§ 3.56 p.m.
§ The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames)
I beg to move, That the Bill be now read a Second time.
During the Supply debate on agriculture last May I announced to the House the measures that the Government intended to take to secure greater stability in our market for cereals and meat. These proposals arose from the conviction that, while the existing system of support for agriculture based on the 1947 and 1957 Acts must and should be maintained, we needed to buttress the system against the pressures which have been put upon it.
It is, I think, common ground on both sides of the House—although I am not so sure about the Liberal Party—that our system of support is the one which best suits our national circumstances. But it was devised at a time of comparative shortage of food in the world, and it was always envisaged that it could be, and might have to be, adapted as conditions changed; and surely what we have seen in recent years has shown the need for modification in our arrangements. The anxiety which has been widely felt in this House and also in the country has arisen on two counts, both flowing from the complete change round in the balance of supply and demand for food in the Western world.
In the first place, with our open door policy for food imports, our market has tended to act as a magnet for surpluses. The effect has been to disrupt the market and consequently to widen the gap between the guaranteed price and the price which farmers can get for their produce on the market, thus causing a notable rise in the charge to the Exchequer, which is the basis of the system.
Secondly, there has been the anxiety, well expressed in the Report of the Estimates Committee of 1961, over the impossibility of accurately forecasting the Exchequer liability with such a com- 582 pletely open-ended system. While I do not think that we can aspire to achieve complete accuracy—for nature itself will take a hand here—the steps that we are taking to adapt our support system will prevent the sort of runaway bill which we have had, and not been able to estimate, in recent years, notably, the House will remember, in 1961.
The Government have also been considering their policy for horticulture, and in the statement which I made a few weeks ago I set out their plans for this important industry, too. The purpose of the Bill is to give power, where it does not already exist, to implement these policies for agriculture and for horticulture.
First, agriculture. As the House knows, discussions are proceeding both with the lenders of the industry and with our principal overseas suppliers on the regulation of imports of cereals and meat, coupled with the extension of the standard quantity concept at home so as to maintain a reasonable balance between home production and imports. As regards home production, the powers to introduce standard quantity arrangements already exist in the Acts of 1947 and 1957 and such arrangements have been introduced for several commodities.
On the imports side, the arrangements which we are discussing with our overseas suppliers of meat are on the basis of the quantities coming on to this market. As the House knows, we have already concluded a multilateral arrangement about bacon on this basis and it is generally agreed that, because of the nature of the product and the structure of the trade, built up over a long time, the right way to deal with meat imports is on a quantity basis. The arrangements which we have in mind, therefore, do not come within the ambit of discussion on the Bill itself which deals with the introduction of minimum import prices.
This is the basis of our policy for cereals—the observance of minimum prices for imports coming on to our market. By Clause 1, power is given to prescribe minimum import prices and to impose levies, if necessary, to enforce such prices. Although these powers are required immediately for cereals, they have been drawn, as the House will have 583 noted, as general enabling powers which could be applied by Order not only to cereals, but to other agricultural and horticultural commodities. We have thought it right to seek these wider powers from the House so that they would be available should it be necessary in the future to apply minimum import price arrangements outside the cereals sector.
There is much discussion at present about international commodity agreements, and it is possible that such agreements may in time be concluded on a number of commodities. As a result of such developments, or because of changing circumstances in our own market, we may wish to be able to apply minimum import prices in order to stabilise our market for other commodities. But, as I say, there is at present no intention on the part of the Government to exercise the powers under the Clause other than for cereals and their related products.
Before turning to some more general questions arising out of Clause 1, I should explain briefly how we see these powers being applied to cereals. The Minister would first prescribe by Order the cereals and cereal products on which he wished to exercise the power to apply minimum import prices and levies. Under the Clause, any Order specifying a commodity would require affirmative Resolutions in both Houses of Parliament. There would, therefore, be close parliamentary control over the list of commodities for which minimum import prices and levies could be prescribed. In other words, this is enabling legislation, and we should have to introduce Orders before we could bring in minimum import prices for any particular commodity.
The Minister would then be able to prescribe by Order the levels of minimum import prices applying to any commodities specified. Finally, when it was necessary to enforce minimum import prices on imports, he could make Orders prescribing rates of levy chargeable on commodities so as to enforce the prescribed minimum import price. That, briefly, is how the powers under Clause 1 would be applied.
Since we are in process of discussing our proposals for cereals with our main 584 overseas suppliers, I cannot today tell the House precisely what levels of import prices we shall want to prescribe for the different cereals or cereal products.
§ Mr. Douglas Jay (Battersea, North)
Will the Minister clarify one point regarding the Orders? Would it be possible for the Government at any time to raise the level of the levy on a commodity without coming to the House and asking for an affirmative Resolution approving an Order? As far as I can see, they would, but is that really so?
§ Mr. Soames
The House would, rightly, be jealous of its rights in two matters. One is the list of commodities on which it is proposed to have a minimum import price, and the other is the level of the minimum import price. Those are the questions which would come to the House for approval by Resolution.
The amount of the levy might vary not only from day to day, but perhaps even from shipment to shipment. The House will wish to ensure that the minimum import price is adhered to, and it must be an administrative act by the Government to see that it is adhered to and, if supplies come in at below the minimum import price, to ensure that the levy is put on so that the price comes up to the minimum import price.
This must be left for administrative action. It could not wait for the approval of the House. Clearly, that would be quite impossible. What the House will care about, and rightly wish to have a say in, is the level of the minimum import price, because this, of course, affects the price at which the commodity comes on the market.
I was pointing out that I cannot at this time say precisely what will be the level of import prices which we shall want to prescribe for cereals. I assure the House, however, that it is not our intention to apply the arrangements in a way which increases generally the prices for cereals in our market. The minimum import prices are simply intended to put a floor into our market in order to deal with supplies at the unrealistic price levels at which imports have from time to time come in. The deficiency payment system is intended to make up the difference between a 585 realistic world price and the price guaranteed to our own producers.
If, however, imports are coming in at quite uneconomically low prices, which at times of surplus generally in the Western world is apt to happen from time to time, as we have seen, this undermines our market generally, and the result is to push up the cost to the Exchequer of deficiency payments, and our support system was not designed to deal with this sort of situation.
Our intention, therefore, is not to use the minimum import price arrangements as a means of putting a protective fence against competition by economically priced supplies, nor would this be in the interests of our agriculture generally because of the dependence of livestock producers on imported feeding stuffs.
As an indication of the order of prices which we have in mind, I can remind the House of the minimum price of £20 a ton for barley which some of our overseas suppliers undertook to observe in the summer of 1961 following a time when barley was being imported at prices down to about £15 a ton. Present market prices for imported barley at about £23 a ton are, of course, well above that sort of level, and the whole concept of the minimum import price and levy arrangement is that it would not bite unless the offers on the world market were so low in terms of price as to frustrate our whole system of support for agriculture. It would come in only at those times when there were offers down below the floor, as it were, such as we have known from time to time.
§ Mr. J. M. L. Prior (Lowestoft)
Supposing that the world price for barley is, for instance, £16 a ton, and our minimum import price is set at £20 a ton, is it the Government's intention that a levy of £4 a ton would then be put on the import, or is it the intention that importers should sell at £20 a ton, as has happened, of course, with-Russian and French barley in the last year or two?
§ Mr. Soames
We are not running this as a revenue raising operation. That is not the object of the exercise. The object is to keep the levels on our market at a realistic point. If barley were to arrive at our ports at £15 a ton a levy would be placed on that barley to bring it up to 586 the minimum import price. My hon. Friend took the example of £20 a ton but we are a very big cereals importing country; we import 8 or 9 million tons of cereals annually and our minimum import prise will undoubtedly have a considerable effect on the steadying-up of world prices generally. Mr. Frederick Peart(Workington): The hon. Member for Lowestoft (Mr. Prior) has asked a very important question. The Minister said that we shall not think in terms of collecting revenue, but some revenue will be collected. I think that the House would like to know who will get it.
§ Mr. Soames
The object of having a minimum import price is not to obtain revenue for the Exchequer. However, if there is barley coming on to the market and it attracts a levy, revenue will flow there from. But we are not expecting in normal circumstances that there will be offers of cereals to the market at below our minimum import price. This is a net to prevent the import price falling below a realistic point.
I turn now to two point which I know some hon. Members have in mind. The first is the effect of these arrangements on our balance of payments and the second the effect on our cost of living. What I have said about the sort of levels of minimum import prices which we have in mind shows that we are thinking in terms of the lower levels of the range of prices within which the world market for cereals normally fluctuates. We are aiming to cut out the lowest troughs to which cereals prices have from time to time sunk.
How often the minimum import prices would, in practice, operate would depend entirely on the state of the world market. But if prices were depressed generally as a result, for example, of surplus supplies, it is true that our minimum import prices would prevent us from importing at the lowest prices at which cereals might been offer from time to time. It would depend on whether they came on offer from the exporting countries at our minimum or below it. But on the other hand, the greater stability of prices on our market would reduce the cost to the Exchequer by preventing the deficiency payment bill from soaring 587 upwards, as it has done in the past when low-price imports have undermined our market.
The same point applies to the effect of this on our cost of living. There is, however, another point that I should like to make on this aspect. The great advantage of our present support system is that, as well as safeguarding the well-being of our agricultural community, it enables us as a nation to enjoy cheap food. This support system was developed when foodstuffs were in relatively short supply. What we are doing by introducing the minimum import price arrangements is to take the necessary steps to enable our system to continue to function efficiently in the very different conditions of today when our market is liable from time to time to be subjected to pressures from surpluses being offered at knock-down prices on the world market, often with the aid of heavy subsidies.
Unless we take the necessary steps to buttress our arrangements against these pressures, there is a danger that the rising cost to the Exchequer of our system would compel any Government in power to rethink our whole basic approach to the method of support for agriculture. The only obvious alternative would be to move over to a fully managed market régime as practised in Europe, which would mean the end of our cheap food policy.
The provisions of Clause 1, therefore, far from representing a retreat from a cheap food policy, are designed to remove some of the growing pressures on our present system of support, which we must do if the system, with its advantages of cheap food, is to survive.
§ Mr. A. E. Oram (East Ham, South)
Does this not mean that whatever is saved on the deficiency payments, and whatever the taxpayer saves, the house wife will pay?
§ Mr. Soames
It does not mean that. The effect will be exactly as it is today. What this enables us to do is to ensure that the system can continue without successive Ministers of Agriculture having to come to the House and say, "I thought that the market would be steady. In fact, the world market has collapsed and our bill for 588 deficiency payments has gone up by £50 million or £100 million." It will preserve a system of great benefit to the country as a whole by enabling it to enjoy the benefits of cheap food compared with any other industrial country.
§ Mr. Soames
If cereals are bought abroad and delivered to a port, the levy is paid on any difference between the price at which it comes into the port and the minimum import price. [Hon. Members: "Who pays it?"] The importer.
I turn to the Bill's horticultural provisions, which are of major importance in helping the industry to reduce its production costs and improve its marketing. Taken together, they can, I believe, be said to represent a new deal for British horticulture and a chance for the industry to make itself as efficient and competitive as any in the world. We are not immediately concerned in the Bill with the future import policy for horticulture, but I want to make it clear that while it is our belief and intention that the measures we are taking will reduce the industry's reliance on tariff protection and that this will be of long-term benefit to the industry and the nation as a whole, there is no question of our operating some cut-and-dried plan in advance for reductions in tariffs. And as I said in my statement to the House recently, there will have to be a period of about four years before any reduction can be considered in the tariff on sensitive items. After this period, reductions can be considered and decided upon if in the circumstances of the time that was judged to be in the national interest. We have said that we will consult the industry, and I am sure that that is right. Such consultation would include consideration of the progress made towards achieving a higher degree of competitive efficiency.
The proposals in the Bill are of four kinds; grants for growers and cooperatives; the improvement of credit facilities; grants for wholesale markets; 589 and the introduction of compulsory grading. I will say a word about each of them in turn.
First, I deal with grants for growers and co-operatives. What we are seeking to do is to extend to the production side the Horticulture Improvement Scheme which has hitherto been confined to the marketing side of the business. When the Bill is enacted we will be setting out a scheme, as we have done in the past, which will include grant-aid on many items of benefit to the industry on the production side. We are in consultation with the leaders of the industry about what items should be included.
Turning to grants for small production businesses, general help to tide small business over a period of reorganisation will be given up to a maximum of £500 a holding. The business will have to be at least of four "adjusted" acres and with an upper limit of 30 acres all told and not more than 15 "adjusted" acres. This is to enable the smaller man to adapt his system of production perhaps to alter the pattern of his business and to give him a grant over a period of years to help him so to do.
Then there is the grubbing up of orchards, which, hitherto, has been confined to horticultural holdings. There are a number of orchards, often on agricultural rather than horticultural holdings, where nothing has been done. They are apt to breed pests, but the apples may be harvested and put on the market, although they are not in good condition. They tend generally to depress the market when they reach it. The new proposal is an extension of an existing grant, which has been confined to the horticultural industry, to try to get rid of a number of old orchards for the benefit of the industry as a whole.
The next point is the provision of working capital for co-operatives. The idea is to give a grant for a couple of years, until turnover catches up with expenditure, to encourage the setting up of co-operatives. We are at present enabled to give grants for promotional work, but the intention now is to encourage the faster setting up of co-operatives and to offer a sum for working capital for the first two years to enable a co-operative to get under way.
Next, co-operative markets. The existing Act allows grant aid for co- 590 operative buildings and equipment to store and handle produce. The Bill will allow grant aid to co-operative or groups of co-operatives to build and equip their own markets. We do not expect to see a large number of co-operative markets going up, but two or three are under consideration. The trend towards greater co-operation by growers, including even the big ones, in the marketing of their produce is something that we wish to encourage.
All these items which I have mentioned under the broad heading of grants for growers and co-operatives require more money. Clause 6 of the Bill increases the £8 million provided under the 1960 Act to £24 million, which may be extended to £27 million by order if necessary, over a ten-year period.
Mr. Denys Dullard (King's Lynn)
My right hon. Friend has referred to grants for production on individual holdings, which are also referred to in the Explanatory and Financial Memorandum.
§ Mr. Bullard
No—production on holdings generally, on the production side. There does not seem to be any reference to this in the Bill, but my right hon. Friend has referred to a list. Where is this in the Bill?
§ Mr. Soames
It is in Clause 6, which extends the Horticulture Improvement Scheme and the money that is voted for it by Parliament from £8 million to £24 million. The details of what will be allowed in this direction will come into the scheme which will be laid as soon as the Bill is enacted.
To move on to the credit side, under the existing Horticulture Improvement Scheme, even though it was confined only to marketing, growers have found it difficult to raise the other two-thirds capital necessary to take full advantage of it. Clause 8 allows the Government to stand behind the Agricultural Credit Corporation, which, in turn, indemnifies banks against bad debts on loans to growers up to a specific level. We are standing behind the corporation to the tune of £100,000 a year plus any unspent carry-over from year to year of not more than £200,000. This support for 591 the Corporation will generate many millions of pounds of credit for horticultural growers who, hitherto, have found it difficult to provide collateral security and will, we believe, enable them to take full advantage of the extended grant aid scheme.
§ Mr. Soames
There is no reason why this provision should not be applied to other institutions if so required. It will be seen that the Clause does not specify the Agricultural Credit Corporation. I was merely giving it as the example of what we had in mind.
I turn now to wholesale markets. In 1957, the Runciman Committee advised that local authorities should press on with the modernisation of their markets. We are now in 1963 and only two markets have been built since the war, one in Sheffield and the other in Coventry. Experience shows that it is necessary to give some financial incentive to local authorities. Like the Runciman Committee, we believe that it is right that these markets should be local markets, in the control of local authorities and not of a national organisation, because they deal with local problems. The Bill offers a one-third grant to those markets which we wish to see improved—and they will be the bigger markets. When questioned during my recent statement, I said that we were thinking in terms of markets with a throughput of £5 million a year as the test. We think that 15 or 20 markets will come within this provision.
Our object in giving grant over a period of years is, first, to give an incentive to local authorities to rebuild their markets whilst the grant is in operation. Secondly, by the offer of the grant, they will be able thereby to charge rents to stallholders which will be considerably less than they would otherwise have been, if they were having to make their markets pay for their own accounting purposes. This is a twin benefit which 592 will stem from the Bill. We are allowing £20–£25 million over a 10-year period. This will be a one-third grant, so that it will represent the spending of up to £75 million on markets over the 10-year period if, as we believe it will, advantage is taken by market owners to improve their markets.
Compulsory grading is a new but necessary departure. We are taking power to lay regulations designating grades for certain fresh horticultural crops. For some time, a number of people in the industry have been keen on grading and have wanted it to be introduced. Some have done the grading themselves. It has been disheartening for them because time and again, when putting their produce on the market, ungraded produce has come on to the market and lowered the price and they have not been able to obtain a return for their lay-out on grading.
There has also been considerable opposition to grading within the industry, but I believe that the feeling within the industry has progressed considerably in recent times. As the House will know, we have introduced this policy after having consultations with the leaders of the industry. I believe that the industry is ready and appreciates that the only way to get grading is not by voluntary methods, but by compulsory enforcement. That is what the Bill enables us to do.
Obviously, some commodities lend themselves better than others to grading. The first which we have in mind are apples, pears, tomatoes, cucumbers and, possibly, cauliflowers. It will, however, take time—say, two or three years—to recruit the graders—we have none in this country—and train them. Before enforcement is introduced we may, perhaps, have a trial run so the industry can accustom itself on what is required in the way of grading.
We will go ahead with this as fast as we can. I believe that this will be attractive to the industry in as much as its products will then be graded as well as the produce coming in from overseas, so that they will be in much fairer competition. The housewife will also benefit and will be able to buy home produce knowing that it has been properly graded.
§ Mr. Anthony Fell (Yarmouth)
In regard to the imported produce which may be graded, will there be a distinction as to country of origin between British and imported produce?
§ Mr. Norman Cole (Bedfordshire, South)
On the same point, are we going to tie up the imported graded produce with the graded produce of this country?
§ Mr. Soames
The imported produce is already graded. Indeed, the difficulty at the moment is that the imported produce is graded whereas the home produce is not. We now have to set out our own grades so that our home produce can compete with the imported.
We believe that the commercial grower and the horticultural industry as a whole, with its turnover of £160 million a year, have an important contribution to make to the national economy. At the same time, we believe that it would not be realistic, or in the best interests of the industry in present circumstances, where the whole mood of international trade discussion is towards a lowering of trade barriers—a movement which it is very much in our general national interests to encourage to the full—for the industry to have to rely in the years ahead to the extent that it does today merely on tariff protection.
The conception underlying the Bill is to encourage the horticultural industry to improve its competitive position in relation to foreign suppliers. Indeed, our object is to enable the horticultural industry to be as efficient and competitive as possible. I believe we have included in the Bill the essentials which are necessary and right to achieve this object. The opportunities for the industry which will be provided under the Bill have been worked out in the closest co operation with the leaders in the industry, and I would like to say how grateful I am for the support and help which we have had from them in this new policy.
594 We believe that the skill, knowledge and enterprise which is to be found in the industry will enable it to take the fullest advantage of the opportunities and incentives which will be provided by the Bill and that from it not only growers and merchants, but consumers, and, indeed, the whole country, will benefit. An efficient horticultural industry, with its produce better presented and marketed and distributed more effectively and more rapidly, is not only good business, but is something which will be appreciated by housewives.
The provisions of this Bill, and the very considerable measure of Government financial assistance which they involve will lave far-reaching effects on the horticultural industry. They represent a considerable change in the means to be employed in supporting the industry, just as Clause 1 of the Bill represents a considerable development in the Government's support policy for agriculture. In both cases they represent realistic adaptations to policy to take account of the changing world setting within which our farming and horticultural industries have to work. The Government's basic objectives of securing the well-being of these important industries remain the same. I feel sure that the horticultural provisions will put that industry on a sounder footing for the future. Clause 1 is an essential feature in ensuring the continuation of the support system for agriculture by removing one of the pressures which put it at risk. Together, I believe that they make a highly worthwhile Bill which will commend itself to the House as a whole.
§ Mr. Charles Loughlin (Gloucester shire, West)
Before the right hon. Gentleman sits down—I know that he has been very patient—
§ Mr. Loughlin
—I wonder whether he will give me some information about Clause 9, which refers to grants to wholesale markets. Some of the major markets are combined markets. They have a throughput of horticultural products and fish products. Can the right hon. Gentleman tell me whether such a market would qualify for the grant?
§ 4.35 p.m.
§ Mr, Frederick Peart (Workington)
The Minister has today brought in a very important Bill. In fact, we are really discussing two Bills. Clause 1 in itself is a major Bill and a major departure from policy. After all, what we are deciding today in the House is as important as the decisions over the controversies on the corn laws many years ago. On both sides of the House we should be aware that in the matter of food policy we are making a major change and, for that reason, should scrutinise carefully what the Government intend to do.
I warn the Minister that he will have to be much more precise on Clause 1 in Committee. His reply to his hon. Friend the Member for Lowestoft (Mr. Prior) was not very convincing in the sense of the information that he gave to the House. He must know how these levies will work and what administrative machinery will be created. I will merely say that in Committee we shall certainly constructively examine Part I of the Bill in great detail.
Part II of the Bill is concerned with horticulture and we welcome proposals for which we have asked over and over again for the last 10 years. I recollect the many debates we had on the Horticulture Bill and on grading and we are glad that the Government at last are taking responsibility. Obviously, it would have been better if there had been two debates; one on Clause 1, the major policy, and another in a separate Bill on the part dealing with the horticultural industry. I say from this Bench that we will not divide against the Bill, but that we shall critically examine the impact of the Government's proposals not only for agriculture, but on our general food policy.
