Butter (Eec-Soviet Agreement)

– in the House of Commons at 12:00 am on 11th April 1973.

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Photo of Mr Peter Shore Mr Peter Shore , Stepney 12:00 am, 11th April 1973

(by Private Notice) asked the Minister of Agriculture, Fisheries and Food if he will outline the terms of the agreement between the EEC and the Soviet Union on the sale of butter and whether this was approved by the Council of Ministers.

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

I understand that the European Commission has approved the sale of 200,000 tons of butter now in the hands of intervention agencies of the six original Member States at a price ex-store in the Community of about 30 units of account per 100 kg. This is equivalent to £141 per ton. The decision was within the competence of the Commission, based on the advice of the Management Committee for Milk and Milk Products. It was not referred to the Council of Ministers.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

I thank the Minister for that statement. Does he not agree that this is a singular example of the total lunacy of the common agricultural policy in continuing to generate these enormous unwanted stocks of butter and then disposing of them—not selling them to the consumers of Britain and the other Member countries but selling them at dumped prices in third markets? Does he not also agree that the loss of £110 million, which is what we understand is the difference between the compensation paid to the farmers who produced the butter and the amount that will be received from the Soviet Union, is a fantastic figure? Will he please tell us whether the British Government will have to contribute to it?

May we have an assurance, since we continue to import butter from Poland, Rumania and other East European countries at rather more than that price— indeed double the 8p per lb. at which we are now selling this butter to the Soviet Union—that the same butter will not be re-exported to us at double the price? Is it not an absolute disgrace that a matter of such importance should not even go to the Council of Ministers but should be handed over for a decision to a number of unenlightened despots who would speak in our name, without any mandate from the British people in Brussels?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

If I may take the last question first, the constitution provides for the views of Member States on the disposal of butter to be given to the Management Committee. If the latter takes an unfavourable view, the matter then goes to the Council of Ministers. The views of the Management Committee were favourable on this issue, by a majority, and so no reference went to the Council of Ministers.

This is one of the features of the common agricultural policy which needs changing. This undesirable feature has been highlighted by this deal. We have always recognised that the common agricultural policy has these weaknesses— [Interruption.] I remind hon. and right hon. Gentlemen opposite that the principles of the common agricultural policy were accepted by the Labour Party.

I am not certain as to the precise figure but our share is limited in 1973 to 8¾ per cent. of the cost. I can assure hon. and right hon. Gentlemen that one of the conditions of the deal is that the butter must not leave the Soviet Union and come back here.

Photo of Mr James Scott-Hopkins Mr James Scott-Hopkins , West Derbyshire

Does my hon. Friend not agree that one of the results of the present confrontation and the negotiations in Brussels and Luxembourg between the Minister of Agriculture and the other Member States is a thoroughgoing review by the Commission of the workings of the common agricultural policy? Will he tell us whether one of the issues which will be reviewed and discussed will be this kind of sale of surplus production at a loss? Is it not right that we should try to keep down this surplus production in Europe and thus to bring down prices?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

I suggest that our highly successful experience of running a pretty balanced agricultural system in this country will be of great use in the Community. How we could have brought that influence to bear until we joined the Community I do not know.

Photo of Mr Edward Milne Mr Edward Milne , Blyth

Is the hon. Gentleman aware that this is at least one answer for which he does not deserve a pat on the head? Is it not a fact that about £100 million of British taxpayers' money will be contributed towards the decisison to sell butter to Russia? Will he note that Northumberland housewives, who are having to pay about 28p per lb. for butter, are prepared to negotiate with the Ministry for the same price as the butter being sold to Russia?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

The hon. Gentleman is totally inaccurate in most of what he says. He is 25 per cent. out in his quotation of the price of butter in Northumberland. Even to mention the figure of £100 million as the cost to the British taxpayer is sheer rubbish.

Photo of Mr Charles Morrison Mr Charles Morrison , Devizes

Is it not a fact that by far the greater proportion of this butter was produced before this country had any influence on the common agricultural policy? Does my hon. Friend agree that changes in that policy are much more likely to occur quickly if Conservative Members of Parliament serving on the delegation to the European Parliament are supported by hon. Members opposite?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

The answer to both questions is "Yes, Sir."

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

After this performance, does the Minister think that the common agricultural policy requires any further condemnation?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

I am quite convinced that the common agricultural policy can produce as balanced a system of production as did the deficiency payments system.

Photo of Mr Enoch Powell Mr Enoch Powell , Wolverhampton South West

Was any view on this subject expressed by or on behalf of Her Majesty's Government and, if so, what was that view?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

Our representatives on the Management Committee abstained from voting—[HON. MEMBERS: "Resign."]—because, as my hon. Friend the Member for Devizes (Mr. Charles Morrison) said, all the stocks had accumulated long before we joined the Community. The responsibility was not ours and that was why we abstained from voting.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

Does not the Minister recall that throughout the long debates on the Common Market legislation the Government were warned time and again that this butter surplus was accumulating and that they made light of it, rather than preparing a policy for the occasion when they could have expressed an opinion and voted against it? Is it not clear that this mad policy will have to be abandoned without delay? Must not all those who voted for these terms on which to enter the Common Market, without warning the British people about what was going to happen, now accept the grave responsibility for treating the people in this way?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

No, Sir, I do not agree.

Photo of Mr John Hill Mr John Hill , South Norfolk

Should we not get this matter in better perspective if we agreed that this amount sold to Russia represents about two months' production, that it is being sold to Russia at about two-thirds of the world price, and that it is inherent in the common agricultural policy—which the Labour Government when negotiating agreed they would have to take on board —that those surpluses in the ordinary way are sold at world prices. Is it the situation that the measure of loss is about one-third of the world price—about £14 million, which would be less than the cost of storage for the next 18 months? Does my hon. Friend agree that it is better in this case that the butter should be disposed of to the Soviet Union, rather than that it should be dumped on the world market, which would injure the interests of New Zealand?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

My hon. Friend is entirely correct in the prices which he quotes. While I agree with him that we should get the matter in perspective, I still think that this is something on which we must bring all our thoughts, wisdom and experience to bear to prevent this happening again.

Photo of Mr Emlyn Hooson Mr Emlyn Hooson , Montgomeryshire

Are we to take it that the question of surpluses did not arise in the negotiations and that Her Majesty's Government in no way discussed what to do with surpluses?

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

Well, the hon. and learned Gentleman voted for entry.

Photo of Mr Emlyn Hooson Mr Emlyn Hooson , Montgomeryshire

Does not the Government appreciate that the people of this country object to subsidising consumers in Russia when consumers are not subsidised in this country?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

Even though the hon. and learned Gentleman comes from Wales, he must agree that it is difficult to influence an agricultural policy until one is a member of the Community.

Photo of Mr Peter Shore Mr Peter Shore , Stepney

How can the Minister possibly justify Britain making a contribution to sell off surplus butter which was produced before we even became a member of the EEC? Would it not have been a better deal for Britain if we ourselves had put in a bid for it?

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

Such was the ebullience of Opposition Members that I did not catch the right hon. Gentleman's last remark, but the reason for our contribution is that it is part of our commitment.