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Baroness Miller of Chilthorne Domer: My Lords, apart from the food chain, will the Minister comment on all the parts of an animal—for instance, a sheep—that can no longer be marketed for reasons such as the Russians no longer taking sheepskins and the Food Standards Agency now suggesting that sheep's intestines cannot be sold as natural sausage casings, although I believe that that is not based on firm scientific evidence? What is the effect on the incomes of sheep farmers of all those losses into the rest of the chain?
Lord Whitty: My Lords, I am aware that the most vulnerable and hardest-hit sector of the livestock industry is sheep farming, partly for the reasons outlined by the noble Baroness and partly because of past production decisions and the aftermath of foot and mouth. I am not sure whether she is suggesting that some of the burdens of the losses in the sheep sector should be borne by the processors and the supermarkets, to revert to an earlier question. What is needed now and in the medium term is a stable market for what remains of the sheep sector. That is part of what is being dealt with in the output from the Curry commission, both in the establishment of an English Collaborative Board and in the Food Chain Centre which we have established.
Baroness Byford: My Lords, I remind the House of my family's farming interest. I should also like to push the Minister further on the issue. He has talked about the medium term, the Curry report, and the other reforms for which we are waiting. Frankly, however, many farmers—but particularly small family farmers—are going bust and have no time to wait. Therefore, while we are waiting, how will the Government ease back on some of the emerging regulatory measures, lessen the paperwork that burdens all farmers, and ensure fair competition so that our farmers can compete fairly with other European colleagues?
Lord Whitty: My Lords, I regret to say that many of the noble Baroness's requests either are, or help towards, achieving medium-term solutions. The regulation process certainly needs to be rationalised, both in the number of regulators with which farmers must deal and in the ease of access to the regulations. We also need to simplify the relationship between UK and European regulations. However, the regulatory burden is not the essential problem of farming. Farming's essential problem is that farming production has been distorted by the common agricultural policy and other pressures on farming and that it does not meet the needs of the ultimate consumer. That is what we have to address, that is what the Curry commission pointed to, and that is what the Government are pursuing.
Exchange Rates
3.1 p.m.
Lord Renton of Mount Harry asked Her Majesty's Government:
- Whether they have any target exchange rate for sterling in relation to the euro.
Lord McIntosh of Haringey: My Lords, the Government do not have a specific exchange rate target, but a stable and competitive pound is sought over the medium term. The key to a stable and competitive pound is low and stable inflation, combined with sound public finances.
Lord Renton of Mount Harry: My Lords, I thank the noble Lord for that Answer. Does he not agree that the debate on entry to the euro is now inevitably hotting up, and that it would be very helpful for British manufacturing industry if the Government could make their hand rather clearer than they have done to date? With sterling having decreased by 10 per cent against the euro and approaching the range at which many businesses think it would be reasonable to exchange sterling for the euro, surely this is the time when the Government should say, "The five economic tests have been passed. Let us now make it clear that we are going to have a national referendum on whether or not we join the euro".
Lord McIntosh of Haringey: My Lords, I do not agree that it would be in the interests of British industry and commerce for us to advance in any way the proper consideration of the five economic tests. We have undertaken to complete those five economic tests within two years of the last general election, and we shall do so. We shall do so when it is in the best economic interests of this country.
Lord Pearson of Rannoch: My Lords, since EMU is designed to hold the emerging EU mega-state together, is it not dishonest of the Government to set economic tests, however bogus and whatever they may be, for what is clearly a constitutional project?
Lord McIntosh of Haringey: My Lords, as I do not accept the premise of the question, the conclusion that the noble Lord, Lord Pearson, draws must be illegitimate.
Lord Stoddart of Swindon: My Lords, does the noble Lord—
Lord Stoddart of Swindon: My Lords, we are not going to quarrel about it.
Does the noble Lord agree that whether we scrap the pound and join the euro is such a vital and fundamental decision that it ought not to be entered
into lightly? Does he remember how, in 1989, the same sort of people asking this question urged us on to join the ERM come what may, and what a disaster that turned out to be? We do not want high unemployment again—1 million extra unemployed—or 100,000 people to go bankrupt, do we? I therefore agree with the noble Lord that the Government are right in being cautious.
Lord McIntosh of Haringey: My Lords, I am unnerved to find myself agreeing with the noble Lord, Lord Stoddart, that this is a fundamental question for this country—of course it is. We have already said that we see significant advantages for this country in being part of European monetary union. We recognise that there are constitutional issues, but they are surmountable. The fundamental decision that has to be taken is an economic one. It will be taken with due seriousness not only by the Government but also by Parliament and the people of this country.
Lord Newby: My Lords, does the noble Lord agree that the movement of the pound against the dollar in recent days effectively demonstrates that the argument that we should not join the euro zone because the pound is effectively linked to the dollar is patently not true?
Lord McIntosh of Haringey: My Lords, the Government do not comment on short-term exchange rate changes.
Lord Lea of Crondall: My Lords, when recalling who said what and when in recent years, is it not a fact that many noble Lords speaking against Britain joining the euro have repeatedly in the past couple of years predicted that the euro would go through the floor, and that the whole thing would fall apart? However, in a matter of days—or, at most, weeks—the euro will probably return to parity against the dollar and prove a very successful project.
Lord McIntosh of Haringey: My Lords, I do not think that that question is addressed to me. Certainly many Members of this House have said many times in the past two and a half years that the euro was not a success because it had a weak exchange rate. I do not notice them saying that it is a success now that it is stronger.
Lord Tebbit: My Lords, will the noble Lord say what are the constitutional issues to which he just alluded?
Lord McIntosh of Haringey: My Lords, I do not wish to add anything to that which the Chancellor of the Exchequer and the Prime Minister have already
said. Indeed, I have answered a number of Written Questions from the noble Lord, Lord Tebbit, on this issue which are available from Hansard.
Lord Howe of Aberavon: My Lords, would the noble Lord find himself less embarrassed by the company he has to keep if the Government were more prepared to argue positively the case in which they claim to believe?
Lord McIntosh of Haringey: My Lords, I am not embarrassed in any way by the company I keep. Moreover, my personal opinions are of no importance in this matter, even if there were any differences—which there are not. I think that we all regard the Government's position on the issue as being responsible, as recognising the importance of the issue, and as being prepared to take the views of the people of this country seriously, while giving priority—as I am sure is right—to the protection of this country's economic interests.
Middle East
3.8 p.m.
Lord Howell of Guildford: My Lords, I beg leave to ask a Question of which I have given private notice; namely, to ask Her Majesty's Government what is their response to the latest developments in the Middle East peace process?
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, Her Majesty's Government welcome President Bush's statement which calls for a final settlement within three years—including,
- "two states living side-by-side in peace and security"—
- "Israeli settlement activity in the Occupied Territories must stop".
- "Israelis and Palestinians must address the core issues . . . This means that Israeli occupation that began in 1967 will be ended through a settlement negotiated between the parties, based on UN Resolutions 242 and 338, with Israeli withdrawal to secure and recognised borders. We must also resolve questions concerning Jerusalem, and the plight and future of Palestinian refugees".
Although there are some uncomfortable messages for the Palestinian Authority, Her Majesty's Government are glad that President Arafat has welcomed the speech. We strongly support the call for reforms to the Palestinian Authority and for new elections. These will be an opportunity for the Palestinian people to decide who will lead them towards a final and peaceful settlement. Her Majesty's Government will do all we can to assist in the process outlined.
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