The Minister should remember that he is Minister of Agriculture, Fisheries and Food, so we are not dealing specifically with agricultural policy. I hope that the Secretary of State for Scotland also appreciates that fact. Scottish Members on the other side of the House do not always accept this. I am never sure what are the responsibilities of the Secretary of State for Scotland. He must bear in mind that he has responsibility for food as well as for agriculture.
596 I accept that we have to balance varying interests. The Minister, quite rightly, has given a survey of the reasons why the Government changed their policy when he announced the new decision in May of this year in our last Supply debate. We must obviously consider the various interests, and the first to which I refer—and I hope that there will be complete agreement on this on both sides of the House—is, once more, the food producer farmer and the farm worker. We are all anxious to work out a policy which will give him a fair return and adequate security.
Secondly, we must also bear in mind the interest of the consumer, which is important. I am glad that that has been stressed today because the effect of Part I of the Bill could be to impose a levy on food imports which, if not properly handled, could cause a rise in food costs and hardship to certain sections of the community.
Thirdly, there is the important factor of Exchequer support. Fourthly, we must remember our obligations to E.F.T.A., and fifthly, our obligations to the Commonwealth. The right hon. Gentleman has recently announced that he is discussing with Australia the whole food policy of the Government, as he has done in relation to meat imports with the Argentine, and also, I understand, with Uruguay. We must keep in mind the interests of the Commonwealth. Finally, we must also bear in mind our obligations to the G.A.T.T. The right hon. Gentleman took part in a May Ministerial Committee of G.A.T.T., when it was agreed that the aim of agricultural and food policy should be to expand industrial and agricultural trade.
We on this side of the House broadly accept that British policy must cover these six considerations. The Bill seeks to give practical effect to the policy the Government announced on 27th May last. The right hon. Gentleman has admitted that events have really forced him to act. The tragedy is that the Government have not acted in many directions over the last 10 years.
§ Mr. Peart
The right hon. Gentleman shakes his head. He often chides the Liberals for seeking to create a managed 597 market, but he, more than anyone else in the Government, defended the managed market in Europe and advised the farming community to accept the Treaty of Rome. Now he is so enthusiastic the other way that I am a bit suspicious. In May, the right hon. Gentleman said in our debate that pressure of events outside decided that there had to be a change of policy.
In other words, the Government have had to face certain economic realities and have been pushed, through pressure of events, into making new decisions. That was admitted by the Minister last May when he also said:Different countries have felt the effect of this in different ways, but all of them have found it difficult to secure for their agricultural industries a proper share in the general improvement in living standards. They have responded to it in different ways."—[Official Report, 27th May, 1963; Vol. 678, c. 442.]The right hon. Gentleman went on to deal with production. We can see here how the Government have had to admit that a crisis has emerged for the country. He mentioned the problem of increasing Exchequer support. There has also been a crisis for small farmers. Many of them have had to face these pressures and some have been forced out of business.
In a sense, the Government have had to take certain actions which we, over and over again, have prodded them to take. In discussing policy, I hope that we shall concentrate broadly on the issue. We shall examine in detail at a later stage the proposals for horticulture, import levies and administration. But now we must consider the place of support in our policy. This is a major problem.
The Minister himself has explained what a problem this is. In May, he mentioned that support had increased by more than one-third in the last three years—by over £100 million to a total of £360 million, consisting of £120 million in direct grants and £240 million in deficiency payments. The larger proportion of this latter figure—£210 million—was effective support for cereals and meat.
I agree that this support policy, as the right hon. Member said, has given to our consumer cheaper food than in any other country, probably, in the Western world. The figures have been published 598 by the United Nations. We owe the security of our agricultural industry and of the consumer to the basic policies which were pursued by the Labour Government in the Agriculture Act, 1947.
§ Mr. Jeremy Thorpe (Devon, North)
The hon. Member for King's Lynn (Mr. Bullard) did pretty well by it.
§ Mr. Bullard
I was not jeering in any sense at all. I was hoping that the hon. Gentleman was going on to explain how his proposals for commodity commissions would work.
§ Mr. Peart
The hon. Gentleman should await the development of my speech. I was taking up a point made by the Minister and was pointing out how refreshing it was that a Conservative Minister should pay tribute to the 1947 Act. It is refreshing because hon. Members opposite divided against Part I of the Bill in Committee. [Hon. Members: "No."] It is true.
The Agriculture Act, 1957, passed by the present Administration, reaffirmed general support conditions. We claim that we played a substantial part in the establishment of a sound agricultural policy affecting both the farmer and the consumer. But, inevitably, there must be control in the support, and on that there is general agreement on both sides of the House. This was announced not only by the Minister, but by the previous Prime Minister, who stated that we must somehow control Exchequer support. In the Bill there is emphasis in Part II on direct grants, which may really be expressed as production grants in that they will amount to several million pounds over the next 10 years. Production grants will continue.
The right hon. Gentleman is seeking to control the deficiency payments system. I have always argued that the deficiency payments system cannot properly operate in a free market. We put this argument two years ago, when he presented increased Estimates, and it still holds. Now the right hon. Gentleman accepts that we must have a 599 controlled market and that is a major change in Government policy.
However, this is a very big problem, because it affects both the farming community and the consumer. The small farmer, however, has not been affected so much by deficiency payments, because he does not get the benefit enjoyed by the larger farmer. Indeed, there has been a crisis in farm incomes. Hon. Members must know, through correspondence with their branches of the National Farmers' Union, and from their own study of the industry, that this is true. I have here figures which I believe to be reliable and have quoted them before.
These figures show the trend in one section of the industry—among the small farmers. Let us take the small milk producer as an example. In 1954, the number of registered milk producers in the United Kingdom was 173,740; this had dropped to 170,440 in 1956, to 162,600 in 1958, to 151,700 in 1960 and to 143,000 last year. On average, about 4,500 producers have left the industry over the past eight years. This figure was given to me by Agriculture House and shows that there has been difficulty for the small man.
The same is true of the poultry producer. Let us remember that for many of our small people no benefits have been forthcoming for a long time.
§ Mr. Percy Browne (Torrington)
I fully accept that many small farmers have gone out of milk production, but was the hon. Gentleman quoting figures for all farmers going out of milk production?
§ Mr. Peart
They are mainly small farmers. With his experience of Devon and the South-West, the hon. Member for Torrington (Mr. P. Browne) must know that they are mainly the small men. I hope that he accepts my main 600 point. The small producer has had to face difficulties. Of course, the small producer has had benefits from the Government. Does he accept that?
§ Mr. Browne
All producers, irrespective of whether they are large or small, have had benefits from the Government, if guarantees and grants are benefits. We all accept that. The hon. Member said that the number of milk producers had decreased by more than 30,000 over the last eight years, and said that this was what had happened to the small milk producers. I asked whether the figures he gave were for all milk producers, or only small milk producers. He did not make that clear.
§ Mr. Peart
It is the total number, but within that total number the vast majority are the small men. [Hon. Members: "No."] Hon. Members can check the figures if they like.
It is in Part I of the Bill that we see the main impact of the Government's import policy. The Minister is not certain how it will operate. The introduction of levies is a major decision. The Minister is to have power by Order to apply a levy from time to time on the import of certain commodities. This is undoubtedly a major change of policy which will affect many imports. We import half the world's imports of meat and three-quarters of the world's imports of butter. The Minister gave those figures in a good speech to a recent conference in Amsterdam.
We are dealing with a major part of our food supplies and we have to scrutinise these levies carefully. I have always believed that imports must be phased and that stability must be created. The Labour Party has always stressed this and recently announced that our basic policy would be to co-ordinate imports with home production. However, we are not certain that the Bill suggests the best way. The Minister did not make a case today, for he was vague and uncertain. He will have to make his case in much more detail in Committee.
§ Mr. Peart
The Minister is to be given power to go beyond cereals. Of course, he said that he would apply this levy only to cereals, but he is taking power to apply it to any agricultural product, if he can justify doing so. The Minister has announced that he wishes to phase imports with home production. We do not dispute the necessity for that, but we are not certain that the right hon. Gentleman has made out a case for the levy. He did not give much detail and he appeared to be uncertain, and that is why we shall examine the Bill closely in Committee.
The Minister has recently made many agreements about the import of meat and he has announced his policy towards imports from the Argentine and about phasing them over a period. A working party has been set up to deal with that. We have also had the bacon agreement, by which the United Kingdom will have 222,400 tons of the 615,000 tons market, the rest being divided on a quota arrangement among the countries which export bacon to the United Kingdom. This may be all right and may be the pattern for future agreements, but the agreements might lead to a policy of restriction.
The Secretary of State for Scotland must have had representations from the Scottish N.F.U. on this subject I am not saying that the Scottish N.F.U. is right, but I should like to know from the Secretary of State what his answer is to those representations. Is he satisfied that there will be no policy of restriction? It is essential to have international agreements on specific commodities, but we are not sure that what is proposed is the right pattern, nor whether quantitative agreements imposed on the home producer and linked to the levy system will be to the advantage of all.
We are trying to find out what the Minister has in mind. I have been asked to justify commodity commissions. They are not mentioned in the Bill, but I am prepared to argue the need for commodity commissions to regulate the phasing of the imports of cereals and meat products. This is a view which has been accepted by the Liberal Party.
§ Mr. Prior
If the hon. Member accepts that some system of import control is desirable, and therefore accepts that this must be done by agreement in order to safeguard our trading with 602 other nations, and if the price of this import control is standard quantity at home, does the Labour Party accept the principle of a standard quantity?
§ Mr. Peart
It depends on what percentage is to be regarded as the standard. The Government are now negotiating with producers, but we have not been included in those consultations and I do not see why I should give promises. This must be the responsibility of the Government. In principle, I accept the need for a guarantee applying to a standard quantity. I have never argued that we should have unlimited production or, to use a phrase, that we should grow grapes on Ben Nevis. Obviously, we must think in terms of sensible and moderate expansion. That is the view of my party. Perhaps the hon. Gentleman's question has removed some uncertainty.
I do not propose to go into detail about commodity commissions. It may well be than the commodity commission system is the better way of doing it, but, when we previously discussed levies and the control of imports, the Minister said that he would consider setting up a body to deal with this. I hope that I am not being too tedious by quoting the Minister at great length, but on that occasion he said:The detailed arrangements for the different commodities which we would aim to agree with our overseas suppliers might well need to include a body to keep under review the level of supplies and also the phasing of those supplies in or markets in the light of changes in the pattern here and overseas and other factors, such as the opening up of new markets."—[Official Report, 22nd May, 1963; Vol. 678, c. 449.]That may suggest that the Minister is considering setting up a commodity commission, and, who knows, he may adopt what the Labour Party has announced.
The right hon. Gentleman said at that time that it would be unwise to decide on the machinery to use. When hon. Gentlemen opposite talk about commodity commissions, they ought to be careful. During the next few weeks the Government may announce a major change in the view that they have held so far and accept the principle of commodity commissions. What is the explanation for the new-found enthusiasm of the Minister for this form of control? Is it to prepare for our entry into the Common Market?
§ Mr. Soames
The hon. Gentleman has no reason to think that the alterations that we are making in the pattern of support are other than to benefit agriculture in this country. He knows this, because, after we announced our policy last May, in July hon. Gentlemen opposite announced a not dissimilar alteration in their policy. The hon. Gentleman and his right hon. Friend the Member for Belper (Mr. G. Brown) went to Swaffham and said that they would do much the same sort of thing.
This proposal stands on its merits. It is a reasonable and proper alteration to make to enable our system of support to exist in today's supply and demand pattern which is totally different from what it was when the system was first introduced.
§ Mr. Peart
Unlike the right hon. Gentleman, I was not an enthusiastic supporter of entry into the Common Market. Despite what he has just said, I should still like to know whether the Bill has been introduced to prepare for our entry into the Common Market. [Hon. Members: "No."] It is all very very for hon. Gentlemen opposite to say "No", but the right hon. Gentleman was an enthusiastic supporter of European federalism, and on many occasions, both in this House and in the country, he enjoined the farming community to support the Common Market. He also defended the Common Market cereals regulations.
In view of the right hon. Gentleman's past enthusiasm for the Common Market, I am still a little suspicious of his motives. I do not see why he should be so pompous now. My suspicions about the right hon. Gentleman's enthusiasm for the Common Market may be well founded. After all, the levy system operates in Europe. We have seen it operating in relation to the chicken war. American supplies are to be restricted, with disastrous effects. Will the same sort of thing happen here? If it should, we must realise the danger of retaliation. Hon. Members should also realise that the levy system could work against our producers. It could lead to a rise in the price of feeding stuffs, which, in turn, could materially affect home production.
Our livestock producers were worried about this. If a levy system were intro- 604 duced now, unless we had certain safeguards our livestock producers could find themselves running into grave difficulties. Hon. Gentlemen opposite know that to be true, because on many occasions that view has been expressed by our producers.
§ Mr. Emlyn Hooson (Montgomery)
I understand that the hon. Gentleman is in favour of controlling imports, or at least co-ordinating them with home production. How would he do it, other than by introducing a system of levies?
§ Mr. Soames
The hon. Gentleman says that an alternative to the levy system is control by price. How would he control by price, except by imposing a levy?
§ Mr. Harold Davies (Leek)
If the hon. Gentleman looks at the Bible, he will find that Joseph, in Egypt, knew the answer to this thousands of years ago.
§ Mr. Peart
Are the Government negotiating with France on the question of French meat imports? France is not favourably disposed to the import of New Zealand lamb. Are the Government proposing to make a deal with the French? I suspect that the right hon. Gentleman really is thinking in terms of going into the Common Market. He has not changed his opinion, and that is why people in the industry, and hon. Members in this House—
§ Mr. Peart
I hope that the right hon. Gentleman will wait until I have completed my sentence. I know that he gets touchy when he is criticised. I shall give way in a moment, because I know that he likes to hold the Floor. There is nothing dishonourable in his wanting to 605 join the Common Market, We know that he has been a passionate defender of European unity, so it is not unreasonable to say that he still wants to join the Common Market.
§ Mr. Soames
The hon. Gentleman has again said that the motive behind the Bill is to make it easier for this country to go into the Common Market. I have said, and I repeat, that what we are endeavouring to do is to introduce a system of support which, in the present situation, is the best for agriculture, which needs to be buttressed in this way. The proposals stand on their merits. How often have I to say this before the hon. Gentleman ceases saying that these proposals have been brought in because we are preparing to go into the Common Market?
§ Mr. Peart
On many occasions the right hon. Gentleman and the Government showed quite clearly that they were prepared to enter the Common Market, which would have meant that our system of support would have been drastically altered. The farmer would have had to get his price from the market, with the result that the price of food would have risen. The Government were prepared to accept that, and I am merely suggesting that, now that the negotiations for entry into the Common Market have broken down, the Government may think it is important to build up our own industry so that we can negotiate from a position of strength.
I am still suspicious of the Government. The hon. Member for Yarmouth (Mr. Fell) was a great critic of the Minister. If he is convinced that the Minister has changed his mind, he is indeed naive.
§ Mr. Peart
Again—what a pompous intervention! The hon. Member talks about the probity of the Minister. I am merely saying that I thought that the Minister was a sincere European. I have said this over and over again. I am not condemning him for it, although 606 I disagree with him about it. I am merely wondering whether he still believes this. Perhaps he hopes that negotiations will be reopened, and that Britain will enter. It may be that the levy system which now operates in Europe has inspired him to a change here. However, I will leave it at that. I merely say that I am suspicious. I do not trust Tory Ministers, in a political sense.
I return to the question of marketing. Here again, in dealing with marketing policy, the Minister has repeatedly said, "Leave it to the industry." Now there has been a change, in respect of horticulture, and we are glad of it. As for marketing, time and time again hon. Members on this side of the House have tried to improve the legislation that has been put before us by the Government. The Minister will not mind my saying that we are glad that he has changed, and that he now accepts some responsibility, instead of leaving it all to the industry. This is a welcome change.
I agree that we must wait for the Verdon Smith report on meat. We were promised this report in the autumn, but have not yet received it. There may be good reasons for its not having come out. Perhaps the Secretary of State will be able to tell us when we are likely to have it. It is a major report on marketing, and will no doubt affect Government policy—if it can be affected—on meat marketing.
We accept what the Government have done about horticultural marketing. We tried to make the last major horticulture Bill a better one. We tried to provide more adequate powers. I remember my hon. Friend the Member for Sunderland, North (Mr. Willey) and my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) pressing the Government not only in the House, but in Committee. I remember that when I moved an Amendment which would have given the Horticultural Marketing Council power to advise the Government and to provide information on imports the hon. Member for King's Lynn (Mr Bullard) and the hon. Member for Lowestoft voted against it. We tried to provide a sensible body like the Horticultural Marketing Council with some teeth but we had no support from the hon. Members.
§ Mr. Peart
Because the hon. Member voted against my Amendment. He was one of the guilty men, and he must accept responsibility, as a leading agriculturist in his own party.
We very much welcome this change of heart, which will aid the producer in improving existing horticulture schemes and will give financial support for the development of our markets. The hon. Member for King's Lynn, the hon. Member for Worcestershire, South (Sir P. Agnew), my hon. Friend the Member for Hillsborough and I recently accompanied a delegation to Europe. Its report has been published. There is no doubt that we have lagged behind Europe in the building of markets. I am glad to say that the two Labour-controlled authorities of Coventry and Sheffield have built new markets. But we still have a long way to go, and if we are not careful we shall be left much farther behind by Europe.
The construction of markets and their physical siting is important for the marketing of horticultural produce. Those of us who saw what was happening in Europe, know full well that this is an urgent matter. Our markets need to be reconstructed. We need new markets and a new type of administrative machinery. I do not want to commit anyone on this; I merely ask whether the Government really have a regional plan. It is all very well to talk about throughput, but is there to be a regional plan on market construction? I have asked this question before and I expect an answer from the Secretary of State. It must be of some interest to Scotland. Will special emphasis be laid on regions like Scotland, the north of England, the South-West and elsewhere? It is important that markets should be planned with reference to communications. This raises the old question of the site of Covent Garden.
We also welcome the proposals of the Government in Part III of the Bill which deal with standards and the grading of produce. Here again, the Government are taking tremendous powers. They have at last woken up and are proceeding to intervene. They are not leaving everything to the industry. They are 608 seeking to adopt a positive approach to an important part of marketing. Perhaps we may also have from the Secretary of State an announcement about the creation of a new body with certain executive powers. Is it the intention of the Government to resurrect the Horticultural Marketing Council, or are they prepared to leave the situation as it is, with direct ministerial supervision of grading, and so on, by new personnel who will have to be attracted to the Ministry?
We have discussed broad agricultural policy, import control, the phasing of imports with home production, the giving of wide and sweeping powers to the Minister in relation to import prices, and the power to bring in a levy. This could have good or bad effects; we are not sure yet. That is why we should press this matter constructively in Committee.
The Bill also seeks to make the horticulture industry more viable. After a period of four years it is expected that the industry will be able to stand on its feet, and that tariffs need not be used. In principle, I accept this. We are glad that aid is to be given to the industry on marketing and also on producer co-operation. Whatever we may say about these two aspects of the industry we cannot divorce from international considerations any approach that we make towards building up our agriculture and bringing about a proper food policy.
I still stress the need for a world food programme. I still stress the need to initiate a world food board, and to bring in international commodity agreements such as those mentioned by the Minister. I want these agreements, and I want them to be supervised by a new world food board. The Minister mentioned that the bacon agreement could be a pattern for regional agreements between various sovereign States in the wider Europe. It may be that such agreements can be superseded by something larger. I want agreement on policies in Europe through the O.E.C.D. There is no reason why this should not be done. We have concluded agreements with Denmark and other countries on bacon, and with the Argentine on meat. We must see the pattern of a world food board emerging.
609 This is right, and I want the Minister to take a lead in this matter. This is the sort of leadership we need. The producers support it. At the last great international, agriculture conference, held in Dublin, international agriculture producers declared themselves in support of a world policy. Any import policy must be fitted into the world picture.
To me, it is a tragedy that as we talk about food production in this country, and about the restriction of output, in many parts of the world people are suffering from poverty and starvation. This has been said many times, but I make no apology for repeating it today. We recall the tragedies of the 1920s and 1930s, the burning of crops and the payments to farmers to induce them not to grow too much. It may be summed up in the old Canadian jingle:Here lies the body of Farmer PeteWho died through growing too much wheat.We do not want that to happen again. We must take the lead in creating proper world conditions. I believe that our agricultural system and our techniques are the best in the world and certainly better than anything in Europe. Here we could give the world leadership which is essential and important. Today the tractor and the plough are much more important than the machine gun and the gunboat.
I invite hon. Members to consider the international aspect of this matter. To me, it is common sense to do so and not simply idealism. The idea is supported by the producers of this country, the members of the National Farmers' Unions and the producers in Western Europe as well as in the United States and the Western world. If we could only take the initiative, we should be laying the foundation for a sounder food and agriculture policy in our own country.
§ 5.22 p.m.
§ Sir Richard Nugent (Guildford)
I am glad of the chance to say a word in support of my right hon. Friend for having introduced this Bill. May I begin by welcoming the large measure of support for it which was accorded by the hon. Member for Workington (Mr. Peart). If he will not take it as a compliment, I thought that the hon. Gentleman showed considerable ingenuity in finding some material over which to disagree.
§ Sir R. Nugent
I looked through my copy of the Bill to see whether there was a Part IV concerned with the Common Market, but I did not find one, and so I think that the hon. Member for Workington did well to keep within the rules of order.
I was particularly glad to hear him state roundly that he was in favour of a system of import control and of a standard quantity concept applied to the price guarantee. I am sure that these are right principles that my right hon. Friend has put into the Bill. My only regret about the speech of thehon. Member for Workington was that the commodity commission still remains shrouded in mystery. I shall look forward to hearing more in the next edition.
§ Sir R. Nugent
That may be. We may both have to be careful. I am just interested to hear what is the project in the mind of the hon. Member regarding a commodity commission.
