necessary at this time. We are talking about a devaluation now. I have tried to explain that we are seeking a fundamental recalculation of the pigmeat MCAs. In addition, there are price fixing proposals that will be examined in Brussels in the coming months. It would be absurd to make too large a devaluation now. We might overshoot the mark, and the only victim would be the consumer.

Why did the right hon. Gentleman not listen to the advice from my party? He could have made a start by devaluing at 1 per cent. a month and, at any time, he could have said "That is enough".

That was a totally wrong solution in the circumstances, particularly since at the end of 1976 we had a more urgent task than looking after the whims of the hon. Gentleman. We had to look after the economy of the country as a whole and see that food prices, which were going up by about 20 per cent. at that time, were kept under as strict a control as possible.

Will my right hon. Friend give way?

No. I have given way quite a lot. Hon. Members will have to wait a bit longer before I give way again.

A 5 per cent. devaluation will help pig-meat processors by reducing the MCAs on bacon by £43 per tonne—about 18 per cent. I judge it right to make this devaluation despite the effects on pig producers' feed costs because it will help processors. Pig producers' returns have started to improve in recent months, but the squeeze on the processors has grown more severe and, taking account of all their problems including the effects on employment, I believe that the position must be relieved.

The devalution which I propose will also have benefits for beet production. It will offer producers the prospect of better support levels in the future and should counteract the present fall in the beef herd. It will reduce the MCA on Irish beef by just under 3p per lb.—about 20 per cent.—and will help to firm up the market. In my judgment this change, taken together with the recent 4 per cent. increase in the buying-in price as a result of the last transitional step, is sufficient to stabilise the market without undue effects on consumption.

Can my right hon. Friend give a more precise indication of his belief about the impact of the changes on imports of bacon from Denmark and meat from Ireland? What will be the percentage reduction in each case?

It is difficult to say. There is no doubt that an 18 per cent. reduction in the MCAs for pigmeat and a 20 per cent. reduction in the Irish MCAs will be a very positive step.

It is appropriate here to consider the Early-Day Motion of the Liberal Party calling for a 10 per cent. devaluation, not immediately but over the next 12 months. In fact, of course, neither the Opposition motion nor the Government amendment excludes such a proposition. But I should like to put two points to the Liberals. In the first place, they would, I think, agree with me that whatever devaluation is made now must be done as selectively as possible, so that it is for the benefit of livestock producers above all and does not whittle away the advantage to them by putting up their costs. Secondly, if that is the case, factors such as a change in the calculation of MCAs would be more effective than a further green pound devaluation.

As to the first point, I have proposed to the Commission that the devaluation should apply immediately only to the livestock sector and that all the other sectors should wait until the start of their marketing year. In the case of cereals, this would mean a postponement until 1st August next. This gives us the necessary time to keep the whole position under review until the later summer—well within the 12-months period suggested by the Liberal Party.

In making this proposal, I have weighed carefully the effects on consumers. I am very reluctant to make any increases in food prices, but I believe that the case for beef and pigmeat is now overriding and that consumers are better placed to cope with the price increase because we are now getting inflation under firm control. I estimate that the effects of the 5 per cent. devaluation phased in the way I have proposed represent an increase of 1 per cent. on food prices in 12 month's time.

Given the difficulties of the livestock industry, I am sure that the Government's decision is the right one. It is the privilege of official Oppositions to table short-term opportunist motions such as the present motion before the House. It is for the Government to make their decisions on the basis of what they genuinely believe to be in the interests of the nation. The Opposition, whoever prompted them to do so, have had their little fling in tabling this motion. Let them now get out of the way and enable us to carry out the real strategy of radical change in the CAP that is so urgently required. I ask the House to reject the motion and support the Government's amendment.

The Minister has told us that he is aiming for changes in the CAP. The House will recollect that when the Government came to power in February 1974, the previous Conservative Government, with my right hon. Friend the Member for Grantham (Mr. Godber) as Minister of Agriculture, had already initiated discussions for changing the CAP.

Negotiations have continued. My right hon. Friend was trying to change the CAP in a way that would improve the position for our farmers and housewives. No doubt this Government also have that aim in mind, but the net result of 3½ years of their abortive efforts is that the changes in the CAP have not improved the position but have made it worse. Therefore, I cannot take off my hat to the right hon. Gentleman as a negotiator. I am not impressed in the slightest by his suggestion that we should now leave it to him to carry on with the good work. It is surely far better that the House, on the advice of all parties, should now express its opinion on what should be done and for the Minister to take note of that opinion after tonight's Division.

I ask the Minister a straight question, and I am prepared to give way to him if he will answer it. If the decision of the House tonight is in favour of a 7½ per cent. devaluation of the green pound, will he modify his approach, go to Brussels and meet the wishes of the House by asking for a 7½ per cent. devaluation? If he will not do that, does he propose to resign? I give way to the right hon. Gentleman.

I think that the right hon. and learned Gentleman deserves a rest. Perhaps he will explain in the course of the debate on what basis he thinks that the Conservative Opposition's motion will win.

I seek refuge in a famous and ancient expression—namely, that the right hon. Gentleman should wait and see. I am prepared to wait and see as well. However, I am convinced that, in accordance with normal parliamentary practice, the House is entitled to know where it stands and where the Minister stands before the decision is taken tonight. I am surprised and sorry that the right hon. Gentleman has ducked this vital question in this vital debate.