§ 11.5 p.m.
§ The Minister of Agriculture, Fisheries and Food (Mr. James Prior)
I start by apologising to the House. I have a bad cold and so I do not intend to speak for too long. I hope that the House will forgive me if I sound a bit stuffy.
There is one notable absentee from the debate today, and that is my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), who. I gather, is not too well and is in hospital. I hope that we shall soon see him back here playing his full part in our agricultural and horticultural discussions, in which he has been so actively engaged over the past 25 years.
In the Queen's Speech the Government, referring to the situation of British fishermen in Iceland, say:My Government are determined to protect the right of British fishermen to fish on the 492 high seas off Iceland. They remain ready to reach an amicable interim agreement with the Government of Iceland.I refer to that part of the Queen's Speech straight away as the House will be aware that it has now been agreed, following the exchange of messages between my right hon. Friend the Prime Minister and the Prime Minister of Iceland, that talks should continue at ministerial level. The time and place for the meeting has still to be decided. I think the House will share the Government's hope that it will now be possible to reach a satisfactory agreement on interim arrangements pending the final settlement of this unfortunate dispute.
It has been a great help to me in the negotiations so far to have not only the support and the understanding of the fishing industry, but the support of the House. The attitude which the House has taken has had a marked bearing on the Icelandic position. I hope we shall be able to reach an agreement at the next round of talks. It is unthinkable that two countries with the friendships and traditions which Iceland and Britain have should not be able to settle the dispute in a proper and amicable way.
Those events probably lead to an understanding of some of the problems which we are having about food prices. In so many respects we are unable to control what happens outside our boundaries and, therefore, the price which we have to pay for our food. It could well be argued that if anything happened off Iceland to prevent our fishermen catching fish, it would have a marked effect on the supplies and the price of fish. Anything that disrupts or changes the supply can and is bound to have a marked effect on prices.
There are two main causes of price increases, particularly in the food sector, but the same considerations apply right across the board. The first cause is wage inflation. I do not mean only the increase in wages, whether to the people who manufacture, the people in the retail trade or the people who work on the land or in the fishing industry. Wage increases have an important bearing, but prices can be affected in a myriad of other less direct ways such as haulage costs, fuel costs, rates, packaging and tin plate. All these instances of wage increases, are bound to lead to price 493 increases for commodities for the food industry.
Average earnings have increased by over 25 per cent. in the last two years. Therefore, it is not surprising that prices have risen significantly. If we are to get the 5 per cent. growth rate which we need to see in our economy, it is enormously important that we should have a reasonable level of profits so that reinvestment can continue, not only to enable us to produce more goods at a cheaper price at home but also to enable us to invest in the European food industry, which has an important part to play. I believe that despite some of the criticisms levelled at the food industry over the past two, three or four years, going back over the lifetime of both Governments, the industry in this country does a pretty good job. Anyone who goes around the world will find it very hard to discover a food manufacturing industry that comes anywhere near the efficiency of our own. It is interesting to note the impact it is already having in Western Europe as a result of the decision to join the Community.
The other main cause of increasing prices is increasing world market prices. The prices of beef, cereals and coffee are all rising very fast, and if we want those commodities, as we do, we must pay for them. The hon. Member for Enfield, East (Mr. Mackie) was saying to me the other evening that the Government had been very lucky in regard to home agriculture because we had had very good weather. I agree with him, and I shall come to that later. But the converse is also true. We have been extraordinarily unlucky in the weather that the rest of the world has been having, and the result that that has had on prices, which is beyond our control. The complete loss of the Russian winter wheat crop affected the world cereals market, and the price is up by about £10 to £12 a ton on last year. The droughts in the southern hemisphere of two years ago had a marked effect on butter and cheese supplies. The problems that the New Zealanders have been having this summer with floods have cut down the number of lambs they will be sending us this coming year. Those are the sort of problems we must face. They are quite outside the control of the food trade and of the Government. 494 Two other factors are beginning to play an important part in deciding world food prices. The first is that the ability of some countries to buy food is now far greater than it was a few years ago. A good example of this is the ability of countries like Italy and Japan to buy large volumes of beef and other meat now, whereas a few years ago they hardly bought any. There is thus a growing power of countries that are becoming more wealthy to force up the price in the world as a whole.
§ Mr. Prior
The British people are buying just about the same amount of beef as they were, and they are buying more of other meats. But this is a reflection of the ability of the British to pay the high prices which other countries are prepared to pay.
Another reason for higher prices in the world is that producers are no longer prepared to ruin their own market by flooding it with surplus production. This has been brought home to us in the past few weeks by what has happened over coffee. The coffee producers have got together and quite openly and blatantly kept the price up by restricting the supplies on the market.
I should now like to deal with two criticisms made by the Opposition. The first, which they make time and time again, is that the system which we started when we came to office in June, 1970 of replacing deficiency payments by levies on imports has forced up the price of food. I should like to know from the right hon. Member for Workington (Mr. Peart) what prices he thinks are being forced up today by the Government as a result of their levy policy. If the right hon. Gentleman feels that that is happening, he should give us the facts. The truth is that there is no levy on cereals of any sort, no levy on beef and veal, no levy on poultry, a very small levy on two minor milk products—whey powder and skim milk, and a very small duty of under 1p a pound on lamb. Apart from that, we have set aside the quota controls on butter, the restraint arrangements on cheese, and the 5 per cent. duty on beef and veal, which we shall be taking off again in the next few days. They were all in operation when the Opposition 495 were in government. Therefore, I do not think that the argument that we have deliberately forced up food prices by the levy system can possibly be sustained.