It has been evident to me now for some time—indeed I remember that in February, 1962, in relation to the Supplementary Estimates, we had a figure of £78 million before the House—that the existing system of agricultural price support by the deficiency payment, open-ended, would not stand the test of time in what is today a world seller's market for food contrasted with the buyer's market in which we introduced the system. Let me give credit where it is due and say that I warmly commend the hon. Member and his right hon. Friends for introducing the Measure which become the 1947 Act and which was, of course, the parent of this system. It fell to my right hon. Friends and myself to put that Act into practical form during the 1951–55 Government so that the consumer could have a choice over the counter. But the 1947 Act was the parent of it and is the parent of the idea of extending standard quantities to these commodities now.
611 I think it is true to say that the success of Part I of the Bill depends more on what is not in the Measure than what is in it. The first essential is agreement with our overseas suppliers, and the second is to establish a system of standard quantities for those two major commodities, meat and cereals. I agree with the hon. Member for Workington that our obligations to the Commonwealth, to G.A.T.T. and E.F.T.A. are absolute. On these depend the whole structure of British trade. Without the agreement of these overseas suppliers my right hon. Friend cannot proceed to limit imports at all. I am hopeful that the attraction of having a more stable market here with a more stable price will be strong enough for our overseas suppliers to reckon that on balance it would be worthwhile for them to agree. But we must be quite clear that the quid pro quo for that agreement is the introduction of standard quantities here which ensure that the restraint on overseas suppliers is not taken advantage of by our own producers in order gradually to squeeze them completely out of the market.
This proposal is open to attack on two fronts. First, there is the front dealt with by my right hon. Friend at some length, that it could be damaging to the terms of trade for this country. Secondly, it could be damaging to home production in that it will restrict home production, and the policy is on a knife edge if it is to succeed.
Let me deal with the first point, the terms of trade. It is, of course, vital to our economy that our food imports as well as raw materials should come into this country at prices which are favourable when related to the price level of our exports. This is vital in order to enable us to exist as a country and to maintain our general standard of life. So the level of the minimum price set under Part I of the Bill is absolutely crucial in deciding whether or not this system will operate to the advantage of this country. I was grateful to my right hon. Friend for dealing with this at some length and making plain that this price will be set by a Statutory Order which must be brought before the House so that Parliament may pass judgment on it.
612 As my right hon. Friend explained, normally this price will be set, and should be set, at what might be called a fair world price level, a level which normally would not operate; it would operate only in exceptional circumstances. The result is that so long as it is set at that level the amount of a commodity shut out of this market, which would otherwise have come in at a cheaper price, and which would be kept off the home market by this device, would be relatively small. In the past the quantities which have been sufficient, so to speak, to break the market have been quite small. It has often been said that 2 per cent. either way would cause either a glut or a shortage. The amount is quite small—something of that order. What happens in practice now is that, if the market price for meat or cereals collapses, our overseas suppliers as quickly as they can stop sending supplies here to save themselves from losing on that account.
The real check to further cut-price imports coming to this country which could have an apparent short-term advantage for consumer interest is the volume of home production already here in this market. It is here because it is Government policy to support home agriculture with price guarantees and to make sure that our agriculture is kept on a high and healthy level. This is the basic reason why more cut-price agricultural produce from abroad cannot come into this country. Therefore, the introduction of this minimum price system with levies is no more than a mechanical refinement to supplement existing farm policy.
In practice it will make little difference to the terms of trade and the average price of food in this country. It will operate only seldom and the net amount of food affected and the net price effect will be relatively small provided the minimum price is set at the right level. My right hon. Friend has said that he proposes to deal with meat by a quota system, but I imagine that the sanction, so to speak, to ensure that the agreement is kept is that, if that did not work, although it is the most convenient practical arrangement, he could always switch over to the minimum price system instead.
613 There is a further point in regard to British trade policy that if primary-producer prices fall too low, although there may be a short-term advantage to us as a major buying market, there is a long-term disadvantage to the whole of world trade because the primary producers' purchasing power thereby falls and that in due course is reflected on to manufacturers in this and other countries, because primary producers cannot purchase what they make. Therefore, it is in the general interest that the food prices should be kept at a fair level and not fall catastrophically low.
§ Mr. Harold Davies
It has occurred to me in listening to the interesting speech of the right hon. Member that there would be certain implications in this in the G.A.T.T. I wonder if those implications were considered before the policy was arrived at and what the right hon. Member thinks about that.
§ Sir R. Nugent
I have mentioned the point and did not go into further detail, but we are specifically bound by our obligations under the General Agreement. We would not restrict imports from overseas suppliers without breach of those agreements, which would have very serious implications for our trade throughout the world unless there was agreement between the supplying countries and ourselves. So long as there is such agreement, we are outside the terms of the G.A.T.T. That is what my right hon. Friend has to achieve in his discussions with various countries. I am hopeful that these countries will see that this gives them a prospect of getting a fair share of the British market at a fair price. I do not underestimate the formidable undertaking of my right hon. Friend. Nevertheless, his powers of negotiation are considerable and he certainly has my best wishes.
The second criticism which can be made of this policy is in regard to home production interests. It could be damaging there, because it would restrict home production. I think it would be right to say that every commodity except meat and cereals has some sort of standard quantity built into an agreement in one way or another. There is no novelty about this. On the whole, they work well and fairly and I do not think they create serious hardship. Now 614 my right hon. Friend must consider these two major commodities.
If there has been one common complaint among my friends in the farming community aver recent years it has been continuously that there should be some limitation of imports. This has gone on year after year. Here is a chance to get a limitation of imports, but the quo in the quid pro quo is that farmers here must accept a system of standard quantities if they are to get the limitation of imports which can be got in those circumstances. If they do so they have the prospect of the growth of the market here as it continues to grow with a fairly rapidly rising population and if no change is justified, in very much the same way as the bacon market arrangements to which the hon. Member for Workington referred.
I am quite certain that if this opportunity is not taken the present system will not stand the test of time. The combination of circumstances of greatly increased production here, of large world surpluses, and the fact that the British market is one of the very few—if not the only one—remaining open to world food supplies, will mean that the pressure will be so great that at any time large supplies of food could come here and cause the efficiency payments to shoot up to a cost which no Government could possibly stand. That is the practical issue.
I feel sure that most farmers will say that this is a sound practical proposition which it is in their interests to accept as a fair basis for agricultural policy.
§ Mr. P. Browne
My right hon. Friend speaks with, great authority, and I have been listening with great interest; but I had hope I that he would be more emphatic on one point He said that with standard quantities and control of imports on which we are all agreed—I am glad that the hon. Member for Working-ton (Mr. Peart) also agrees—our farmers have had a chance of enjoying an increasing market. He ought to be more emphatic and to say that they must have their share of the market.
§ Sir R. Nugent
I should not prolong my comments on that point. My hon. Friend has already reminded me that I should limit the length of my remarks. Glad as I should be to discuss this 615 further, I must leave it to other hon. Members.
I wish to say a word or two about horticulture. I congratulate my right hon. Friend most warmly on the Clauses dealing with horticulture. They should take horticultural policy out of the continuous dilemma of post-war years in which its stability has depended on a tariff system which was under constant pressure in the interests of British trade generally. Now the industry is to have a chance to establish itself with this very comprehensive schedule of grants and assistance, to improve its efficiency and make itself completely competitive. I warmly congratulate my right hon. Friend on getting the agreement of the National Farmers' Union to this and, perhaps even more important in regard to the £50 million involved, getting Treasury agreement to the forking out of the money. That is a difficulty which has faced all previous Ministers of Agriculture.
The trend of the day is undoubtedly to reduce tariffs. We see the Kennedy Round coming next year and we all have great hopes of it, but in terms of the trade of this country the progressive reduction of tariffs must be to our general interests. This is bound to put the horticulture tariffs under increasing stress. Therefore, I warmly welcome the alternative policy to give the industry stability.
I should like to express a word of caution to my right hon. Friend. In the review that is intended to take place after four years my right hon. Friend or his successor should look with great care at the sensitive items in the tariff schedule. There should be no certainty that the tariff will be removed at the end of that time. It may still be necessary to maintain it for, perhaps, a few years on some items if the industry is to be kept in reasonable health and productivity. I hope that the Secretary of State for Scotland will give an assurance that that is intended in the Bill.
I agree with ray right hon. Friend that it is a great credit to the leaders of the N.F.U. that they have seen that it is in the interest of the industry to support this wise and far-sighted Measure. I would remind my right hon. Friend that in the whole picture he put before the 616 House the theme of marketing runs continuously. My right hon. Friend has made a valuable contribution to the stimulus of farmers' ideas about taking a greater part in the marketing of their products through the Agricultural Market Development Committee. The N.F.U. has set up a committee to put this into action. It has produced about a hundred schemes to the tune of about £½worth of grant.
However, this is only an ad hoc body and it cannot deal with the academic necessities of research and teaching. The whole structure of agricultural marketing needs to be built up from its foundations. It is necessary for us to think in terms of a permanent body with the duty of having continuing oversight of the development of agriculture and horticultural marketing to see that the necessary research and teaching institutes grow up to meet the needs of the industry of the day. I warmly welcome the Bill and wish my right hon. Friend well with the formidable negotiations that he ahead of him.
§ 5.42 p.m.
§ Mr. Harold Davies (Leek)
I am sure that hon. Members on both sides of the House welcome the Bill and appreciate the amount of work that must be done to implement the policy it contains.
Without wishing to go out of order, I should like to say that I do not understand why the Minister became so testy when he was questioned about whether or not the shadow of the Common Market was involved in all this. However, I will not proceed along those lines because I do not want the right hon. Gentleman to get testy again. We all agree that the National Farmers' Union has one of the strongest lobbies in the country and that it sees to it that hon. Members who are interested in agriculture are briefed. It is because of this that most hon. Members in the Chamber today have been given this blue piece of paper which I hold in my hand.
§ Mr. Davies
Having some knowledge of light and physics, I can assure hon. Members opposite that it depends at which angle one looks at a colour in artificial light. For the moment I will call the document blue. Although the 617 farmers have not had a chance for some
years to see how a Labour Government works, they may recollect, however, that in 1947 Labour's agricultural policy led to them being able for the first time to pay their contributions to the Conservative Party. I hope that hon. Members opposite will not push me too far on this score. Without jocularity, the N.F.U. has rightly welcomed the Bill as one of the first efforts to get stability in the market.
I do not wish to delay the House for long, since other hon. Members wish to speak. I must point out, however, that certain aspects of the Bill need close consideration. We must consider the prices obtained by the producer. We all agree that import control is necessary and, despite the scoffing that goes on on the benches opposite about planning, it is acknowledged throughout the House that if we are to have a modern society and a modern agriculture industry planning is necessary.
British agriculture cannot be left to what are called the free, fresh winds of world competition. Let us hear no more silly scoffing about farming from Whitehall. Some people were prepared to farm from Brussels not long ago, so all this cheap talk we hear about planning must cease. We must get a constructive policy towards the industry and this must entail planning. This planning must be centralised somewhere, and in Britain it happens to be in Whitehall. I am pleased to see that many hon. Members opposite are being converted to our thinking on this subject. I fear that if we are not careful they will take all our clothes—all our policies—and we shall go naked into the General Election. Let us remember that we are getting near to the General Election. I estimated that up till last week the promises made by the Government were worth expenditure of about £12,000 million.
§ Mr. Deputy-Speaker
I hope that the hon. Member will relate whatever figures he is using to the Bill which we are now considering.
§ Mr. Davies
And of that figure of £12,000 million about £55 million is promised by the Bill. I hope that brings me in order. I recall that when the late Hugh Gaitskell promised only £800 million to the electorate we were asked how we intended to find the money. Today we are considering spending £55 million in one go.
It must be accepted that British agriculture can no longer be left purely to private enterprise and the so-called fresh winds of competition. We are now developing an agricultural axiom. British agriculture cannot stand the cold winds of world competition. All hon. Members, even the Liberals, must accept this if the industry is to have a square deal. The Minister faces the problem of giving a fair share of the gross national product to agriculture. Should it be 4 per cent., 4½ per cent. or 5 per cent? No one can say absolutely and mathematically what it should be. In any case, we have too much of an arid, intellectual mathematical approach to too many human problems, especially agriculture.
Without going into the actual mathematics of it, we need to be given a rough idea of what the Government consider should be the true size of the agriculture industry. This will give security to British farming and horticulture. It should then be possible to tell our farmers, "We will need you for the next 20 to 30 years and there will be no great change in the way the industry will be affected." No party has yet worked out what chare of the gross national product should be represented by agriculture.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
Is it not true that the N.E.D.C. has recommended both a percentage of national output as a whole and also an agricultural proportion of it?
§ Mr. Davies
I am grateful to the hon. Member for reminding me of that. Does it suggest that this should be for a definite period of time?
§ Mr. Davies
I thank the hon. Member for adding that, because it puts the right colour on my previous statement and there is no argument between us that 619 there is need for the agricultural and food producing community generally to know what its share will be. Methods can be beaten out in detail, whether or not on the rostrum at a General Election, but whatever the politics may be there are only a limited number of ways of arriving at this objective open to any of us.
In the House over the years a number of hon. and right hon. Members who are interested in horticulture have been urging from the days of the Linlithgow Report in 1923and the Lucas Report that the industry should be looked at carefully. The faults in the present marketing system have been pointed out by both sides. Both sides of the House at different times have tried to make capital out of their approach to the problem, but no attempt has been made to achieve an approximate relationship between horticultural supply and potential demand up to now. This Measure is the first attempt. In present conditions where wholesaling is effected by about 8,000 individual traders it is impossible to minimise conditions of glut and scarcity. We on this side of the House have pointed that out from time to time.
Importers and wholesalers frequently hold back supplies in the hope of higher prices, and when goods are eventually released the effect of gluts are often accentuated. This is one of the anomalies that we have to face. I should like to know what action the Government propose to take if wholesalers are found to be holding up supplies in the hope of creating a false scarcity. Up to recently there have been only 23 main markets for these supplies and this has led to the practice of reconsignment which in the case of Covent Garden has affected 40 per cent. of total consignments received on the market.
If it is Government policy to extend regional marketing, transport becomes an important issue. I think that it is in order to point out that a proper policy of regional marketing cannot be carried out unless there is good rural transport. In this connection, the Beeching inquiry is to be criticised for not having fully consulted the Ministry of Agriculture. The Secretary of State for Scotland, who is now present, will appreciate that we 620 have all received letters from the north of Scotland dealing with the lack of transport in that area. We want road and rail transport co-ordinated to bring fragile and perishable good a quickly to the points of sale.
What other methods would have been open to us if the Government had had the necessary courage? I believe that horticulturists estimate the cost of an acre of glass at between £18,000 and £23,000. Fertilisers are expensive. Some Government must have the courage to break the monopolies in glass manufacture and fertiliser production. In many cases subsidies are not getting through to those for whom they were intended. They are going to the monopolists. I need not develop this subject before an intelligent audience like this. It is true that there are occasions when hon and right hon. Members opposite lack intelligence, but, perhaps contrary to expectation, the agriculturists and horticulturists opposite take a close interest in their subjects. I hope that the Government will look into this matter and will consider whether something can be done.
One of the objectives of agricultural policy in the next five to ten years must be the maintenance of a prosperous agricultural industry. We must try to let agriculturists know what their share of the gross national product is to be. We must keep food prices at a reasonable level, and in all this talking about the farmer we must not forget the consumer and the housewife. There must be fair and reasonable prices for the consumer. This cannot be ensured without a smooth transport system and a system of controls and safeguards.
We must also safeguard our balance of payments by reducing as far as possible and legitimately our imported supplies. We must maintain the interests of our world trade, and markets for our traditional suppliers must also be kept open so that we may have some bargaining power.
Whatever Government come to power, they must face the fact that Government expenditure on agricultural support must ultimately be limited. It must be reduced gradually to try to maintain efficiency in the industry so that the difficulty of having, for example, a Supplementary Estimate of £78 million 621 for deficiency payments may not again confront either side of the House. If the industry is to remain healthy and strong we must on no account be prepared to sacrifice British agriculture mainly to industrialists or to the whims of finance.
Recently some of us had the pleasure of listening to speakers at a meeting of the National Farmers' Association of the Republic of Ireland. I should like to know what policy the Government propose to pursue in relation to Ireland. Fifty-five per cent. of Irish Republic exports come to Britain, and 76 per cent. of the Republic's imports come from our markets. In return, the Irish, per capita, are among the biggest buyers of industrial products in the world. I ask hon. Members to note the qualifying phrase, per capita.As the Irish Republic market is so near, it would be worth while investigating to the full the possibility of securing a better understanding between the Republic and Great Britain on the import of Irish agricultural products at fair prices. The Irish Republic does pretty well out of us. I do not mean that in any pompous sense, but I repeat that this neighbouring source of fresh supplies is well worth looking into.
I give one word of warning. I believe that the British housewife and consumer is beginning to get tired of frozen goods. We are reaching an age when the refrigerator is no longer king. Never mind the television advertisements and the famous brains truster who says that he has never tasted peas so good. We are getting tired of tasteless frozen foods and there is a market for fresh English horticultural produce, if Dr. Beeching will leave us the transport and if we do not clutter up the roads, so that lorries can get from Cornwall to Covent Garden before the food goes rotten. If we want an agricultural policy, we must link it with these things. Therefore, I welcome the Bill. In Committee there will be many questions which we shall want to ask, but I am sure that we shall make this a good Bill.
§ 6.1 p.m.
§ Sit Anthony Hurd (Newbury)
The hon. Member for Leek (Mr. Harold Davies) has given us one of his old-fashioned speeches which must go down very well with those in his constituency.
§ Sir A. Hurd
Perhaps the audience in the hon. Gentleman's constituency are a little old-fashioned. too.
I listened with great interest to the hon. Member for Workington (Mr. Peart) speaking from the Opposition Front Bench. I felt, when he was speaking, that we here may well find—I think that we are finding today—common agreement on the basic fundamental lines of agricultural policy well before they are likely to achieve agreement on a common agricultural policy in Europe. It was per laps, fortunate for us that things turned out as they did in January, and that we have been able to work out our own salvation and our own plans for our agriculture and horticulture according to our needs and circumstances.
Certainly, it has been fortunate for us that we have had, and have today, a Minister of Agriculture who has been very quick to grasp a situation and also well capable of convincing his Cabinet colleagues on the line of action which should be taken and pursued. He is doing a very good job for agriculture and horticulture and I am glad that he is still left where he is in view of the various changes that have taken place in the Government while he has been Minister of Agriculture.
This Bill is another milestone on the road of agricultural policy. I think that it will prove to be as important as the milestones of 1947 and 1957, which I well remember. We are setting out to remodel and develop the country's agricultural and horticultural policy to fit the needs of the day. That was done in 1947, again in 1957. and it is being done again today.
We in the Conservative Party, do not mind facing the need for change and we are prompt to take effective action to meet a new situation. This is what we are doing today. I do not think that it is necessary to argue the case for looking after British agriculture and horticulture. All of us in this House, looking back to the war years and to the peace years of difficulty after the war, and considering the state of the world today and our balance of payments and our world trading problems, recognise the need to use our land fully and to good advantage to strengthen the economy of our country. That, I think, is generally 623 accepted. It is the performance of those on the land which has convinced the politicians that this is the right and proper course for our country.
I regard Part I of the Bill as setting the nation's seal of confidence on the industry's capacity in terms of future achievement. What we are doing is to give the Government of the day powers to safeguard by import controls the share of our market which a fully productive British agriculture should fill. This is an important departure in national policy. It may well be that, armed with these powers, the Government will be able to secure by voluntary agreement the allocation of the market both with our Dominion friends and with foreign suppliers, who will realise that it is to their advantage as well as ours to have a stabilised market and one which is not subject to wild fluctuations in quantities or in prices, which do no good to anyone.
It may well be that we shall get these agreements voluntarily. I hope that we can. But powers are needed to ensure that if there are one or two recalcitrants we can say, "It will be for your good if you come along and agree with the rest of us, rather than force us to apply the sanctions which we have taken the power to apply".
We cannot afford to have a repetition of what happened in the first three or four months of this year over Argentine beef. We remember that because of the dock strike and other troubles in Argentina, in late 1962, there was a hold-over of beef which all came forward in the early months of 1963 and we got the extra load of Argentine beef pitched on to our market, quite regardless of what the market wanted and of the price levels which resulted. The blow was mainly felt by our own home cattle producers and, in turn, by our own taxpayers. We know that the House had to approve a Supplementary Estimate running into millions of pounds in order to make up to home producers the loss of market value which they suffered by reason of this off-loading of extra heavy supplies, unexpectedly and unrequired on to the market.
We have a voluntary agreement on supplies at the moment with the Argentine and that is working quite satisfactorily. But that agreement needs to be fortified and brought into line 624 with a whole chain of agreements to cover meat and other produce, so every supplier to the British market can feel confident that there will be stability and that for his share he will get a fair price.
Here at home we have to take our part in ensuring market stability. As my right hon. Friend the Member for Guildford (Sir R. Nugent) reminded us, we have to accept the principle of standard quantities applied to home production. We have to stake our claim as to how much of our own home market we shall be able to supply in a reasonably economic way and how much will be left for overseas suppliers. How that is divided up among them is a different matter. I presume that that will be dealt with by the Board of Trade. But how much do we expect to enjoy on our own home market. What is the extent of the claim which we shall stake?
We shall have to tie this up very closely, much more closely than we have ever been able to do before. Whether we have commissions, marketing boards, or some other form of marketing institution, we must regularise and phase properly the supplies of home killed meat coming forward month by month. It would be foolish to guess what the arrangements may be until we have had the recommendations of the Verdon Smith Committee, as the hon. Member for Workington said, but, clearly, we must develop marketing institutions to look after our side of the shared market and so be sure that we have a proper channel for, and satisfactory means of regulating and developing, our share.
