Green Pound

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 8th July 1976.

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Photo of Mr Esmond Bulmer Mr Esmond Bulmer , Kidderminster 12:00 am, 8th July 1976

asked the Minister of Agriculture, Fisheries and Food what is the present discrepancy between £ sterling and the green pound.

Photo of Gavin Strang Gavin Strang , Edinburgh East

The gap between the two rates is 22·4 per cent., giving a calculated monetary compensatory amount of 20·9 per cent. for this week.

Photo of Mr Esmond Bulmer Mr Esmond Bulmer , Kidderminster

When will the Government start to explain to the public the consequences of this mismanagement of the pound in terms of rising food prices? How can the Government expect the British farmer to respond to their White Paper if he cannot compete on equal terms with his Continental competitor?

Photo of Gavin Strang Gavin Strang , Edinburgh East

I am not quite sure what the hon. Gentleman is asking for. Is he complaining because there is an enormous subsidy on the import of food from the Community, which benefits the British consumer, or is he suggesting that we want to maintain food prices at a low level for the benefit of the consumer?

Photo of Mr Robin Corbett Mr Robin Corbett Member, Labour Party National Executive Committee

Will my hon. Friend confirm that consumers welcome the disparity, in that it protects them from the more monstrous craziness of the application of the common agricultural policy? Will he take on board the fact that large sections of the industry do not want an immediate and dramatic revaluation of the green pound? Does he accept that that would mean only a slackening of demand for the things that are being produced?

Photo of Gavin Strang Gavin Strang , Edinburgh East

I am sure that my hon. Friend was not intending to imply that the common agricultural policy has contributed to the recent fall in the market rate for sterling. I agree that in practice we have to be careful from the point of view of the consumer, who is obviously paramount in this matter, as well as from the point of view of industry. If we force up prices too high and too quickly, there will be a sharp effect on demand.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland

For how much longer does the hon. Gentleman think that other countries in Europe, such as Germany, will be prepared to continue to pay out almost £30 million a month to subsidise food prices in this country?

Photo of Gavin Strang Gavin Strang , Edinburgh East

The hon. Gentleman has raised a point, but let us remember that the subsidies are on exports from Community countries. Some countries are not too unhappy about that. This is a difficult area. We are talking about striking a balance between the consumer and the producer. Even if we were not in the Community, the direct implication of the fall in the value of the pound sterling—I am sure that this is recognised by the hon. Gentleman—would be higher food prices.