Does the Minister agree that if the hopes for milk expressed in the White Paper are to be met there must be no reduction in the milking herd? Does he recognise the concern of United Kingdom producers that the current co-responsibility levy proposals could be an impossible impost? Will he make it clear to the House that his right hon. Friend's firm resolve is to refuse to accept these co-responsibility proposals, since the Minister's anwer to the Select Committee on European legislation the other day made that anything but clear?
I thought there was no doubt and that my right hon. Friend and I had made the position clear. If the proposals of the Commission for CAP prices were adopted, they could have a substantial effect on production in the United Kingdom. The proposed levels of co-responsibility levy would seriously depress our producers' margins. The proposed exemptions from the levy would discriminate heavily against the larger and more efficient producers in the United Kingdom. This is a discrimination against us and against efficiency. We shall oppose it strongly.
I agree with my hon. Friend. If the Community is to overcome some of its basic problems we must deal with the price structure and surpluses. We must also ensure that the more efficient countries have a chance to produce more and that the less efficient produce less. The co-responsibility levy works in the opposite direction.
Can the Minister tell British dairy farmers, and more particularly their bankers, why they should continue to invest in milk production when costs are increasing by 17 per cent., when money is costing 16 per cent. and when the best that the Minister can offer is a 5 per cent. devaluation of the green pound?
At least that is a step in the right direction. There is growing confidence in the dairy industry, because the herd size has increased in recent years and the production of milk is at a record level. If there had been more take-up of school milk in Tory-controlled areas consumption of milk would have been even higher. We have a good record and there are good prospects.
In the Scrutiny Committee I was commenting on the report of the Commission. The price negotiations are under way, and that is another aspect. We have made clear where we stand on this matter.