I was glad to hear from the hon. Member for Workington that the principle of standard quantities being applied to home production is accepted by the Labour Party as an essential contribution which we in this country must make to a stable market, and, indeed, must make if we want to make sense of international commodity agreements or any working together with other countries. We as Members of Parliament must fully accept that, if we mean to go into international agreements with stabilising arrangements for our home market, we must set a target and stake a claim for our own agriculture while, at the same time, being sure that our agriculture is capable of meeting it.
625 What we can do, or what we can properly expect to be done, will vary a great deal with each product. We should like to see the targets set as high as possible, of course. For bacon we know that, at least for the coming year, that 36 per cent. is accepted as the proper share for British agriculture to contribute towards total bacon supply. It is less than the Danes will produce, but they concentrate on that market, and we have the pork market as well. For lamb, I suppose that our proportion might work out at nearer 50 per cent. For beef, it should work out at above 70 per cent.
In my view, we ought to set our sights fairly high, particularly for beef. I notice from the Ministry of Agriculture's annual returns, last June, that we have more beef cattle though fewer dairy cattle in this country now than we had the year before. This means that we have in the pipeline, so to speak, the potential and, indeed, the certainty of extra beef coming from our own pastures and cattle yards. We want to see full encouragement being given to the further expansion of beef production in this country, partly because it suits our farming and partly because world supplies of beef, at least for the next few years, are far from certain. We have had our recent experience with the Argentine—a hold-up for some months and then an overloading of the market. Australia is not so much interested in supplying Britain of late, but is more interested in supplying the United States.
It seems to me that when we think about import controls and the share which British agriculture is to have allocated in this our home market, we must follow the course of deliberately encouraging expansion in certain lines of production. I believe this to be true, particulary in regard to beef. It will be what the market will want and what consumers will appreciate. Therefore, I ask my right hon. Friend to be fully robust when he comes to discuss these market sharing arrangements and to be quite sure that we do not restrict in any way our home production of those foods which we really can produce superbly well and of which supplies from abroad are uncertain. Beef is certainly one of them.
§ Sir A. Hurd
Australia has become more interested in other directions because she gets a better price for her beef in the United States than she does here.
§ Sir A. Hurd
There is no other reason that I know of. Australia is also seeking markets in the Far East and, very wisely, sending some low-quality beef to Italy and other places. Facing the facts of the situation, we should foster and make full allowance for further expansion in certain lines of home production, of which I instance beef as one.
I hope that, as we work out these market shares—it will not be easy—we shall have not only the understanding of Ministers and Members of Parliament who realise that there is a good deal of cross-play of interests to be resolved between different countries, but also the understanding of our farmers that they are undertaking a responsibility to fill a definite share of the market. Our farmers should realise that it is in their interest to fill this share regularly and, we hope, justify a still bigger share in the years ahead. It would be folly to leave the market open to haphazard supplies from home production no less than from overseas. We must arrange that the total supply is not only right in quantity, but is suitably phased through the year so that the consumer, the housewife, may appreciate that her food supplies are assured and she will not pay any considerably greater price. Indeed, she and her husband, as taxpayers, will probably be paying a smaller price under these new arrangements than they have recently been paying in support of British agriculture.
§ 6.17 p.m.
§ Mr. Emlyn Hooson (Montgomery)
In a notable interjection earlier in the debate, the hon. Member for Leek (Mr. Harold Davies) advised the Minister that 627 Joseph, thousands of years ago, had an answer to his problem. I seem to remember that, in implementing his storage policy, Joseph was moved by the expectation of seven lean years. With a General Election in the offing, I am not quite sure what the hon. Member for Leek had in mind.
As has been said by several hon. Members, the Bill marks a very important development in our agriculture policy. For years, we have been the only free food import country, not just in Europe but in the world. During the past few years, there has developed in Western countries an excess of food production over demand. We have to face the facts, and, in the absence of any adequate world plan for distributing surplus food production to the countries which really need it—the under-developed countries which cannot afford to buy through normal trade channels because of their lack of financial resources—it is inevitable that the great food producing countries should look for a market for their surpluses in the one free food importing country left in the world.
There have been those of us who, for years, have argued that it is impossible for this country to remain the only free food market in the world. It is of great significance that probably the greatest advocate of a free market economy in the Western world is the Federal Chancellor of West Germany, Dr. Erhard, but he has never advocated, so far as I know, a free market economy in food supplies, having regard to present world conditions.
If we had pursued the policy hitherto followed in Britain, our agriculture would eventually have been ruined or the subsidy bill would have grown out of all proportion
§ Mr. Hooson
I hear what the hon. Gentleman says. Do I understand that the Labour Party, if returned to power, would reduce it?
§ Mr. Hooson
This Bill is the acknowledgment of the rightness of the view which I have held in common with 628 many other people. I belong to a traditionally free trade party. I am a firm believer in a free market economy. Nevertheless, we believe that it is necessary to have a managed market in agriculture, and the Bill marks the end of the Government's long proclaimed policy of allowing free imports of food into this country and compensating the farmer for his price by subsidies alone.
In spite of what was said in the 1959 General Election, and since, by hon. Members opposite, the Government have now had to acknowledge that free imports of food and subsidies, without anything more, is just not workable in present world conditions. Therefore, in so far as the Bill means that the Government have come nearer to the Liberal point of view, and marks a step in the direction of a managed agricultural market, it is to be welcomed.
I understand from figures supplied by the Board of Trade that our trade balance with our traditional temperate food supply countries has increased heavily during the past year. We now have a very adverse trade balance with Canada, Denmark, Holland, New Zealand and the Argentine. I think that the only exception is Australia, in which case the trade balance is in our favour.
With this background I had thought that it might be possible that the Government's policy would change. I was, perhaps, encouraged in this view by what the Prime Minister said in his speech in the debate on the Address on 12th November. He said:…the producer should have the prospect of adding to his income by increasing his efficiency and producing more."—[Official Report, 12th November, 1963; Vol. 684, c. 45.]The experience of most farmers in this country over the past few years has been that the more efficient they have become, and the more they have consequently produced, the less has been their return from the market because the price of their products has been lowered. Yet the Prime Minister was suggesting that the producer must have the prospect of improving his income by producing more.
How does this fit in with the concept of standard quantities? I gathered from the Minister of Agriculture that he was 629 anxious that, in the case of many commodities, this country should not produce more than a given proportion of the market. I understand that this is also the attitude of the hon. Member for Workington (Mr. Peart), who spoke on behalf of the Opposition. I have never made any secret of the fact that I do not accept this concept of standard quantities for British agriculture. However, be that as it may, is there now to be a change in this policy? What did the Prime Minister mean by advocating that producers should become more efficient and produce more to increase their income? Is there to be any greater increase than a pro rata increase with the increase in population? The level of the standard quantities for home producers? If the Government are sticking to this concept, i.e. of standard quantities, as I gather they are, is there not a strong case for increasing the proportion of the home producer each year, say, by 4 per cent., which is the desired rate of national growth advocated by N.E.D.C.? If they do not believe in increasing the proportion of the market available to the home producer, why not?
I entirely agreed with the hon. Member for Torrington (Mr. P. Browne) when, in an interjection, he said that it was essential for the home producer to have a larger share of the home market.
§ Mr. Prior
We on this side want to see the home producer having a larger share of the market, but the difficulty that we are in, and which the Liberal Party has not yet thought out, is how to obtain the import control that the Liberal Party requires and, at the same time, to honour the trade obligations which we have throughout the world. It is no good saying, as the hon. and learned Member would say, that we will not accept any restrictions on food production at home when that means, in effect, that we would not get agreement on controlling imports that we need.
§ Mr. Hooson
If this country had taken a lead, as we have advocated for a long time, in getting world commodity agreements, this would have helped an enormous amount. We would certainlyrely on a managed agriculture market. We should have to achieve it by phased progress, as is the case with the European Economic Community.
630 The Minister has maintained that the object of the minimum import prices and levies allowable under Clause 1 is not to maintain the home price level and that their sole purpose is to put a floor in the market in the event of certain glut periods. If that is so, do I understand that it is not the Government's intention to reduce the rate of subsidies below the present level, which is running it £360 million per annum? Can the Minister say at what level he expects his import levies to protect the market? I should have thought that, if not in the first year, certainly in subsequent years, minimum import prices and levies were intended to provide part of the support price for the home producer by affording him protection, part of the support price virtually coming from the protected price at the frontier, the other part coming from the subsidy. What percentage is intended to come from import control measures and what percentage from subsidies?
§ Mr. Hooson
I hope that the hon. Member will forgive me if I do not give way. We have listened to several Conservative speeches and will listen to several more. I do not intend to allow the sole Liberal speech to be punctuated by Conservative speeches.
It is not enough for the Government to generalise and simply to state the principles upon which they will work. At this state, we are surely entitled to much more detailed information on this matter. Can the Minister tell us the commodities which he has in mind to which he intends these import control proposals to apply? He has referred to cereals. Will they apply only to cereals? Suppose we do not succeed in achieving agreement on meat supplies by quotas from abroad. Will these proposals apply to meat in that event? Is it intended in the foreseeable future to apply them to horticultural products, and, if so, which horticultural products?
I should like to know how much the Minister proposes to rely on prescribing minimum import price levels, since, as the hon. Member for Lowestoft (Mr. Prior) pointed out in an interjection in the Minister's speech, the Government certainly burnt their fingers over Russian barley. The Russians were supplying us 631 with barley at £17 a ton. In response to a perfectly proper anti-dumping request, the Minister asked the Russians and other suppliers not to sell barley to this country at less than £20 a ton. The delighted Russians and other suppliers simply chalked up their invoices by £3 a ton and they had the benefit of the £3 per ton difference in price.
This is what I understand will happen with the proposal for a minimum import price, which is something different from a levy. Surely the Minister would agree that it is preferable to have a levy, whereby the benefits of the price at the frontier go to the taxpayers rather than to the suppliers who are prepared to supply at a much lower price.
May I pose this example? Suppose that an importing firm in this country has a subsidiary in Australia and it buys wheat in Australia at £16 a ton, and sells it to the principal firm over here at £20 a ton, which is, say, the minimum fixed import price for wheat. That firm is making a killing of £4 a ton. That is bound to happen under the fixed minimum import price. I am sure that all hon. Members would agree that a levy is much more preferable—
§ Mr. John Farr (Harborough)
Clause 1(2) of the Bill says that Her Majesty's Government will have power to charge a levy.
§ Mr. Hooson
Of course. I asked a question of the Minister. Of course the Clause provides for levies or a minimum import price.
§ Mr. Speaker
If the hon. and learned Member who is speaking does not give way, the hon. Member for Harborough (Mr. Farr) must not attempt to interrupt.
§ Mr. Hooson
Would not the Minister agree, from his experience, that minimum import price levels are the worst form of protection for this country and that levies, where they can be applied, are much preferable? There may be objections from G.A.T.T. to levies, but our experience is that with a minimum price import level it is the exporter to this country who benefits and not our country.
632 Before I leave Clause 1, I should like enlightenment from the Minister on subsection (3, a), under whichthe Minister may by order provide for the granting…of allowances or reliefs in respect of the levy (if any) chargeable on the imported commodity.What exactly does this mean? Is the allowance or relief to be granted to the importing merchant in this country, to the exporting merchant in the exporting country or to the country of export? This is not clear from the Bill.
The Minister has said that the objective of the horticultural proposals of the Bill is to make our home industry more efficient to meet greater competition from abroad. The question is, will it make the industry more efficient? I believe that the answer is largely "No". The grower is to have available £24 million in grants, rising, possibly, to £27 million. We must, however, be realistic. In 1960, £8 million was made available in grants to horticultural producers. Only £2½ million of this sum has been taken up.
The grower still has to find two-thirds of the cost, he often has to borrow it and invariably he has to pay more for the project. It is the contractors who will benefit most from this proposal. In the light of the experience of the taking up of the money that was made available for horticultural producers in 1960, I shall be surprised if more than one-quarter of the £24 million is taken up.
What the industry has asked for and lays emphasis upon is an increased grant for the grubbing-out of derelict orchards. Apart from a minor proposal to extend grant to farms with orchards, nothing has been done to meet this wish. Surely, the cost of an increased grant for grubbing-out orchards could come out of the £24 million. This would enormously assist the efficient grower, who sees the markets cluttered up with poor-quality produce from obsolete orchards which should have been grubbed out years ago. An imaginative incentive in this direction from the Ministry would be a worth while project, but nothing is being done.
I ask the Minister, why not a 100 per cent. grant for grubbing out the orchards? This would be of great benefit to the country. However efficient our apple growers, for example, 633 become, I understand that even with efficient production, the yield of the favourite apple in this country—the Cox's Orange Pippin—is about 250 bushels per acre. The continental varieties—I forget their exact names, but "Golden Delicious" is one of the varieties—have an average yield of about 1,000 bushels per acre. No amount of increased efficiency by our producers can change this ratio very much. It would be to the benefit of the country if many of the old orchards were grubbed out and were replanted, not with trees but with other crops.
The grading proposals in the Bill are also inadequate. There is no mention of a minimum grade, for which the industry has been asking. Instead, there is to be the imposition of an arbitrary quality grade, which will not even be statutory at the point of retail sale. The Minister made great play of the protection which is given to consumers. I do not think that there will be any protection to consumers in this respect, because a retailer can buy the graded fruit, he can mix them up with other fruit and there is no obligation, under the Bill, for the retailer to sell in his shop at the grade that he has purchased.
§ Mr. Soames
What advantage does the hon. and learned Member think that a retailer would gain from buying graded produce and then, after all the trouble which has been taken to grade it, mixing it up?
§ Mr. Hooson
That is what retailers do. Some fruit can be bought cheaply and then it is mixed up. For example, if every 1 lb. of apples contained three properly graded apples and one from a cheap ungraded source, an extra profit could be made by retailers. If the consumer is really to benefit, the protection must be extended to the point of retail sale. How can the industry, as an industry, advertise graded apples when there is no guarantee that the shop keeper will conform to the grades at which he has purchased them?
The whole proposals are inadequate to meet the needs of the industry. I do not dispute that many of the proposals in the Bill will be of benefit to the industry, but a bold grubbing-out plan, a workable grading scheme and an assured share of the market are things 634 the growers really need. The Bill does not provide any of these.
A good deal has been said during the debate about the price to the consumer. I regret that there is no sign in the Bill, as in any of the previous Agriculture Acts, of any effort to bring down the distributive costs on the price of food. The distributive cost takes quite a proportion of the price of food which is eventually paid for by the consumer. Nor is there any sign of a determined attack on the costs of farmers' requisites. In 1960, for example, the Monopolies Commission condemned Fisons for acting against the public interest by overcharging farmers for subsidised and tariff-protected fertilisers.
What steps have the Government taken to remedy this wrong? Have they taken any steps? All that has happened is that the Conservative Party has accepted a subsidy from Fisons. Not until we see signs that the Government are prepared to take firm action against monopolies and the cost of farmers' requisites can we believe that there is a determined effort to lower the price of food.
§ 6.28 p.m.
§ Mr. Norman Cole (Bedfordshire, South)
I should like to add my meed of praise to my right hon. Friend the Minister for his courage in introducing the Bill, because it represents a revolutionary change in the importing side of agriculture. As my right hon. Friend said, it is a Bill to provide powers for the fixing of a minimum import price for cereals and also for other products and, if necessary, for imposing a levy.
My right hon. Friend said something more than that which is of great importance and which most of us recognise. The Bill facilitates the continuation of the present support system, to which we are all wedded and which was started in the Agriculture Act, 1947. He might have added that without something like a minimum import price or levy, it would very soon have been impossible to carry on the present system of support prices that functions in this country.
I support something that was said in an intervention by one of my hon. Friends when he said that our farmers must have a larger share of the market. Every hon. Member would agree with 635 that. Without the Bill, however, side by side with that great hope of a larger share would have been the worry that we would not be able by the open-end subsidy to support the increasing amount which was required in proportion to the increase which our own farmers would have of the market.
The farmers are aware of this. Certainly, over recent years, they have been concerned about the ever-mounting cost of this open-end figure, because they get whatever they obtain in that way through Government support only because they do not get it through the market. I am sure that many farmers would much sooner get it in an ordinary market price than have it necessarily in every case coming out of the Exchequer by support.
There are one or two questions I should like to ask my right hon. Friend about Clause 1 of the Bill which, as the hon. Member for Workington (Mr. Peart) has said, is almost a Bill in itself. I am not quite clear whether there would be the same kind of minimum import price fixed for the various countries of origin. I imagine not. First, the Commonwealth countries, then the countries of the European Free Trade Association—the seven countries, including ourselves—then the countries who are in the General Agreement on Tariffs and Trade and, lastly, foreign countries which are not in those previous categories.
One thing has been mentioned in this debate which will have to be thought about in the implementation of this part of the Bill and that is the importation at as low a level as possible of the feeding stuffs used by cattle producers in this country. We do not want to cut off our nose to spite our face. We want to make sure that the animal foodstuffs which it is so necessary for us to import at certain times of the year come in at as reasonable a price a possible.
I would also like to suggest to my right hon. Friend, although I expect that he has thought of it already, that quite a close supervision and, from that, speedy action would be needed by the Ministry to keep the minimum import price level of various products at the right figure from time to time, 636 especially in so far as it has to be done by an affirmative Resolution of Parliament.
This brings me to my next point. Leaving out for the moment the minimum import price, will there, in fact, be any Exchequer income at all arising from the imposition of the levy as distinct from the minimum import price? The hon. and learned Member for Montgomery (Mr. Hooson) gave an example of somebody importing a product into this country. I want to take that a step further. Whichever country of origin was considered, why should they allow one of their poducts to come to this country and for it to have a levy imposed upon it which will come to the British Exchequer when so far as the importer is concerned it will be exactly as if the country of origin had charged a higher price?
In other words, if the consignor receives £16 or £17 a ton and the levy is £3 a ton why should not the consignor in the country of origin charge £20 a ton and have the money in his own pocket? My right hon. Friend did not seem to think that there would be a very large Exchequer income from this. Indeed, I imagine this is not the main purpose of this part of the Bill, and with this I am entirely in support.
Finally, I do not think that it can be said too often that this new pattern will benefit all sections of the community. First, I think that it will make the farmer feel more certain of his position and that he will realise this is being tackled in the changing light of the import scene. Secondly, it will to some extent stop these continual Supplementary Estimates for dealing with the open-end subsidy, and, thirdly, I believe that it will lead to more stable prices to the consumers of agricultural products in this country. Side by side with the average consumer's objection to high prices is also the objection to fluctuating prices, and this stability will have a lot of virtue to commend it.
I turn to the other parts of the Bill, dealing with horticulture, which, with otherhon. Members, I feel has received far too little attention over the years in view of its importance as an industry. Although there have been examples in the Act of 1960 and even earlier, I think it is high time something was done financially to assist this important part of our 637 industry. I am glad to see there are to be grants for agricultural growers and agricultural co-operatives, of which I know something, both in regard to the co-operative markets and for working capital for them, and I am glad to see that for horticulture generally the Horticulture Improvement Scheme will be extended to the production side.
A special point which was mentioned by my right hon. Friend, and which is in the Bill, is the question of assistance for the smaller horticulturists to help them adapt their business to the up-to-date scene. This is most important and is side by side with the credit facilities which are particularly needed in horticulture. We heard a little while ago, from the hon. Member for Leek (Mr. Harold Davies), what it cost to gloss over an acre for horticultural purposes. This needs a great deal of credit or capital, and the Government's going on record as being behind the Agricultural Credit Corporation will be of great assistance.
This is a salutary time for this to be done in view of the number of horticultural holdings which are going out of production in this country, because in many cases it is found that the land is much more valuable for housing projects. All this is decreasing our horticultural production which many of us are sorry to see, and I hope that the Bill will give a shot in the arm to horticulture.
I notice, too, that there will be grants for municipal markets. I admire my right hon. Friend's optimism and hope that he is correct in thinking that over the course of 10 years about £75 million will be spent by the municipal authorities and that, of that, the Government will pay one-third, or £25 million. One of the troubles from which we suffer nowadays is not only the shortage of markets, but the fact that they are in the wrong places for many growers. In my constituency of South Bedfordshire I was talking to a grower who found it much more convenient, presumably both from the point of view of transport and price, to send his goods some distance to the north rather than in other directions. If we have more of these markets spread around it will help very much the convenience of growers and also in relation to the freshness, and the 638 price of produce, allowing for smaller transport costs.
On the matter of compulsory grading, my right hon. Friend referred to the fact that this would be started on apples and pears, tomatoes and cucumbers and possibly cauliflowers. Before he came to the second part of that statement it was going through my mind that I hoped he would not be too speedy in introducing this somewhat revolutionary pattern because we have not all that generally and really seriously taken up grading. However, I see now that he hopes that this will be carried out in the course of three years. I think that that is quite feasible. Side by side with grading I commend to his interest the fact of packaging. Some countries abroad have been very forward in this, and, indeed, there has been a definite start in this country. I hope that with compulsory grading we can read also the word "packaging", because as well as the quality of the goods there is the attractiveness to the purchaser.
Finally, I want to refer to the Bill in general. On a different note, I endorse what was said by the hon. Member for Workington in that it is astonishing that we are talking of restricting imports and of agricultural surpluses when two-thirds of the world, if not starving, has at least not enough food. There is certainly a case for a world food organisation, for this situation should not be tolerated in 1963.
I do not know the present figure of the value of the annual product of our agricultural and horticultural industries but the lest figure heard, some years ago, was £400 million. This has probably risen to half as much again and more by now. We must remember that all this represents essential produce which we must have to feed ourselves. If we did not have this produce, we should have to import all our food. This is, therefore, a contribution to our balance of payments of no small moment and the agricultural community can well be proud of it.
I hope that the Bill will help to make the value of that product even greater and give a fair deal to the consumer, to the farmer and the farm worker and bring more prosperity all round. This is a revolutionary Bill, but I do not 639 think that, in the changing pattern of life, that is necessarily a drawback. Indeed, it may well be a virtue. In agriculture today it certainly is a virtue. There are a number of proposals in the Bill which make a hybrid collection, but they all add up to a series of very important changes. I wish my right hon. Friend well and hope that the Bill reaches the Statute Book speedily.
§ 6.52 p.m.
§ Mr. A. V. Hilton (Norfolk, South-West)
I, too, welcome the Bill, as I welcome any action taken by any Government to improve conditions in agriculture and horticulture, because the majority of my constituents, in one way or another, get their living from the land. I also welcome the Bill because it is designed to benefit the consumer as well. Unlike the hon. and learned Member for Montgomery (Mr. Hooson), I think that the Bill contains a good many things which will be beneficial, especially to the horticultural industry.
The hon. Member for Bedfordshire, South (Mr. Cole) referred to the value of the annual product of the agricultural and horticultural industries. If he checks up on the present figure he will find that it is about £1,800 million a year. He was very much out of date with the figures he quoted.
§ Mr. Hilton
I give the Bill a welcome even although it has only come following the breakdown of the Common Market negotiations. I do not see why the Minister should be so touchy about that breakdown. We all knew each other's attitudes towards the Common Market. We knew his atitude. We know that, had we gone into the Common Market at that time, it would have meant the end for many small farmers in this country.
§ Mr. Hilton
The hon. and learned Member for Montgomery should know, as we all know, that this was the fate of hundreds of thousands of small farmers on the Continent whose coun- 640 tries joined the Common Market and that that fate would have been shared by our small farmers. There is no doubt about it.
There has been a change of attitude in the Minister. He and many of his colleagues have consistently denied that there was anything wrong in the agricultural and horticultural industries. Twice this year we have had deputations from farmers in Norfolk and other parts of the country to hon. Members. I tried to get the Minister to receive a deputation from Norfolk, but he refused. However, apparently he saw a deputation of N.F.U. members from Norfolk about three weeks ago, when his visitors pleaded for a new deal for agriculture.
I am glad that the right hon. Gentleman mentioned today his belief that the Bill will give a new deal to agriculture and horticulture, because that is something that those of us representing rural constituencies are all very anxious to see. I do not want to say very much about Part I of the Bill, because I agree with what myhon. Friend the Member for Workington (Mr. Peart) said—a number of other hon. Members wish to speak and I want to avoid repetition.
However, the proposals for horticulture will be very welcome. It is true that horticulture—in particular, its marketing and grading side—has been sadly neglected, and I am glad that the Bill will give grants to local authorities to build new markets and improve existing ones. This will help to bring new markets to the right places. The hon. Member for Bedfordshire, South pointed out that some markets are not situated in the right areas and I believe that these grants will help to a large extent to remedy this situation.
I also welcome the proposal for grants for grubbing orchards, for there are many neglected acres with very old trees which it is an expensive business to grub out. These grants will have the effect of bringing many acres of valuable land into good production.
We have fallen down in the grading of our produce very badly in the past. There is no doubt that the quality of our produce is as good as that of most other countries.
§ Mr. Hilton
I do not disagree with that, but we have fallen down in the way in which we have presented our goods. I am glad that we are to introduce grading and that it is to be compulsory. I am sure that this is the only way to get growers to fall into line.
Now I want to talk about equipment, especially as it affects the smaller holding. I am all in favour of giving these grants and always have been. But very often the system has meant that the better-off farmer or horticulturist has been able to take advantage of the grants because he is in possession of money to put down in order to qualify for the Government grant. I am pleased that the right hon. Gentleman made reference to the small farmer's position in this connection, and I hope that it will be made easier for the smaller man. The bigger man is often able to look after his own interests in this connection.
I hope that credit facilities will be made available at rates of interest which are not too high. There is no doubt that many small men are prevented from expanding as they wish by present high rates of interest. If the credit is made available and the rates are not too high, it will be welcome.
These proposals can make for a very efficient horticulture, which is what I and all hon. Members representing horticultural areas want to happen. The Minister said that his proposals would bring a new deal in horticulture and agriculture. This is wanted by all hon. Members, especially those on this side of the House. This is what our new statement on agriculture was all about. It ended by saying that we believed that our proposals would bring a new deal for all those engaged in agriculture.
The consumer, the farmer and the horticulturist have all been mentioned, but there is another partner in this important industry. He is the farm worker, the horticultural worker. These men have a splendid record, but the Bill is not likely to benefit them. I had hoped to see some way in which the proposals would benefit the farm worker. The Minister said that the Government's policy was the introduction of a cheap food policy. That is all very well, but the low wage of the farm worker contributes to the 642 cheapness of food in no uncertain way. No section of the community would wish to have cheap food at the expense of the farmer or horticulturist or the farm worker. I should like more co-operation between the Minister of Agriculture and other Ministers to achieve a new deal for the farm worker.
As well as having low wages, farm workers still have the tied-cottage system and can be turned out of their homes for all sorts of reasons. I know of one case in which a man is being turned out of his tied cottage because his son has left the farm for better paid employment. I should like the Minister of Agriculture to co-operate with the Minister of Housing and Local Government to introduce legislation and make that impossible
One of the most important things for the future of our agriculture and horticulture is education. At one time, when I was youngster, the important quality required of anyone wanting to work on a farm was brawn. If he was strong in the arm and thick in the head, he could make a good farm worker. But times have changed and the important quality now is net brawn, but brain. Those entering agriculture must now be trained in the new farming techniques, especially as the number of workers is declining every year. There are many promising farmers and farm workers in Norfolk. For example, there is the School of Agriculture, at Eastern, which is anxious to improve its facilities and train more youngsters.
If the Minister of Agriculture could get the co-operation of the Minister of Education and he, in turn, would allocate sufficient money to extend the School of Agriculture at Easton it would be possible to train very many more young people in the latest farming techniques, this, in turn, would help to achieve the new deal in agriculture.
§ 7.6 p.m.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I, too, welcome the Bill as a considerable step forward in the Government's policy for both agriculture and horticulture. My reservations concern not so much what is in the Bill as what is not, especially in connection with the schemes to be made under powers given by the Bill. The Horticulture Act, 1960, is no more 643 specific and I should be grateful if the Government could be more specific about the direction in which it is intended to use the powers conferred by the Bill in certain respects to which I shall draw attention later.
I should like to comment on a number of topics which have been mentioned already. The first is commodity agreements. It is easy to utter the phrase "commodity agreement", but it is extremely difficult to secure commodity agreements and to ensure that they work as intended. Any hon. Member who has followed the history of the international coffee agreement, for example, will have noticed that the high-quality producers are being squeezed more and more each year by the low-quality producers. More specifically, Brazil is being squeezed by Africa. The more prolific low-quality bean is ousting the high-quality bean.
To some extent there is an analogy with British agricultural products and imported agricultural products. The imported product tends to be not only cheaper, but inferior. Sometimes the inferior quality has the larger market because, while being inferior, it is consistent and in many cases both the market itself and those who buy from it prefer consistency to high quality. In many respects we already have high quality and it is the easier of the two tasks to get high quality by grading than to produce to a quality which we do not yet know how to meet. That is why I welcome the grading proposals so far as they go.
The hon. and learned Member for Montgomery (Mr. Hooson) said that he had a strong preference for the levy system over the minimum import system. In theory, I agree, but, in practice, I am not so sure, because there are many grounds for saying that if we want to take a moral position of a fair return to our own producers, we cannot very well encourage overseas primary producers to sell their products at dumping rates. I would rather that producers throughout the world sold their products at a fair price than that they were encouraged to dump them and then pay the levy.
My agreement with the hon. and learned Member remains theoretical, but in practical terms there are some situa- 644 tions in which the levy is more practical. Certainly, in dealing with a Communist country I would much rather that the public had the benefit by importing absolutely the minimum quantity possible whether for good or bad reasons—and I hope only good—at the minimum price, than putting the largest possible levy on it. But for every other country with whom we enjoy better relations I can see a considerable case for saying that that quantity which we feel is just should come in at a fair price, of which the producer gets the benefit, rather than come in at what one might call a "sweated labour" price.
I turn now to specific provisions in the Bill. The tomato growing industry is one of the major sections of the horticultural industry, and I would be grateful if my hon. Friend would say whether one of the major ways of improving the efficiency of the tomato growing industry, namely, the replacement of obsolete glasshouse equipment, will or will not be covered by the grant provision, particularly that in Clause 6. It was partially for that reason that I referred to the Horticulture Act, 1960, for guidance, which alas I could not find. I take it that this information will be given in the details of the scheme.
To continue that line of thought, does Clause 6 merely put more money into the existing scheme, or does it broaden it? I thought that I understood earlier from my right hon. Friend that it was his intention to broaden the scheme to cover aspects which are not covered at the moment. An important one is this question of the efficiency of glass house construction, which, to a large extent, is a function of the date when it was constructed.
The British tomato growing industry will always have a natural disadvantage in that it does not get as many hours of sunshine, or sunshine of the same intensity, as some of its competitors, particularly those in Italy. It is therefore necessary that the technical standard of glasshouses in the British industry is to the latest specification. The profit margin in this industry is so low, and the yield per acre has to be so high to achieve any profit margin at all, that it is necessary for a grant of this kind to be made available to the growers.
645 I can appreciate some of the reasons why there should be an acreage limitation, although it seems a little inconsistent not to have an acreage limitation on farm improvement schemes, and yet to have one on horticulture improvement schemes, though I take it that the analogy would be between the Small Farmer Scheme and the small horticulturists scheme herein contained. The logic which I do not follow is that which allies an acreage of glass or horticulture to an acreage of farmland. The reason for that is not immediately apparent to me.
Whether or not a certain acreage of horticultural land is in need of, and would benefit from, a grant, I should have thought was independent of the number of completely dissociated agricultural acres which may constitute a holding. I think that it would be better if, when the scheme is drawn up—it is not in the Bill—the number of agricultural acres held were excluded from any relevance to inclusion in or extension from the small horticulturist scheme, if I may apply that term to it.
There are a number of important points to bear in mind when we consider standard quantities. It is not only the total amount of the standard quantity that matters. The steps down from, or beyond, that standard quantity which must also be considered, because, as one knows, even with the most careful management of an individual farm it is not possible to determine to the last unit of output what the total output will be in a given year because many of the influencing factors—primarily the weather—are beyond the wit of man to control, or accurately to predict, despite the latest attempts by the Meteorological Office.
Therefore, if, at the first step beyond the standard quantity, the drop in guarantee is such that the profit margin is reduced to nothing, or to a minus quantity, it cannot be regarded as a satisfactory form of guarantee. A guarantee is satisfactory only if it can be met by reasonable people acting with reasonable prudence, and excluding the effects of elements which are literally beyond the control of both the farming industry and the individual farmer.
A much fairer system is to say that at points of output beyond the standard 646 quantity the total sum of money, which is the product of the guaranteed price and the standard quantity, shall merely be divided by the greater output. That would, of course, result in a falling off of income to the producers. There would, therefore, be a definite discouragement and disincentive to them collectively to go beyond that point, but it would not reach the punitive conditions which a sharply stepped system can reach.
It is also necessary to ensure that the standard quantity increases each year, with the proviso that once saturation point is approached it would obviously be ridiculous to continue to increase it. But it is true to say that exhortations to greater efficiency mean exhortations to get a greater throughput for a given capital application, and that necessarily results in greater output.
In the past, when a standard quantity has been applied to a limited range of agricultural produce it has been possible for some producers to transfer a proportion, or all, of their output of one commodity to which a standard quantity has been applied to another line of production for which the standard quantity has not been applied. That is all very well so long as standard quantities are applied only to a restricted range of agricultural products. But if it is adopted as a concept right across the board, the first thing that happens is that it becomes ineffective as a means of persuading marginal producers, whose land is suitable for producing a number of different types of products, to switch from one product to the other. I think that we must consider the standard quantity system not only in terms of pure arithmetic, but in terms of practicability in an industry which does not practise an exact science. That is, and must be, the limitation applied to it.
I am glad that the Bill gives further positive encouragement to improvements in marketing. There is no doubt that the marketing conditions in this country are inadequate and unsatisfactory both for the producer and for the consumer. The hon. Member for Leek (Mr. Harold Davies) rightly drew attention to the need, particularly when dealing with horticultural commodities, for a reliable means of transport from the producer to the wholesale market. We must emphasise not only the speed of the service, but its timing, so that the produce arrives in time 647 for each day's market. We must also emphasise the physical nature of the conveyance. The produce must be free from shocks which are likely to damage it. This is what I mean by a reliable and satisfactory transport service.
Lastly, in any system of agricultural support which involves a rolling average or an anticipation of annual output, when it becomes apparent—as it has this year—that the total pig production, for example, will be less than the Ministry forecast, that Ministry forecast must be adjusted, instead of the Ministry's living in a world which it must be quite obvious bears no relation to the reality which will be achieved. In other words, it is necessary that the predictive machinery shall be elastic enough to comprehend what has been happening in the months up to date in a given year. If my right hon. Friend looks at the pig subsidy this year he will find that the assumed annual rate of output is in excess and that, therefore, the stepped standard quantity payments are lower than they would be if the real out-turn were assumed now, instead of an excessively large out-turn.
I congratulate my right hon. Friend on introducing the Bill and on recognising—which it is not always easy to do publicly—that internal marketing and import conditions have changed significantly. It is true that we did not get into the Common Market. It is possible that there will not be a Common Market to get into in a year's time. The disruptive forces within the Common Market are at least as strong as the cohesive ones, and it is interesting to note that what is proving to be the greatest single disruptive force is the difficulty—a difficulty which the Minister and the House expected—of negotiating adequate safeguards for the agrciultural community which this House and the Government represent.
Although many of us were anxious to get into the Common Market on conditions which were adequate to safeguard British agriculture, at no time did we express certainty that those conditions would be capable of achievement. This is the point which the hon. Member for Workington (Mr. Peart) missed in his observations on the subject. It is one thing to express a determination to aim at a target, but it is both excessively immodest and unwise to express the con- 648 viction that one will hit it, especially if the target is being manipulated by a third party.
As I have said, I extend a welcome to the Bill, but I hope not only that it will undergo further elucidation through my right hon. Friend's winding-up speech tonight, but, if possible, that more will be written into it specifically in Committee, and less will be left in the form of schemes which are not subject to amendment during any stage of the Bill's passage through the House.
§ 7.23 p.m.
§ Mr. A. E. Oram (East Ham, South)
It is because the Bill contains important provisions for the improvement of horticultural marketing, especially by encouraging co-operative societies, and because it proposes to bring about compulsory grading, that I am prepared to support it. The warmth of my support, however, does not match that of many hon. Members who have already spoken from both sides of the House.
I welcome the provisions for encouraging co-operatives, and for grading, because they are ideas which hon. Members on this side of the House have consistently put forward for many years. We accept as flattery this additional imitation of our policies—a process of which we have been getting an increasing number of examples in the last few months. But there is a piece of imitation in the Bill which I find less pleasing. When I read the first few paragraphs of the Explanatory Memorandum and found that the Bill would give the Minister of Agriculture powers to set minimum import prices and to impose levies I was led immediately to think—as other hon. Members obviously were—of the Common Market.
Other hon. Members have made the point, but it is worth making again, that the Minister was particularly jumpy when my hon. Friend the Member for Workington (Mr. Peart) challenged him on the question whether there was some connection between the Bill and our previous attempts—and possibly our continuing attempts—to enter the Common Market.
It is not surprising that this point should have been brought out. Part I has not been thought up merely in the 649 last few weeks or months. Thought has been given to this question over the last two years—over the period when it was obvious that the Government were set upon taking us, almost at any cost, into the Common Market. In my view, the machinery set up under the Bill was intended, when first thought out, to be part of the means whereby this country would be hinged to the European Common Market.
I fully accept what the Minister said, namely, that the immediate motive for bringing it in, and—in his mind—the continuing value of this piece of machinery, was to provide for the drastic things that often occur in connection with deficiency payment schemes. That was no doubt the particular and immediate motive for the Bill, but it is not too extravagant to suggest that there is a direct connection between this piece of legislation and the negotiations for British entry into the Common Market.
I have some strong reservations about the central principle of Part I—the setting of minimum import prices and the raising of levies. I do not reject it out of hand, because it is only a piece of machinery, and we cannot judge it until we see the way in which it is used. The more important things for us to consider will be the Orders introduced under the powers proposed in the Bill. When those Orders are introduced the House will need to be particularly vigilant.
A great deal also depends on who will exercise the powers conferred by the Bill—what kind of Minister, and what kind of Ministry. I do not wish to discuss the question of the Government that will be in power. I merely wish to raise the question of the nature of the Ministry and Minister. As I indicated when I intervened in the Minister's speech, I believe that what is at stake here is the cost of living and the well-being of housewives. This machinery which is being set up and which will solve, or help to solve, the problem with which we are faced about the open-ended subsidy system, could provide a satisfactory floor on which the farming community might find security. The farmer could be happy; the taxpayer might get some relief. But it is my fear that as a result of the use of this 650 machinery the housewife may be called on to food the bill. When that sort of decision has to be made, I am not happy that the Minister who, in effect, makes the decision is a Minister almost entirely devoted to the interests of the farming community. That is the situation in respect of the present Minister of Agriculture.
Earlier the right hon. Gentleman was reminded that he is not only Minister of Agriculture but Minister of Fisheries and of Food. This is true, but I suggest that, although that is a nice balanced name, we have not got a nice balanced Ministry. If the activities of the present Ministry were analysed, we should find that in respect of nine out of ten of the decisions taken and of the conferences held and the memoranda produced, the Ministry had in mind the interests of the farming community and the agriculture industry. I make no complaint about that. It is the purpose of a Ministry of Agriculture.
I complain about the pretence that it is a balanced Ministry capable of weighing up the interests of the farming community and of the consumer and, in these vital questions of raising import levies, deciding what is the fair balance. I do not believe that we shall get the right sort of decision with this kind of Ministry. We need either a more balanced Ministry or—providing the right sort of countervailing power within the Cabinet—a Minister equally concerned with these powers and equally capable of influencing the way in which the powers are exercised; be it the President of the Board of Trade or a special Ministry constituted to look after the interests of the consumer. In some way some balance in the decision making is necessary. Only in such a situation, with that sort of Ministry reaching a decision in connection with the first part of the Bill, should I be at all happy.
There are one or two more detailed points in connection with the second and third parts of the Bill to which I wish to refer. First, in relation to Clause 4 where the principle of the one-third grant, one-third of the amount of the money required, has been brought forward from the 1960 Act, I wonder whether Sufficient thought has been 651 given to the difficulties faced by co-operative societies in raising the other two-thirds. The Minister referred to this, but he seemed to be referring—possibly the Bill is intended to refer-to working capital rather than to the provision of permanent or long-term capital. Here there will be a real difficulty for a group of horticulturists to be able to provide from their collective resources sufficient capital to meet the necessary two-thirds to set up a scheme under the Bill.
There are such things as the limitation under the Industrial Provident Societies Act to £1,000 share capital per member. There is the way in which the Profits Tax works adversely against the accumulation of funds by co-operative societies. We have debated these points on other occasions, but I notice that co-operative societies which have been stimulated by the 1960Act are registering under the Companies Act rather than under the Industrial and Provident Societies Act. This shows a weakness in the financial aspects of the Bill, because these registrations are an endeavour to overcome the handicaps which the societies would face if they registered under the Industrial and Provident Societies Act. If societies are forced to do that, it seems to me that it is not encouraging true co-operative methods in horticulture, and I hope that that point will be looked at.
I welcome the fact that in Clause 5 a secondary co-operative is to qualify for a grant. This, in my view, corrects a weakness in the 1960 Act under which it was only primary co-operatives which could qualify. But even under the provisions of the Bill the secondary co-operative, I understand, qualifies for a grant only in respect of "conducting a market". During the Committee stage discussions we shall have to explore exactly what the Minister has in mind in using that phrase. Why confine this to conducting a market? Why is it not proper for a secondary co operative society to engage in the construction of storage space or, for instance, in transport activities? If the principle is good and the need is manifest in respect of "conducting a market", it would seem equally necessary for there to be grants in respect of other spheres of the society's operation.
652 One important point which occurs to me from a constituency sense is in respect of Clause 9 which makes provision for grants for national markets. My hon. Friend the Member for Workington made a brief reference to the re-siting of Covent Garden Market. I am particularly interested in this, because I know that there is at least one proposal that Covent Garden market should be sited at Beckton in my constituency. There has been a report that that would be an ideal site and I shall be interested to know whether the Minister anticipates making a grant under the provisions of Clause 9 of this Bill for the transfer of Covent Garden Market in this way. It may appear that this is a good site, viewed from the Metropolitan angle and from the national angle. But I must warn the Minister that from the local point of view there are very important traffic, town-planning and housing problems associated with this project which will need very careful examination before any such scheme is undertaken.
These are among the points which, as was said by my hon. Friend the Member for Workington, we shall require to discuss during the Committee stage. On the whole our attitude to this Bill will be one of constructive criticism. There are a number of points on which we shall need a great deal more information and there are a number of ways in which, in my view, the provisions in the Bill could be strengthened. But these are matters to be dealt with at a later stage. My purpose in intervening in this debate is to call attention to what I consider very serious dangers, from the point of view of the consumer, which are inherent in the implementation of the provisions in Part I of the Bill. Unless we watch very closely the Orders which will be made under this Measure there are dangers that the Government—from their point of view quite sincerely—in seeking to protect the taxpayer from the ever-increasing burden of deficiency payments, and in attempting to give security to the farm community, may do so in a way which will transfer those burdens straight on to the backs of the house wives.
§ 7.40 p.m.
§ Captain L. P. S. Orr (Down, South)
At this stage of the debate it may be some relief to my hon. Friends who wish 653 to speak to know that I shall be very brief indeed, and very parochial. The debate has shown that there is not only a wide measure of support for the Bill, but that almost every argument in support of it has been deployed from both sides of the House. I do not think that I need add to them except to say that it is obviously right that in present conditions we should now move away from the system of subsidies and seek new arrangements.
In Northern Ireland, we certainly approve what the first part of the Bill will do. I want, however, to say a word about the effect of the Bill on Northern Ireland. Sometimes, listening to debates in this House, one would imagine that Northern Ireland was primarily an industrial community. I ought to remind the House that, in fact, Northern Ireland is primarily an agricultural community. By any yardstick agriculture is our greatest and most important industry and it is in the true sense of the word vital to our very life.
Our agriculture is somewhat different from that which obtains in England in that our farms are very small indeed. I saw some figures this morning which might surprise my hon. Friends. Farmers on almost half our farms enjoy an income of less than £500 a year and almost a quarter of our farms provide an income of less than £300 a year. That is for various historical reasons. It is due primarily to the fact that our farmers are not tenant farmers but mostly own their land. Consequently, the move towards rationalisation and greater units is bound to be slow and to be resisted. A man does not like surrendering any part of the ownership of land which has been owned by his family for some time.
Our agriculture is not in a position to supply itself to any great degree with necessary feedingstuffs. In Northern Ireland, we can produce only about a fifth of the feedingstuffs we need and our agriculture is principally livestock feeding, pigs, poultry, eggs and milk. We are very dependent, therefore, on feedingstuffs. 'What is causing our people some anxiety is the question of the minimum import prices. We were certainly reassured when the Minister, moving the Second Reading, said that he did not expect the minimum import price to result in any appreciable rise in the cost 654 of imported feedingstuffs. But supposing the Minister's forecasts were falsified, and there were to be a rise in the minimum import price, that would have a peculiarly damaging effect in Northern Ireland, much more than in the rest of the United Kingdom.
The livestock producer in Britain can fail back to some extent on home-produced cereal, whereas the producer in Northern Ireland cannot do that. He has still to be an importer, if only from the rest of the United Kingdom, and faces the high cost of transport across the Irish Sea. It might be necessary in future, should the price of feedingstuffs rise, to seek some provision whereby we would have special treatment in this respect. We may have to return to this question in Committee. There is a precedent in our remoteness grant. It is a very respectable aid desirable precedent and one to which we would have no objection to being used again if necessary, although, of course, we hope that it will not. I should be grateful if the Minister—I believe it is to be the Secretary of State for Scotland—in winding-up the debate, will say something about this, because it is causing great concern.
I should like to tell my farming community something which is reassuring and if my right hon. Friend can give an assurance that, whatever may happen to the future of prices of imported cereals, at least machinery will be thought out to ensure that the cost of feedingstuffs in Northern Ireland shall not rise above that obtaining in the rest of the United Kingdom, I should be reasonably satisfied.
§ Mr. Peart
The hon. and gallant Member is making a very important point, which I raised in a general way. Surely he would still be concerned if the price of feedingstuffs rose because of the special characteristics of Northern Ireland agriculture. I thought that that was the case. Despite the argument whether the price would be the same as that in the rest of the United Kingdom, as it must inevitably be, in view of what he said, Northern Ireland would still be in difficulties.
§ Captain Orr
I was not concerned to make the general argument. I said at the beginning of my speech that I intended to be parochial and that I was 655 making a peculiarly parochial point. I see the force of the argument that care must be taken to see that in fixing the minimum import price we do not starve ourselves of the necessary feedingstuffs, or put the price of them too high for home producers. What I am concerned about is that, should there be any rise at all, Northern Ireland producers should not be at a disadvantage in comparison with those in the rest of the United Kingdom.
I think that the Government are right in leaving for decision by the Parliament of Northern Ireland the application of provisions for horticulture. The Bill allows the Parliament of Northern Ireland, notwithstanding anything in the Government of Northern Ireland Act, 1920, to follow the general pattern. What the Government here are doing in respect of horticulture is absolutely right. I hope that the Parliament in Northern Ireland will follow in line. It is not only a question of following. I cannot help making this point. Someone said that the question of compulsory grading of horticultural products was something new which had recently been thought up. In fact, the Government of Northern Ireland have insisted on grading of apples since 1931.
I believe that it was the hon. Member for Leek (Mr. Harold Davies) who mentioned the Irish Republic. When my right hon. Friend replies to the debate I hope that he will tell us whether or not there are to be special arrangements about imports from the Irish Republic. From my reading of the Bill it seems that the Irish Republic is in precisely the same position as any other country from which we import. This question should be clarified and I should be grateful if the Minister will clarify it.
§ 7.50 p.m.
§ Mr. Guy Barnett (Dorset, South)
Like the hon. Member for Down, South (Captain Orr), I do not intend to detain the House for long. I hope that he will excuse me if I do not comment at length on his remarks since, as he admitted, they were largely parochial in content and I regret to say that I have never visited Northern Ireland. I was interested in his comments on feeding stuffs, because my constituents are similarly worried about this matter.
656 At the beginning of his speech the hon. and gallant Member referred to the Government moving away from subsidy. I hope that he misinterpreted the words used by the Minister because as I listened to his right hon. Friend I got the impression that there was no intention of doing away with the deficiency payments system. I understood the right hon. Gentleman to say that the intention of the Bill was to reinforce the system and enable it to remain in being, thus providing the means whereby the system could operate without the bill becoming bigger each year.
It is worth pointing out that there is a strong case for subsidy in agriculture. The Farmer and Stock-breeder stated in an editorial on 3rd December:We agree fully with the principle of making both agriculture and horticulture as far as possible independent of support.The article was commenting on the Bill. But it would be wrong for the general impression to get abroad—a wrong impression, I hope—that the aim of the Bill is first towards the disappearance of the agricultural subsidy. I believe that the subsidy is here to stay and that we will see it for many years to come. I also believe that it can be a good investment.
I use the words "can be" because a large proportion of the subsidy is going to places where it does the least good; for instance, part of it goes towards the monopolies, as my hon. Friend the Member for Leek (Mr. Harold Davies) pointed out. Far too large a proportion of it goes to the large-scale producer who is capable of standing on his own feet. Too small a proportion goes to the small man.
Despite this, it is a good investment. I appreciate that in some ways it is unpopular with the farming community because it allows the impression to get around among those who know little about it that the industry is not efficient. It is highly efficient, as all hon. Members who represent farming constituencies know. It also tends to be unpopular with the taxpayer, for obvious reasons. We should, therefore, take every opportunity to say that it can and should provide for agricultural stability and efficiency, that in times when the terms of trade are moving strongly against us, which may happen again, it can prove 657 an excellent investment and that a subsidy should be capable of providing the industry with a fair return for the work that is done.
In his speech the Minister mentioned the 1947 Act and his desire to maintain its principles. It is worth remembering that in the opening words of that Act we read that its aims were to provide for the…proper remuneration and living conditions for farmers and workers in agriculture and an adequate return on capital invested in the industry".In a debate on a Bill of this kind, a Bill which has been described as the most important Measure on agriculture since the 1947 Act, it is worth remembering the principles underlining that Act.
Workers and farmers have not been keeping pace with the rising standards of prosperity throughout the community and hon. Members who represent constituencies in the South-West, where there is a large proportion of small farmers relying to a large extent on milk production, know that these small men face a serious situation. Beneath the surface there are signs of appalling poverty among some of the small farmers, who are having to rely on annually decreasing incomes. We know of the extreme annoyance that was felt by milk producers in the South-West after the Annual Price Review this year and we had an indication of how they feel about the tiny incomes they receive.
I was glad that one of my hon. Friends mentioned the plight of agricultural workers and the fact that their wages have not kept pace with those of industry generally. We need to tackle this problem, which is related to the whole business of supplying a reasonable subsidy to the agricultural industry and seeing that it goes where it can do the most good.
I was in Denmark a few months ago and learned with interest that even there they are finding it necessary to have an agricultural subsidy. This shows that there is nothing we need be ashamed of in giving one, so long as it goes to the right people. I mention the agricultural worker not merely because he should be given justice in terms of pay, but because he is becoming an increasingly skilled man and deserves a proper 658 monetary return for his skill. I also mention him because the efficiency of the industry depends on the standard of skill of the workers in it.
It has been pointed out that brains and not brawn are needed by the industry today. I could not agree more, mainly because of the increasing industrial opportunities that are becoming available in the rural areas and which will become more available in future. This is because the industry, with increasing mechanisation, will not be as dependent as it has been on human labour. It is only right, therefore, that other opportunities of employment should be available in the rural areas. If we provide these opportunities we will also be providing a counter-attraction for agricultural workers. Farmers are, naturally, worried about this, because they consider that it will draw their best men away into industry. They are worried, too, because they know that at present they cannot pay the kind of wages to enable them to compete with industries which moves into their areas.
I hope, therefore, that the Government will give their attention to the subject, because I do not get the impression from the Bill that it will provide for a rise in the standard of incomes throughout the agricultural industry and I believe that this is one of the essential factors. I admit that some of the provisions of the Bill will go in that direction, but something much more radical needs to be done for agriculture if it is to have the kind of return which it ought to receive for the work put in and the capital invested in it.
Part II of the Bill goes into methods of improving the horticultural industry and also improving marketing, which of course is an essential part of it. I am glad that reference has been made in the debate to the importance of transport in this respect. The improvement of transport facilities is as important as the improvement of market facilities in the areas. I hope that the Ministry of Agriculture will maintain close contact with the Ministry of Transport to ensure that in agricultural areas, and particularly where horticultural products are produced, adequate facilities are available for the transport of goods to market.
659 Like my hon. Friends, I welcome the Bill as a step in the right direction, but I do not think that the step goes far enough. Many points have been made from this side of the House emphasising serious deficiencies in the Bill, but as a step in the right direction I welcome it.
§ 8.2 p.m.
§ Mr. John Farr (Harborough)
I trust that the hon. Member for Dorset, South (Mr. Barnett) will forgive me if I do not follow him closely in his remarks. He said they were of a fairly parochial nature, perhaps especially concerned with the South-West.
Before dealing briefly with the Bill, I would like to refer to the comment of the hon. Member for Norfolk, South-West (Mr. Hilton) that he could not see a great deal in the Bill for farm workers. It is true that I can see no specific reference in it to the conditions of farm workers, but I feel that the hon. Member will recognise, as he always does in his sensible and good-humoured manner, that in the Bill the prosperity of farm workers is tied up with the prosperity of farmers and market gardeners.
We cannot have the one without the other, but I am sure that the improvements embodied in the Bill and the additional grants which will be made, especially to horticulture, will be reflected in better living, better working conditions and better machines and tools to handle for the farm worker and the market garden worker.
While I want to follow the Bill probably more closely than did the hon. Member for Workington (Mr. Peart), I should like to refer to his remarks about the Common Market. As we look from this side of the Channel at what is happening in Europe, with the Common Market Six literally at sixes and sevens, and we compare the wrangling going on over the agricultural set-up of the Common Market nations with our own steady progress since our efforts to associate ourselves with them collapsed, I think we should thank our lucky stars that our efforts to enter into association with the Common Market ended when they did.
To deal in more detail with the Bill, welcome almost unreservedly Parts and III, both relating to horticulture.
660 Together, they will better enable horticulture to stand upon its own feet and meet the blasts of competition from wherever they come. I should like to know why retail sales are excluded from the arrangements for grading proposed in these two parts. Hon. Members on both sides of the House have referred in this interesting and constructive debate to the need to improve the standards of quality of vegetables and fruit produced in this country. I should have thought that the point at which improvement would be most felt would be in the retail trade. The housewife will go to the greengrocer and will see our non-graded vegetables and fruit on sale with foreign products which will be graded to a very high standard, and, of course, our home producers will suffer by the comparison.
I hope that when he replies to the debate my right hon. Friend the Secretary of State for Scotland will be able to tell us when he considers it likely that the first products for grading will be designated. I gather that grading will apply in the first place probably to apples, pears, tomatoes and cucumbers, but I should like to know when it is expected that the first of the grading orders will be made. I assume that it will take some time to train the necessary staff and establish the necessary organisation. I should much appreciate an answer on the point.
I commend the Parliamentary draftsmen on compressing into fewer than 100 lines in Part I words which are of such importance and significance to British agriculture. I believe that hon. Members on both sides of the House will agree with the power that will be placed in the hands of the Ministry of Agriculture and that they believe it is a right and proper power for him to have. I only wish that he had been granted this power years ago. If he had possessed this facility for rapid action to counter foreign dumping it would have made a vast difference to the moneys which the Exchequer has had to find by way of deficiency payments.
The present machinery of the Customs Duties (Dumping and Subsidies) Act, 1957, has proved, in practice, altogether too cumbersome and slow. This procedure has often resulted in the stable door being shut after the horse has gone. I 661 am pleased to see that the procedure laid down in the Bill should be capable of much easier and more rapid application.
I should like to know whether the consultation which the Bill says the Minister must have with the Treasury would be likely to be long or prolonged before he could make an Order relating to an import levy. Part I contains legislation which will fit into the future pattern of agriculture as envisaged by my right hon. Friend the Minister of Agriculture. It is a pattern which will involve home meat and cereal production fitting into the standard quantity concept. I congratulate my right hon. Friend on this bold and far-seeing blueprint of which the Bill is the first and probably the most important part. I would emphasise particularly, as has been emphasised by hon. Members on both sides, that it is essential that home producers should have a chance to increase production.
I am encouraged by the statements made recently by my right hon. Friend the Minister of Agriculture, Fisheries and Food and my right hon. Friend the Prime Minister. They both said that they intended to see that our farmers, by increasing efficiency and producing more, would be allowed to share in the high standard of living which all sections of our community now enjoy and which, incidentally, during recent years, has far outstripped the standard of living of those engaged in the agricultural industry.
References have been made to the recent agreement which has been concluded on the importation of foreign bacon and ham to our home market. Hon. Members expressed approval of the 36.5 per cent. share of this market in bacon and ham which has been allotted, as a result of the agreement, to our own producers. I do not particularly like the idea that this pattern of agreement may perhaps be the herald for others. If one goes back only a few years, one sees that pattern of bacon and ham imports to this country was very different from what it is today. For instance, only eight years ago, the vast majority of bacon and ham consumed in this country was produced here. In fact, eight years ago, we consumed 240,000 tons of home-grown bacon and ham and Denmark exported only 220,000 tons.
662 In subsequent years, the pattern has radically changed. Home-grown production has declined and Danish production has soared upwards, and, suddenly, when we are at this unusual point in the pattern, when the Danish proportion of imports is very high in relation to home production, we crystallise the pattern at the present level of 36.5 per cent. for home producers and 63.5 per cent. of this trade for foreign producers. I should have liked to have known that our negotiators took cognisance of the fact when they reached this agreement with foreign importers recently that the position at the moment is unusual, that the demand for British or home-produced bacon and ham is improving in line with the producers' continually improved quality, and that in a few years there will have to be envisaged a possible return, once again, to a more familiar pattern of bacon and ham imports and home production than is the case at present.
In the Bill reference is made particularly to agricultural and horticultural workers elsewhere than in the United Kingdom, and I particularly welcome the few words included in Part I. I think that all of us have in mind producers in the Commonwealth, and particularly New Zealand dairy and mutton producers. We welcome their inclusion in any pattern to solve our own agricultural import problem.
We also welcome the inclusion of those nations, such as the E.F.T.A. nations and others, which are, perhaps, not engaged in any association with us other than being good trading companions who, in return for exporting to us many of the foods that we require, take from us many of the manufactured products that we export.
I suggest to my right hon. Friend that when he is face to face, as he will be fairly soon, with the difficulty, especially in election year, of meeting the demands of British farmers for a larger share in their own home market, and with the difficulty of wondering where the tonnage is to be obtained from, he should turn his attention to those nations which export a great deal of food to us and which do not import a great deal from us. Reference has been made to one or two nations in this debate and specifically to the Argentine, which I have particularly in mind.
663 During the past three years, our adverse trade balance with the Argentine has increased considerably. For instance, in 1961 we imported goods from the Argentine worth £24 million more than it imported from us. In 1962, the adverse balance increased to no less than £46 million and, what is really striking, during the first nine months of this year we imported from there goods worth no less than £53 million more than the Argentine imported from us.
I do not regard the Argentine as a particularly good trading customer on that basis. I understand that that country is having difficulty in meeting all its export obligations for meat. I understand that it exports to this country 200,000 to 220,000 tons of chilled beef annually. If it is having difficulty in meeting its export requirements, and we are having, or may be having difficulty in providing a market for our home-produced beef and meat, may I suggest to my right hon. Friend that there is a fairly obvious solution there which will be to the satisfaction of both parties. With these few reservations, I give a very warm and general welcome to the Bill.
§ 8.18 p.m.
§ Mr. F. H. Hayman (Falmouth and Camborne)
I apologise for not having been in the House for most of the debate but I have been occupied on Parliamentary business elsewhere in the building. My remarks will be few, and they will be local, because they will be concerned with my native county of Cornwall and, in some part, with the constituency of Falmouth and Camborne which I have the honour to represent.
One point in the speech of the hon. Member for Harborough (Mr. Farr) I noted with great interest. That was his plea to the Minister to make sure that something is done for the farmers in election year. I do not know whether this Bill was introduced with the General Election in mind, but the electorate will, no doubt, in due course, come to their own conclusions about that.
§ Mr. Farr
What I intended to say, and what I think Hansard will later show that I did say, was that it is always more difficult for any Government to forestall a demand from any organised body, whether the N.F.U. or 664 a trade union, when an election is imminent. I think that the hon. Gentleman will agree with that.
§ Mr. Hayman
I accept the hon. Gentleman's explanation of what he said.
The Joint Parliamentary Secretary, who is present with us, will be aware of the difficulties of both agriculture and horticulture in Cornwall because we are so far away from the London Covent Garden Market and the great markets of the Midlands to which so much of our produce is sent. The county branch of the National Farmers' Union has asked me and, I think, other Cornish Members to emphasise the peculiar circumstances of the Cornish horticulture industry. For almost 30 years now, our horticulturists have had to rely to a great extent on tariffs. True, the tariffs have not been high, but they have helped the Cornish growers. The Government are now offering a grant of one-third of approved expenditure, but growers will be called upon to provide two-thirds.
At the end of, I think, about four years, tariffs may go altogether, and horticultural growers may well find themselves involved in very heavy capital expenditure but with an uncertain future for their industry. No doubt, the Parliamentary Secretary will make the position clear to Cornish farmers and horticulturists if I am wrong in that suggestion.
Whatever be the circumstances, no industry in the country deserves more encouragement and support from the Government and from the nation than do agriculture and horticulture. I become alarmed sometimes by the tendency to rely on tinned foods, and I wonder whether we shall one day be deprived of fresh vegetables altogether. In my view, a vegetable which is not fresh is hardly worth eating.
I am perturbed also, as the Parliamentary Secretary will know from Questions I have put to his Ministry from time to time, about the number of small farms and small farmers. From the figures which I am given, I am unable to find out whether the number of small farmers is decreasing or not. It seems that there is no differentiation in the Ministry's records between holdings, and it may well be, therefore, that 665 a fairly large farmer is farming four or five or even more holdings, some of which were once quite small. I could give instances of this from my own locality.
Problems of transport have already been raised. Cornwall is not exempt from the designs of Dr. Beeching and the Minister of Transport, but I am happy to say that I got from the divisional manager of the Western Region of British Railways a fortnight ago an assurance that the main railway line west of Plymouth will be maintained. Nobody above divisional manager level has given me that assurance, but I am thankful to have got even that. It will be obvious to anyone who thinks about it for a moment that horticulturists in West Cornwall will be heavily handicapped if they are deprived of rail transport. What would happen in North Cornwall I do not quite know, but that is the Parliamentary Secretary's province, and, no doubt, he will do what he can to frustrate Dr. Beeching and the Minister of Transport in that part of our county.
The hon. Member for Harborough has already spoken about bacon and ham imports. There are two bacon factories in the town in which I live and which I represent. From time to time, in recent years, the affairs of both those factories have caused us a good deal of anxiety because they never seem to be able to know very far ahead what outlets there will be for their products. As in many other rural counties, the main products of Cornish agriculture in the past have been milk, eggs and pigs, and these are the staple products on which our farmers have relied. Whatever is done, those principal products must not be neglected in the future.
I fear that, if we come to rely on foreign countries for our food imports, sooner or later those countries will have a monopoly over us and will be able to wring the biggest price they can get out of our consumers. We spend enormous sums each year on defence, but what is the use of money spent on defence if we allow agriculture to fall by the wayside? We must have an efficient and prosperous agriculture not only for that reason but also for the well being and dignity of all the people who depend on the countryside 666 for their livelihood. There has been no finer sight since the war than the largely prosperous state of our country side which greets us almost everywhere. True, agriculture has had its slumps, and these have hit the individual farmer. It takes time for blows of that kind to show the full injury of their impact, but I hope that the Bill will go a long way to ensure prosperity in agriculture and in horticulture, not forgetting that horticulture has had a very chequered career in recent times. I very much hope that the pleas of Cornish horticulturists for a fair and square deal out of the Bill will be realised.
§ 8.27 p.m.
§ Mr. Denys Bullard (King's Lynn)
I do not expect hon. Members to be present to hear my contribution to the debate, but I think that any student of economic history, looking at the attendance in this Chamber in the latter stages of this debate, might be surprised to know that the House of Commons is debating a matter affecting the importation of the staple foodstuff of the community, namely, wheat, about which there have been so many wrangles here in the past.
I believe that this is an epoch-making Bill. I warmly welcome its provisions, or, at any rate, most of them. Being a farmer, the House may be surprised to hear me say this, but I do not know that I should have welcomed the measures for restricting he importation of wheat and other commodities if I had not received the assurance from the Minister that the minimum import price was to be low and that its purpose was to do no more than fortify the guarantee arrangements which we have at present.
I wish to speak chiefly about horticulture. I wish first to ask one or two questions about the implications for horticulture of Part I of the Bill. We know that the primary purpose of Part I is to allow a levy to be put on the attempted importation of cereals at below the minimum import price. However, power is taken in Part I to extend the minimum import price provisions to horticulture as well as to agriculture.
I should welcome very much some indication as to whether my right hon. Friend intends to use these provisions horticulture. If he proposes to use them for horticulture—and I think that the 667 minimum import price mechanism could, with advantage, be used for some horticultural products—will they be used in place of the present tariff arrangements or in place of the anti-dumping provisions which, on the whole, have not worked out well for horticulture? It would be of advantage, especially when minimum grades have been established, if it were possible to use the minimum import price mechanism for horticulture as well as for agriculture.
If the minimum import price machinery is to be used for horticulture, would my right hon. Friend be prepared to use it on the threat arising of produce being dumped? This is a very important consideration. It would certainly be no use if my right hon. Friend came to the House and asked for an Order to impose a minimum price mechanism when dumping was taking place. Preparations would have to be made for it long before that. If this procedure is to be of any use to horticulture, very early steps will have to be taken if the mechanism is to be effective in replacing or supplementing the existing antidumping procedures.
In a way, the minimum import price system has been taken from the mechanisms operated by the European Economic Community. They have their—[An Hon. Member: "Sluice gates".]—sluice gates, as the hon. Member reminds me, and these are allied to the mechanism there used. But one of the features of their system is that, when undue imports threaten the horticultural economy of a member country, not only can that country impose levies but it can bring about a complete prohibition of entry until the market in the importing country has recovered. This, too, would be a very useful provision for horticulture under Part I of the Bill.
I should like to proceed to Part II, which adds to the grants for the improvement of horticultural holdings and marketing systems. It is very important that this part should be looked at in the light of the Minister's statement the other week about the future of the tariffs. I have always regarded the tariff as a rather good method of protecting horticulture, but the aim of the tariff is not to perpetuate differences in costs between production in this country and 668 elsewhere. The aim is that under the tariff shield there will be an improvement in horticultural methods and in efficiency. My view is that under the tariff protection, substantial improvements have taken place in horticulture.
Therefore, I warmly welcome what my right hon. Friend the Minister said in opening the debate—that it was certainly not intended to cut away the tariffs wholesale but that each case would be considered on its merits and certainly, as to the sensitive commodities, nothing would be done for at least four years and even then, when a case could still be substantiated, the tariffs would persist.
I welcome particularly the provisions for grant aid for the improvement of wholesale markets. There are doubts in the horticulture industry about the place that the wholesale markets will fill in the future. There has grown up an increasing practice of direct sales from the horticultural growers to the main retailers of produce. This tendency has increased especially with the growth of supermarkets and the like and there is a real difference of opinion among horticulturists about the rôle of the wholesale markets. I believe that they will always have their place.
From my experience, having looked at some of the markets on the Continent, together with hon. Friends of mine and some hon. Members opposite, I certainly support the thesis that if we improve the physical conditions in the main wholesale markets, we will also aid marketing methods. This is, therefore, a desirable thing to do in the Bill.
I am rather doubtful whether it would be possible to have a complete plan specifying which markets should be improved before a start is made. The correct thing is to make a start on improvements in some of the markets. I hope that my right hon. Friend will not be unduly deterred by what will, undoubtedly, be a considerable amount of bargaining and argument between the proprietors of markets in different parts of the country as to which one is or is not to receive help. I hope that the approach will be made from the standpoint of the good of the industry and that we will get a move on in improving at least some of the markets.
§ Mr. Harold Davies
The House always appreciates the expert knowledge that the hon. Member possesses, but I should like to raise a question concerning the horticulturist in many cases selling direct to places such as supermarkets. Whilst, I suppose, both the hon. Member and many of us on this side support that method, I wonder whether the hon. Member is rather worried about this other aspect. When the horticulturist becomes completely under the control of a large supermarket for his produce, he may later find that his price can be forced down by the supermarket buyer. It was found in the pottery industry, for instance, that when one great supermarket took all the teapots produced by a pottery, it forced down the price. We in this House should be aware of that possibility.
§ Mr. Bullard
I am grateful to the hon. Member for his intervention. That possibility exists. On the other hand, those who have had the benefit of making contracts with the large retailing firms have, on the whole, found this to be a better arrangement for their business than to take the risk of the market, which is very considerable. I must, however, admit that the risk to which the hon. Member referred exists.
§ Mr. Hayman
What my hon. Friend said applies also very much in industry. Very often, small industries are set up to cater for some of the big supermarkets and they then find that the supermarkets reduce the prices to the consumer at the expense of the small manufacturer, who has to take a severe loss.
§ Mr. Bullard
I am afraid that happens also, but one has to admit the fact of the growth of trade through the supermarkets and other big stores. If these sales are to increase, as the producer wants them to do, then that part of the shopping public which uses those large stores must be able to buy horticultural products there.
There is one further point on Part II of the Bill with which I should now like to deal. The Bill, quite rightly, makes important provision for encouraging growers' co-operative organisations and marketing through growers' co operative societies. I should like to point out that there are real difficulties 670 about setting up societies in some of the horticulture areas. This applies in the Fen district and South Lincolnshire, which is a varied horticultural area, and a very large one. I believe probably similar factors apply in Bedfordshire around my right hon. Friend's own constituent, if not actually within it. There every variety of horticultural product is grown, from the most delicate hothouse flowers and plants ranging right through the bulb industry to glass house vegetables, small vegetables and cabbages, brussels sprouts and early potatoes. It is not always easy to set up growers' co-operatives in areas such as those, where the product is so varied.
There is a further factor which adds to those difficulties. The larger growers who have direct connections of the kind I have just mentioned or who have efficient marketing channels through which to place their produce do not readily join in with the small growers in the setting up of co-operatives. Therefore, there is a conflict within the area. Hence, when difficulties arise about the finding of the necessary money to start a society, I hope that my right hon. Friend, in the allocation of grants for this purpose, will have regard to these problems and will give every possible encouragement, both financially and also by giving help through his officers, if that is possible.
I do not believe that co-operatives are the be all and end all of marketing. I think that some of the existing channels are very efficient, and I would certainly net like it to be thought that growers ought to be lectured too much about the absolute need to set up co-operatives. I believe that there are other channels which can be equally efficient, and I hope these will not go without encouragement.
Before I leave Part II of the Bill, I should like to thank my right hon. Friend for what he told me about his intention to extend the actual grants available to holders of horticultural holdings by a new scheme, presumably under the Horticulture Act, 1960. On reading the Explanatory Memorandum and the relevant Clause in Part II, it was not quite clear to me how he proposes to extend these grants, which I think are most necessary. 671 A large number of producers will, I think inevitably, remain outside co-operative marketing schemes, and if their tariffs are to be removed in due course it is necessary that, as individuals, they should have the benefit of help under the Bill. As far as I can see, this will be provided by an extension of the scheme under the Horticulture Act, 1960.
I can give a fairly broad welcome to Part III, concerning the intention to introduce minimum compulsory grades, but I have one or two important reservations. These are the same as those expressed by my hon. Friend the Member for Harborough (Mr. Farr) and concern the failure of the Bill—my right hon. Friend will probably say that it is inevitable—to carry grading beyond the wholesale stage into the retail section. Growers will feel very strongly about this.
If they are compelled to grade their produce to certain minimum standards they may not like it at first, but I think that, when they get accommodated to it, they will not dislike it as much as initially. Nevertheless, they will be very dismayed to find that the grades imposed on them do not find any reflection in grades in the shops.
There will be a further considerable disadvantage. It is possible to sell direct to a retailer ungraded produce, and there will be a great tendency to by-pass those agencies which specialise in packing and grading and thus remove trade from them in order to push it directly into the shops where no grading standards apply. I welcome the provisions for the grubbing of derelict orchards, and I believe that, in great measure, this will remove bad produce from the market. But I still think that producers will have a great grievance about this.
I know the difficulties in carrying compulsory grading still further into retailing and the difficulty of administration. I appreciate that it is a major difficulty but, in fairness to the producers, it should be overcome. Certainly, imported produce should carry the same restriction, so that even at the retail stage it will be shown that it conforms to a broad standard of grading.
672 I appreciate the grave administrative difficulties involved in grading in the retail section. I know also that produce which is above grade one day may be below it the next and that there are all sorts of other snags running through the horticulture industry. Nevertheless, there is an anomaly here which will be hard to justify to our producers. I hope that some step will be taken towards removing it.
§ Mr. George Darling (Sheffield, Hillsborough)
During the Committee stage of the Horticulture Act, 1960, a very constructive proposal to deal with this was put forward by the Opposition but the hon. Gentleman voted against it.
§ Mr. Bullard
I do not recall that, but perhaps the hon. Gentleman, who is so often wrong, was right on that occasion. If I did vote against the Opposition proposal I was probably convinced by the great difficulties of administering and policing any such measure, and I admit those difficulties now. I merely say that I hope we shall go into the matter still further this time and see whether we can improve on the suggestion of the Opposition in 1960.
I warmly welcome the vast majority of the Bill's provisions. It takes our agricultural and horticultural policy a great step further, and I am very pleased to be able to give it pretty well my wholehearted support.
§ 8.55 p.m.
§ Mr. E. G. Willis (Edinburgh, East)
It is with some diffidence that I enter a debate on agriculture, but it is only right that at least one Scottish Member should take part in the debate.
The hon. Member for King's Lynn (Mr. Bullard) began by saying that this was an epoch-making Bill. It is so epoch-making that there are only six hon. Members on the back benches opposite.
§ Mr. Willis
It was not our side which said that it was an epoch-making Bill. We are treating it as we think it probably ought to be treated. It was the hon. Member who said that it was an epoch-making Bill.
§ Mr. Willis
There is not a Scottish Tory who thinks that it is sufficiently worth while even to grace the House with his presence.
§ Mr. Hayman
If my hon. Friend had been here half an hour ago, he would have seen only three back benchers opposite.
§ The Secretary of State for Scotland (Mr. Michael Noble)
Will the hon. Gentleman allow me to take advantage of his generosity and point out that only a short time ago no Scottish Socialist Members were in the Chamber?
§ Mr. Willis
We were rather busily engaged elsewhere, but at least two Scottish Socialists are now present and Scottish Socialists were present at the beginning of the debate, although I did not notice any Tory Scottish Members. I have spent the day commenting on the scarcity of Scottish Tory Members. I do not know where they are.
Putting this epoch-making Bill into effect will be a difficult operation, for it is to seek to control imports in a way which will assist the farmer and protect the Treasury. My hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) pointed out that the hon. Member for King's Lynn had changed his mind, that he had not voted for something at some time and was now taking a different view. But that is what the Government have done about exports. I remember numerous exchanges between the two Front Benches on the subject of controlling imports.
§ Mr. Bullard
There is nothing wrong about changing one's mind. I believe that the hon. Member was born in Norwich, but he now speaks for Edinburgh.
§ Mr. Willis
If the hon. Member paid me the courtesy of listening to all my speeches, he would find that I also speak for Norwich on occasions, while nevertheless still speaking for Edinburgh in the parliamentary sense. Of course, I have no objection to the hon. Member changing his mind, but he ought to have the grace to admit that he has accepted the very wise views expressed from these benches and to pay a tribute to this side 674 of the House for having put them forward.
§ Mr. George Lawson (Motherwell)
If the hon. Gentleman changes his mind, ought he not to change his side of the House?
§ Mr. Willis
It is rather difficult to know, because the Government are changing their mind so rapidly nowadays that one is lot sure where they will end. I was only pointing out the changed speeches which I have heard today—I have not heard them all—
§ Mr. Willis
The hon. Gentleman is wrong. I beard the opening speeches and I have been interested to observe the Government's changed attitude towards imports and their control. My hon. Friends will remember how the Tories condemned anything connected with the control of imports.
This is a very delicate operation, because it seems that the Government have to walk a tightrope in this connection. If they do not succeed in walking it, the result might be higher prices for the consumer. I have not heard much said today about the consumer, although a lot has been said about the producers. There are 50 million consumers in this country, and we ought to consider them. Perhaps the right hon. Gentleman will deal with this important point when winding up the debate.
We on this side of the House agree that it is necessary to give farmers certain gaurantees, but, if doing so means unnecessarily higher prices for the consumer, we shall have to thing very carefully about what we are doing.
I hope that the Minister will say something more about how he hopes to maintain the balance between what might be unnecessarily high prices, on the one hand, and, on the other, prices that are not high enough to give the farmer a guaranteed market, which is what he wants and lopes to get out of the Bill—an aim with which I am in 100 per cent. agreement.
I have a constituency interest in Part II of the Bill. As the Secretary of State knows, on the border of my constituency there is the eye of Scotland, 675 the most fertile part of Scotland, cultivated by a horticulturist whose name is a household word throughout the United Kingdom. This area lies on the boundaries of Musselburgh, which is the great leek-producing area of Scotland. Leeks represent one of the three Ls for which Musselburgh is famous. I shall not name the other two.
I agree with the additional assistance that is to be given to horticulture, but how much of this money will go to Scotland? According to the financial provisions of the Bill, about £24 million is to be spent under Clauses 2 to 5. I hope that the Minister will answer my question. We know what happened under the Horticulture Act. 1960.
I am interested, too, in the grants to be made towards the provision, rebuilding, or extension of major wholesale agricultural markets. We have the large Waverley Market in Edinburgh. For some time there has been talk about replacing it with a modern one which will cause much less congestion in the centre of the town. I presume that similar projects will be undertaken in other towns. Many of these markets are hopelessly out of date and cause tremendous traffic congestion. Anybody who has tried to get round Waverley Market and Waverley Bridge knows the enormous congestion that occurs in that area.
I am not certain how this grant will be made. If Waverley Market is rebuilt I assume that it will be done by the Edinburgh Corporation. According to the Explanatory and Financial Memorandum, the grant for such a purpose must not exceed one-third of the expenditure reasonably incurred. Surely that is rather a mean grant to give a local authority which wishes to replace an out-of-date horticultural market. The normal grant for local government expenditure is about 50 per cent., but in this case it is to be 33⅓ per cent.
Perhaps the right hon. Gentleman will give us some more information about this, and tell us whether what I have said about the grant is correct, and also whether, if Edinburgh Corporation rebuilds Waverley Market, it will receive a grant of only 33⅓ per cent. If so I can tell the right hon. Gentleman, who talks about this as an 676 epoch-making Bill, that Edinburgh Corporation—a Conservative body—will not see the Bill in the light. It will have some bitter things to say.
I agree, however, that we should try to improve standards and maintain them, not only in the wholesale but the retail sense, and with regard to horticultural produce from abroad.
I am glad to see that the Under-secretary has now resumed his seat. I read through the Bill carefully to see how much of his pamphlet, "The Land of Abundance", had found its way into it. I must tell him that I am disappointed to find very little of it in the Bill. I hope that he will plug away in the Scottish Office and that within a short time we shall begin to see some fruits of his efforts in another Bill, so that we can see this land of abundance, as produced by the Scottish Office under his guidance, as something more than a mere propaganda pamphlet.
§ 9.2 p.m.
§ Mr. Brian Harrison (Maldon)
I very much welcome the Bill and regard it as a logical stage in agricultural support in an era of abundance, in the same way as the 1947 Act—a very successful Act-seemed to be the logical stage in an era of shortage. There are, however, one or two points about the Bill in respect of which my right hon. Friend is likely to have some difficulty. If I may steal the phrase used by the hon. Member for Edinburgh, East (Mr. Willis), I think that my right hon. Friend will have to walk a tightrope. There is a lot of balancing to be done.
This is particularly so in the matter of negotiated quotas for imports. If we find that only limited quantities of our own products are encouraged as a quid pro quo for the introduction of quotas on imports from other countries, the agricultural community will eventually become very worried about the lid being held down on the kettle. Horticulturists may feel that whereas today they can switch from one product to another, if quotas are introduced there will be few products to which they can switch. This will present a great problem to my right hon. Friend, but with the skill that he has shown so far in negotiations I do not think that he will find it impossible to overcome.
677 That will be particularly so in the case of meat I wonder whether it is possible for my right hon. Friend to say how an agreement such as the Australia-New Zealand meat agreement will fit into the introduction of quotas. Will that seven-year agreement have to be re-negotiated?
I wish to make a plea. There is an overall plan to decide which markets are to receive this money so that they may be improved and modernised. From what is happening regarding the wholesaling and retailing pattern in horticulture goods today, unless there is much foresight and forward planning employed about markets we shall find that public funds will be wasted. In view of the lateness of the hour, I do not wish to say any more now, except to extend an enthusiastic welcome to the Bill both in respect of agriculture and horticulture. This is a Measure which has been adapted and adopted to meet the conditions of the present day. If properly administered, its provisions contain the possibility of giving a strong forward look to agriculture and horticulture in the next decade.
§ 9.6 p.m.
§ Mr. Douglas Jay (Battersea, North)
We, also, enthusiastically welcome the conversion of the Minister to co-operative marketing, compulsory grading, special help for municipal and co-operative enterprise and other forms of Socialism in respect of horticulture and agriculture. Coming on top of the conversion of the Minister of Housing and Local Government to the nationalisation of land it shows what a powerful effect the fear of death can have, even on the minds of Tory Ministers. Such a mass conversion has not occurred since St. Paul went on his famous travels. But we are not at all so sure about the far-reaching powers for which the Minister asks in Clause 1.
The right hon. Gentleman gave a most misleading impression of what is contained in that most important single Clause in the Bill. He implied that only cereals and meat—exceedingly important as they are—were concerned and that he was proposing only to do something about cereals. But the Minister is asking for much more sweeping and epoch-making powers which are not confined to agriculture policy 678 or foodstuffs, but branch right out into the sphere of international trade and taxation policy. Clause 1 gives the Minister of Agriculture—he alone in most cases, but to some extent also in association with the Treasury—the power to prescribe minimum prices for a very large slice of this country's imports, and to levy what are, in fact, import texts on them of any amount he pleases on most of the essential foodstuffs consumed by the people of this country. The Minister may protest—this was his line today—that he intends to use these powers only in the most reasonable and modest fashion. But this House also has its rights, and must look not just at the intentions of the Minister, but the powers contained in the Bill, particularly as in this case we are concerted with the power of the Government, in effect, to levy taxes on the subject. If I am wrong in this respect no doubt the Secretary of State will contradict me. But I think that the Bill would enable the Minister of Agriculture not merely to hold up but to raise the price of the great bulk of the nation's imported foodstuffs and, incidentally, feeding stuffs. That is to say, not far off half the total foodstuffs and some important raw materials as well. Any robust use of these powers—the hon. Member for Newbury (Sir A. Hurd) called for a robust use of them—could exercise far-reaching effects on our international trade, on the cost of living and on our power to export.
The Bill also enables the Minister, with remarkably little parliamentary safeguard, to place levies—or, in plain English, indirect taxes—by statutory Order on all imported foodstuffs and a number of other materials. The Minister admitted today that these levies are paid in the first instance by the importer. I think that he would not deny that they would be passed on to the consumer. I think that there would be common ground between us on that. These powers could be used without any Finance Bill Committee stage, or old-fashioned apparatus of that kind, to shift the burden of taxation quite materially—indeed, sweepingly—from direct taxes to indirect taxes on to the consumer.
Of course, the Minister can do both, raise the prices and levy the taxes as 679 well. The quantities involved are very large indeed. Total United Kingdom imports of food in 1962 amounted to about £1,450 million. Although some foodstuffs—I take it that this is true of tea and coffee—which are not produced in this country will not be eligible, some raw materials, like wool and hides would be. A rise in the price of food imports of only 10 per cent. would lead to a rise in the cost of living of £300 million a year because home produce prices would rise at the same time. A levy of 20 per cent. on average on imported foodstuffs would also add about £300 million in indirect taxes on the consumer.
The Minister may protest that he does not intend to do anything of this kind, but we do not know what he intends to do, and he is taking powers to do all the things I have described. Now, under this Bill, he could go much further than that. We do not wholly—at least I do not—trust the Minister of Agriculture in this matter, first, because the Tory Party has always hankered for generations past for a dear food policy and shifting the tax burden on to the consumer, and, secondly, because the Minister seems to forget that he is supposed to be Minister of Food as well as Minister of Agriculture and Fisheries.
I am a strong believer in a vigorous, prosperous and efficient agriculture. I agree with my hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) that, after the experience of two wars and the balance of payments crises we have had since the Second World War, any other policy would be extremely foolish. Incidentally, British agriculture now, partly as a result of the 1947 Act, is one of the most efficient in the world. I believe that in achieving this we should base ourselves mainly on the policies enshrined in the 1947 Agriculture Act, that is to say, guaranteed prices and subsidies, deficiency payments, if one likes, which benefit both the farming community which is still 4 per cent. or 5 per cent. of the population and the consumers, who are still 100 per cent. of it.
To depart from those principles and switch right over, on a robust scale—that is the word used today—to a policy 680 of food levies and restriction on supplies would be a disastrous mistake. The issue here is not whether agriculture should be sustained—I hope that everyone agrees with that—but whether it should be done by what I should call support, that is to say, guaranteed prices, subsidies and deficiency payments, or by what is better called protection, that is to say, the raising of import prices and the imposition of new taxes on the poorer consumers.
This is an issue of profound importance both for our internal policy and for the outside world. We on this side of the House say that a policy based mainly on subsidies and a fairly liberal import programme is far preferable to one based on food taxes and restrictions. I will give several reasons why this is so.
§ Mr. Jay
One cannot say, for one cannot give a fixed figure regardless of the year in question.
As I was saying, there are several reasons why this is so. First, any major changeover to a system of levies instead of deficiency payments is simply shifting the tax burden on to those less able to afford it. Of all taxes, the most regressive and unfair are those on food. They fall most heavily on the aged, large families and those living on small fixed incomes. Do not let us forget that when we talk of feedingstuffs the farmer is also a consumer.
Secondly, any policy pursued by forcing up food prices by levies or minimum prices at too high a level would raise the cost of living and could raise it gratuitously and unnecessarily. If Ministers contemplate any policy of that kind they should realise that certainly the wage earners and trade unions will not sit by and see the cost of living rise without taking steps to defend their standard of living. Such a policy would also mean a rise in money wages and would probably mean good-bye to any sort of incomes policy. That, in turn, would mean a rise in our export costs and a weakening of our power to export. It is seldom pointed out that deficiency 681 payments or food subsidies, are a most powerful form of export subsidy and are wholly consistent with G.A.T.T.
Thirdly, any policy which led to a rise in the price of imported food and raw materials must drive the terms of trade against this country. The Minister appeared to be aware of this danger in this speech. At least, he mentioned it. It is only the movement of the terms of trade in our favour that has enabled us to come near to achieving a balance in our overseas payments in the last seven years.
Since 1957, the terms of trade have moved nearly 20 per cent. in our favour, representing a bonus on our balance of payments of about £1,000 million a year. A rise of only 10 per cent. in food prices would add between £150 million and £200 million to our import bill and that would push us straight into deficit. Thus the House should not part with this subject without taking considerable note of it.
Nor should we assume too readily, as some hon. Members have been doing today, that world prices of food are now tending to fall. In 1963, they are not doing so and, apart from what the Government may intend to do by the Bill, the fact remains that world food prices are rising. I am sure that the Minister realises that the import prices of food coming to this country have risen by 12 per cent. since January, 1962, and the retail price of food in Britain has risen by 5 per cent. since then.
Nor should we assume, as some hon. Members have done today, that the world its still faced by these alleged unmanageable food surpluses and prospects of falling prices. Now that the Soviet Union, in addition to China and India, has come into the world cereals markets as a heavy buyer, it is possible that the picture could drastically change. At present, the world cereals surpluses are vanishing into Asia, but we do not know what will happen in the future. It seems possible, if not probable, that Russia will be a grain importer in normal years in the future and thus our difficulty might be to keep food prices down and not up. The whole spectacle of a British Minister, after the history of the last 15 years, trying to entice overseas producers to charge 682 more for what they sell to us is, from this point of view, extraordinary.
I hope that the Government and the Minister of Agriculture realise that terms of trade and balance of payments are the fundamental economic issues of this country, and that arrangements to vary the sin of deficiency payments or taxation necessary to pay for them are really a matter of internal transfer payments which may well be troublesome but which with courage and intelligence should be perfectly manageable. If we were to worsen basically our terms of trade in order to save an internal Budget bill, we would be guilty of extraordinary economic folly.
Fourthly, another danger in any robust use of these new instruments, about which we ought to hear something, is that it may provoke retaliation by some of our customers and possibly damage our exports, and particularly Commonwealth trade. We have the example here of the so-called "chicken war" between the Common Market and the United States, which was being provoked by precisely this type of food import levy erected round the Common Market. Would this weapon if used by us not be likely to provoke the same type of retaliation? Indeed, was it not agreed by all schools of thought during the Common Market controversy that a varying form of import levy was one of the most objectionable forms of protection?
The Government should realise that by their attitude in the Common Market negotiations last year they have already alienated many Commonwealth traders and lost us, for instance, aircraft and other contracts. We have to be careful that we do not push this process further by the unwise use of weapons of this kind. After all, it has been one of the great merits of British commercial policy up to now—I think the Minister would go with me this far—that we have followed a liberal import policy while the continent of Europe has followed a much more narrow protectionist policy ever since the eighteenth century.
I should have thought that our effort at this moment should be to try to persuade other countries to be as liberal as us, rather than that we should show any signs of reverting towards their 683 policies. Any unwise use of this excessive restrictive policy must damage the supplying countries as well as ourselves. Let us remember that the policy of deficiency payments or subsidies widens the world food market while a policy of import taxes and restrictions narrows it, and whatever else we do to help the poor countries we will not help to feed millions of underfed people by producing less food. We want to produce more. This is a point we should all do well to remember.
Fifthly, despite what the Minister said today, one wonders whether in all this the Government have been motivated not purely by the desire to improve this country's economic position, but the desire at some stage to join the Common Market on the sort of terms that we were discussing a year ago. The Minister got up today in a state of rather bovine indignation and flatly denied this. But if there is no truth in this why are the Government suddenly introducing this import levy policy at a moment when world food prices are rising? When the Minister of Agriculture denied this today, he did not seem to me to be aware that his colleague, the new Foreign Secretary, recently told Common Market Ministers privately at The Hague that this was the way in which Her Majesty's Government's policy was moving.
I must advise the right hon. Gentleman that at a meeting of the W.E.U. Assembly in Paris on 5th December, M. Rey, a member of the Commission of E.E.C., himself quoted our Foreign Secretary as having told representatives of the Six at The Hague that though the British Government had not yet abolished deficiency payments they were—and I quote my own translation:in the course of introducing progressively the Common Market system of minimum prices at the economic frontier of the United Kingdom.This comes very near to saying that we are moving over towards the agricultural policy of the Common Market. I do not know, and I do not accuse the Minister of Agriculture of deliberately concealing this important statement by the Foreign Secretary. He probably did not know. It is the normal state of muddle in which Government business is conducted.
684 But, quite apart from the general policy involved in the Bill, this Measure seems to me to be also open to the criticism as being much too sweeping in form and too casual in its attitude towards parliamentary control. First, it affects not only all agricultural and horticultural produce grown in the United Kingdom, including materials like hide and wool as well as food also, which nobody has pointed out—and I quote from Clause 1—it affects related products which are defined according to Clause 1(9) as meaningany product of a description which is obtained from that produce or from any related product, with or without any process of manufacture, or is obtained by the use of that produce, or by that of any related product as a material, component or ingredient…I hope that the Secretary of State for Scotland will tell me if I am wrong, because it is important to know what we are doing in the Bill, but this, presumably, would include woollen yarn, woollen cloth, made up woollen garments, leather, boots and shoes, or any other leather product.
But that is not the end of it. We are told by subsection (9,b) that included also isany substance or article of a like nature or use to the product or to the related product".Note the words "of like…use". Presumably, this would include any article of like use to woollen manufactures, that is, any textile materials whatever.
I should like to know whether that is what the Bill means, in the Minister's opinion. If he does mean that, why is it necessary to legislate so much more widely than was indicated by the intention he expressed today in his speech? So far as one can see, the Bill as it stands would give power to the Minister not merely to hold up the price but, incidentally, to impose levies on a wide range of industrial materials as well as foodstuffs, with very little control by the House. If it does not do that, will the Secretary of State tell us what is the meaning and purpose of the words in Clause 1(9) which I have read? If it does mean that, it seems to me to go indefensibly wide of any intention which the Minister expressed today.
This sort of loose drafting is all the more open to criticism when we observe that the definition of the commodities 685 concerned carries the right of the Minister to impose the levies. Therefore, a power of taxation is involved which seems to be entirely in the hands of the Minister of Agriculture. This taxation is to be imposed purely by Order, without any sort of Finance Bill, and, in a great many cases, as I understood the right hon. Gentleman today, not even an affirmative Resolution of the House is required.
As I understand the Bill, it is only to bring in a new commodity that an Order approved by affirmative Resolution is required. After that, the imposition of a tax on a commodity is merely the subject of an Order by way of negative Resolution, and, apparently, the decision thereafter to raise or lower the levy by any amount is not subject to any Parliamentary Resolution at all.
It is true that, for instance, the import duties chargeable under the Import Duties Act, and the anti-dumping duties, are imposed by the Board of Trade by means of Parliamentary Orders. But in all these cases it is not possible either to impose a new duty or to raise the duties without at least an affirmative Resolution of the House. It is very doubtful whether such powers as these should be placed in the hands of the Minister of Agriculture at all. I doubt whether such powers have ever been placed in the hands of any Department other than the Treasury and Customs and Excise or, in the case of import duties, the Board of Trade; and the Board of Trade, at least, is partly a consumer Department as well; and for its powers an affirmative Resolution is always necessary if taxation is being raised.
This is a point which the House will have to look at very narrowly in Committee, because it should not lightly surrender its control over these matters to any Government. Although the Minister himself may be blameless in his intentions, we do not know who the next Minister will be, or to whom we may be giving these powers. [Hon. Members: "Oh."] No, we do not know to whom we shall be giving these powers. I assure hon. Members that it is uncertain, and it is the duty of the House to scrutinise the powers which it grants without making any assumptions about who the Minister may be.
686 However, apart from these provisions in Part I, the Bill contains, in later parts, many improvements which we welcome. We shall not, of course, oppose the Bill, but we shall propose in Committee much greater safeguards by way of parliamentary control over the sweeping powers at present included in Part I. We shall try to bring the Bill rather more into conformity with the Minister's very modest speech today and the modest statement that he made to the House when introducing the policy. Until we have very much firmer assurances than we have yet had about how all this is to be operated, we shall be somewhat suspicious that the Government are still quietly trying to align their policies with those of the Common Market, and that, partly with that aim, they are seeking to impose a growing burden of food taxes, under the guise of import levies, on the British public.
§ 9.33 p.m.
§ The Secretary of State for Scotland (Mr. Michael Noble)
It must have been a rather unusual experience for my right hon. Friend to hear, throughout the debate, steady praise for his Bill from all quarters of the House. I am sure that this is what he deserves because, otherwise, the praise would not have come quite so regularly from all parts.
§ Mr. Noble
I realise that there are several points which hon. Members have raised on which they would like answers, and I shall do my best to deal with as many of them as I can in the time available.
The right hon. Member for Battersea, North (Mr. Jay) stated, as is absolutely true, that Clause 1 gives the Minister of Agriculture very wide powers indeed. The implication which he put on paragraphs (a) and (b) in Clause 1(9) was certainly, in my view, an accurate one, but I think that the whole Clause needs reading in the light of its first sentence, which refers toin the interest of maintaining in the United Kingdom a stable market for agricultural or horticultural produce…That is what the Bill is about. I am sure that points will be made about it in Committee and the discussion can range there on how wide or narrow these 687 powers should be. However, I say seriously to the House that, in many of these affairs, it is often useful to have powers available rather than to have to bring in separate Bills for any new commodity which may come under strain.
§ Mr. Willis
Would the Secretary of State say why these powers are not given jointly to the Minister of Agriculture and the Secretary of State for Scotland? After all, the Secretary of State for Scotland is Scotland's Minister of Agriculture.
§ Mr. Noble
That is a point which I am sure the hon. Member will want to raise in Committee, and it can be discussed there. [Hon. Members: "Answer it now."]I was proposing to give a quick answer now. The great bulk of the problems come under the Orders which must be laid before the House. Some are subject to affirmative Resolution and others to negative Resolution. But in many cases action will need to be taken extremely quickly, and it was thought best that the power should be concentrated in the hands of my right hon. Friend the Minister of Agriculture, with whom I am in very close touch.
§ Mr. Noble
Thehon. Gentleman asked whether I would like to explain my functions. If he has a week off, I am sure that somebody in my office will do his best for him.
Some point has been made about the sweeping nature of the powers and the possibility that new commodities could be put in. But under subsection (1) of Clause 1, if any new commodity—and my right hon. Friend has said that he is thinking only of cereals at the moment—was intended to be brought within the powers in Clause 1 it would have to come back to the House, and so would any alteration in minimum import levels.
§ Mr. Noble
I do not think the right hon. Gentleman is right about that. If 688 he is, the matter can be dealt with in Committee.
I agree with the right hon. Member for Battersea, North that it is extremely important to maintain in this country a reasonable level of food prices. The hon. Member for Workington (Mr. Peart) made it very clear that he realised that we had the cheapest food in Europe, largely due to the fact that we had been able to maintain a low food price by means of our guaranteed prices and deficiency payments, and so on.
The hon. Member for Workington also made it clear—I am a little doubtful whether the right hon. Member for Battersea, North took the point—that, in the light of conditions in the world today and the difference in the position of supplies of food, the system which worked well and not too expensively in previous years is now becoming extremely expensive. The hon. Member said very clearly that his party supported the policy of controlling imports and the policy of standard quantities. If that is so, I think that both sides of the House, with the possible exception of the Liberal Party, to which I will come in a moment, realise that the deficiency payments which worked well from 1947 until fairly recently perhaps need a complete overhaul.
§ Mr. Noble
I have a tremendous number of questions and points to answer. Perhaps I may carry on and if there is time at the end, the hon. Member can return to this point.
It is interesting that the Soviet Union and China should both now be coming into the world as buyers of cereals. This does not seem to me to give very great support to those who like fully Socialist systems with nationalisation of the land. [Interruption.] There may be other points in it, too, but I have a strong feeling that farmers are more efficient when farming their own land than when farming land belonging to the nation.
§ Mr. Noble
The hon. Member for Workington raised three points. He asked when the Verdon Smith Report was expected. My right hon. Friend said on Monday, I believe, that he hoped to get it by the end of this month and to publish it as soon thereafter as it could be printed. The hon. Member asked whether we had an idea of a regional plan for markets. I am not certain what concept the hon. Member has of a regional plan. At the moment, our belief is that the 20 or so major markets, if developed and improved, would be enough to start a satisfactory marketing scheme for the whole country. If, when this has taken place, more are needed, by all means let us consider the situation. The existing markets cover the market fairly well. The hon. Member asked whether we hoped to resurrect the Horticultural Marketing Council. We do not. On the other hand, we welcome the Joint Consultative Council which the industry has set up and which it is supporting.
My right hon. Friend the Member for Guildford (Sir R. Nugent) analysed very well many of the points that the right hon. Member for Battersea, North talked about, including the importance to us of terms of trade. He brought out a point which is significant in our discussions about surpluses and problems; that is, that often it is only 2 per cent. of the total amount of food which can break a market on the present system and that this 2 per cent. is not such as to have any serious effect on a rise or fall in food prices because it is a very small amount. Provided, as my right hon. Friend the Minister intends, that we keep the minimum import price at a low and sensible figure, I believe that we can keep our food prices reasonable, too.
My right hon. Friend the Member for Guildford asked whether I would make clear that at the end of four years' time, the tariffs on sensitive items would not be removal.
§ Mr. Noble
I was thinking of horticulture and the sensitive items, which I do not think apply outside horticulture, although they may do. Our hope is that, as we will be spending £150 million on the horticultural industry, particularly with the idea of building up the competitive efficiency of that industry, after four years' time some of the items in the sensitive list may be able to compete fairly with produce from anywhere else in the world. I think that this is a reasonable hope but, if they do not, there is certainly no intention of removing them in their entirety at one sweep.
My right hon. Friend suggested that the structure of agricultural marketing needed a permanent body to look after it and to make certain that it developed well. My right hon. Friend has great experience of this as Chairman of AMDEC, and if in 18 months or so it looks as though a permanent body of some sort is needed, we shall consider it.
Then the hon. Gentleman the Member for Leek (Mr. Harold Davies) spoke for his constituency, which I am glad to assure him is a non-sensitive item in the horticultural sense. He spoke with great courtesy to he Front Bench. He asked me what action the Government would take if growers decided to hold back supplies in the hope of getting a scarcity value from the shops. I do not think that this is a serious problem, because the vast majority of our horticultural produce is perishable and the holding back of supplies, except in a narrow field of commodities, is most unlikely.
I agree with him when he says that refrigerated foodstuffs are perhaps going out of favour, but I think that until we can be certain that vegetables and fruit are picked and delivered in a fresh condition a lot of the refrigerated food will find a market because it is so much easier to get good quality in that way. I think it is within the power of our horticultural industry, by making full use of market research and better methods of marketing, to defeat the refrigerating industry, if I may so refer to it briefly. However, I imagine that the firms which do a great deal of this refrigeration are a considerable help to the horticultural industry in taking up surpluses which might otherwise cause trouble on the market.
691 My hon. Friend the Member for Newbury (Sir A. Hurd) spoke very sensibly on the problem of standard quantities. He asked whether we could not in some way improve the phasing of our own supplies to the market as well as trying by agreement to phase supplies of imported cereals or meat. I think that our own farmers are doing a great deal, particularly in cereals, and of course it is much easier on the cereal side than on the meat side. He asked that we should be robust in doing these things and—without, I hope, causing any worry to the right hon. Gentleman the Member for Battersea, North—the Minister of Agriculture will certainly try to be robust.
Then the hon. and learned Gentleman the Member for Montgomery (Mr. Hooson), speaking from the Liberal benches, gave us a fairly good idea what the Liberal Party intend for us when they get into power. He asked me at first whether I would try to explain to him what my right hon. Friend the Prime Minister meant by saying that farmers would increase their incomes both by their own efficiency and by producing more. I know how difficult it is for Liberals to attend here very much, but it has been said often in this House that there are two methods by which the farming community can produce more. They can produce a larger share of foodstuffs because the population is increasing and also because, as the population increases and as the standard of living rises, there is inevitably a greater demand for food. Our farmers already have, and increasingly will have in the future, a full share of the increases from both those ways.
The hon. and learned Gentleman explained that he did not like standard quantities but believed that we should increase output by 4 per cent. every year. This would be extremely difficult because, in some commodities—with liquid milk, pork, barley and eggs among them—we are already producing the maximum and we cannot guarantee that demand for them will increase every year by 4 per cent.
It is, therefore, a little difficult to think of that idea as a sensible policy for the long term, but when it comes to the problem of the managed market then we are in some trouble because, although he did not explain it, I felt 692 that what he hankered after was a Common Market managed market, letting the consumer pay the full price for the food.
§ Mr. Noble
Not at all. We were certainly prepared, in the context of getting considerable advantages—as we hoped and believed that we would—from the Common Market, to accept this as one of the disadvantages, but the hon. and learned Member for Montgomery is prepared to do it without any counterbalancing advantages. That is the significant difference between us.
§ Mr. Hooson
Do I understand, then, that it is not contemplated that the home producers' share of the market will be in any way increased, except by an increase in population and an increase, as it were, in taste? Will it not increase by demand?
§ Mr. Noble
It will increase in taste, demand and through a general rise in the standard of living. There are a number of ways in which it can be increased.
The hon. and learned Gentleman explained to the House the problem of the Russian barley, but that was the wrong illustration since the Russians did not sell us their barley on those terms.
The hon. and learned Gentleman and my hon. Friend the Member for King's Lynn (Mr. Bullard) wanted to have grading in retail shops. This is obviously an attractive idea, but with 150,000 retail shops I think the House will realise how difficult it would be in practice.
I am sorry that the hon. and learned Gentleman wants to grub up all our orchards of Cox's Orange Pippins and rely on Delicious apples from abroad. Many people feel that we had better stick to high quality rather than go for quantity. My hon. Friend the Member for Bedfordshire, South (Mr. Cole) asked whether it would not be possible to divide the cereals brought in for feeding from those brought in for other purposes. This also would be administratively difficult to do because, at least in many grades, it would be possible to use cereals either for feedingstuffs or food.
§ Mr. Noble
I accept that. I regret that I missed my hon. Friend's speech. He asked also whether there would be an income from the levy. That is difficult to answer. We hope, if we can arrange these things as we plan to do—by agreement—that there will be no levy.
The hon. Member for Norfolk, South-West (Mr. Hilton) also welcomed the Bill. I rather agree with him that the quality of our horticultural produce is very good but that the presentation of it has been poor. As he is not here, I will not follow him along the path to his tied house, except to say that I disagree with him from an entirely different horticultural standpoint in Scotland.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop)asked whether Clause 6 put more money into, or broadened, the existing scheme. As I understand the position, the 1960 legislation contains very wide powers, and the fact that we are putting in this extra money makes it easier to use those powers more freely and to use some which have not been used before. He asked whether we could use some of these powers to replace obsolete glass houses—and I am bound to admit that I misheard him and thought that he said—for the tomato throwing industry. They certainly come within the powers available.
My hon. and gallant Friend the Member for Down, South (Captain Orr) spoke about the problems of Northern Ireland. Speaking as a mere Scotsman, I have always felt that the farming community in Northern Ireland, although small, was quite incredibly efficient for its size. I am certain that it will maintain this efficiency and, whatever else happens, that the relative prices of feeding stuffs in Northern Ireland and this country will not in any way be worsened.
My hon. Friend the Member for Harborough (Mr. Farr) asked why retail sales were excluded from compulsory grading. I think that I have already answered that. He asked whether the consultations with the Treasury mentioned in Clause 1(4) would take a great deal 694 of time and perhaps be too slow to work efficiently. My right hon. Friend is quite convinced that they will be very rapid. I agree with my hon. Friend that farmers must be given room to expand, and we believe that this is happening.
The hon. Member for East Ham, South (Mr. Oram) said that the Ministry of Agriculture leaned too heavily towards farmers and showed no sense of balance towards consumer interests. That is not a sustainable proposition, because, as has been said en both sides of the House, we have probably the best food in Europe at very low prices.
My hon. Friend the Member for King's Lynn asked whether we intended to use the minimum price arrangement for horticultural goods. At the moment, my right hon. Friend intends to use it only for cereals. I know only too well the difficulty of starting co-operatives in areas with very varied production. I have been interested in co-operative farming enterprises most of my life. I am certain that my right hon. Friend's officers will help in any way they can. I agree with my hon. Friends remarks about the difficulty of grading in retail shops.
The hon. Member for Edinburgh, East (Mr. Willis)—I was about to call him my hon. Friend; I see him so often—spoke, rather unusually, on horticulture. It took me about five seconds to remember the eye of Scotland, probably the best horticultural corner of the United Kingdom. I cannot tell the hon. Member how much of the grants will go to Scotland. We have a comparatively small, though very efficient, horticultural industry, and it remains to be seen how much it will need. The point about the Waverley Market is that one-third of the grant for that is sufficient for something which has grown to be a commercial enterprise and which it to be paid for by the people in the market and not put on the rates.
I welcome the remarks of my hon. Friend the Member for Maldon (Mr. B. Harrison) and regret that time does not allow me to say more about them. The Bill is to be welcomed and I am confident that the House will want to give it a Second Reading.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).