I now come to the Common Market, which is the other source of criticism. No one has ever sought to deny that entry to the Community will result in some increase in food prices. This was recognised by no less a person than the right hon. Gentleman in his famous White Paper. The calculations on which that White Paper was based of increases in the price of food are precisely those which the present Government have worked on ever since. The point is that when we go into the Community there will not be a sudden bump-up of our prices overnight. We have taken care in the negotiations to arrange a five-year transitional period. The movement of our prices to the Community's prices will take place in six equal steps spread over the five years, the last step coming right at the end of the five years, its effect probably not being felt until the end of the sixth year.
The movement of world prices means that the gap which we have to bridge in going into the Community is now considerably less than it was three, four or five years ago. I have given figures to the House from time to time as to what that gap is. In June I said that the gap was 12 per cent., which meant that over the next five years there would be about a 2 per cent. increase in price each year as a result of joining the Community. It is always very difficult to bring figures exactly up to date. Undoubtedly, the effect of floating the £ has been to increase the size of the gap. On the other hand, the very high cereal prices ruling in the world and the high beef prices have tended to narrow it again. The position as we see it now is that there has been perhaps a very marginal increase in the size of the gap but that the overall figure of 2 per cent. a year for five years in six steps is still the best and most accurate figure that we can arrive at. If that is the case, when will the increases take place? They start at the beginning of the crop year—for example, butter in April, cereals in August, and sugar in July.
Another factor has been operating. The Community is very worried by in- 496 flation, and, therefore, there is great pressure within it to hold its prices. As hon. Members know, there have been talks in Luxembourg this week designed to help the Community to hold down its prices. It will be no surprise to the House to know that the British Government will be doing all they can to persuade the Community of the importance of holding down prices.
I come now to the question of the tripartite talks. The talks have broken down, and I believe this to be a matter of real regret on both sides of the House. They offered by far the best opportunity of curbing inflation that we are likely to have. I believe that it would be better for the House to wait till Monday, until after the Prime Minister's statement, before debating the matter. I say only this at the present stage. The food industry gave certain clear and important undertakings, and I am grateful to it for so doing. Manufacturers would have held their prices to the 4 per cent. level, and the leading food retailers had offered to contain their gross profit margins at a level no higher than last year. Given the low figure within which the food distributive industry already works—the Report of the National Board for Prices and Incomes clearly showed this—and the high degree of competition in the industry, I consider that this would have represented a positive restraint on food prices. They indicated also their willingness to establish a system of maximum prices, in consultation with the Government, and I think that this would have gone a very long way to reassure housewives, who are, of course, the main sufferers from what has been happening.
One speaks of housewives as the main sufferers, and one recognises the hardship that rising prices cause, but one knows at the same time that, perhaps of all sections of the community, pensioners suffer the most, and I think that it may help the House if I give the figures to show what has been happening on pensions.
Recognising the particular problems of pensioners, we agreed to uprate the pension annually instead of every two years, as was previously done. Thus, on 2nd October, pensions were increased by 75p to £6.75 for a single person and by £1.20 to £10.90 for a married couple. This represented an increase of about 12½ per cent. from the previous uprating in 497 September last year, and is far in excess of the rise in retail prices over the same period, which was 7 per cent.
Nor should hon. Members forget that the uprating given to pensions in September, 1971, itself represented an increase of 20 per cent. over the previous review. In other words, since the last uprating of pensions under the Labour Government in November, 1969, we have increased pensions by 35 per cent. As the rise in retail prices over this period has been 24.6 per cent., this represents a real improvement in the purchasing power of pensioners of over 10 per cent. It is one of the best improvements ever in real terms.
As well as pensioners, those in receipt of supplementary benefit have been helped, with the basic scale rates going up by the same cash amounts as for pensions. All in all, 11 million people are now nearly 5 per cent. better off in real buying power than they were last year. In my view, that is something in which the Government can take pride.
I turn now to the one aspect of policy which is entirely within the Government's control; that is, the level of agricultural production at home. Ever since June, 1970, my hon. Friend the Minister of State and I have been doing all we can to get agricultural production moving forward. We have had to work against the background of some pretty bleak years in the 1960s, bleak years in terms of prices, and bleak years in terms of weather, too. The seasons were very much against us in the late 1960s.
We came into office in June, 1970, at a time of extraordinary difficulty for agriculture. There were considerable signs, as the hon. Member for Enfield, East and others know, that the industry was not merely standing still but was declining. We had all the problems of soil structure caused by too many cereal crops in a row. We had a number of people marketing their heifers rather than keeping them on for breeding. The situation was pretty poor, as almost everyone recognises.
In the short space of 2½ years, there has been a transformation in the industry's fortunes. The United Kingdom provisional census results for June, 1972 are very encouraging. Compared with June, 1970, the acreages of our two main 498 cereals have increased substantially. The area under wheat is up by 300,000 acres, and the area under barley by about 140,000 acres. The production of all grains in 1972 is, for the first time, likely to be in excess of 15 million tons. In this connection, one should note also that the millers' offtake from the 1971 crop was greater than at any time since the Second World War, and a similar off-take is expected this year.
The results in the livestock sector are equally encouraging. The June census shows that the number of dairy cows and heifers has increased by about 80,000 since June, 1970, and the dairy herd has reached a record size. The number of beef cows and heifers has increased by over ¼ million, a really spectacular rise. The high number of beef heifers in calf indicates a further increase. The pig breeding herd is now on a course for expansion. The number of breeding ewes and shearlings has increased by over 400,000. These figures represent a major expansion over the two-year period, an expansion in the industry's productive capacity for the future.
This cheerful picture is further illuminated by the sample livestock inquiry carried out this September, the results of which will be published in full today. Perhaps I should explain that this is the first of a new series of inquiries regarding cattle, pigs and poultry derived from a stratified random sample of holdings, which will replace the more general agricultural censuses previously held in March or September. It will, I believe, mean a saving of about 340,000 forms which farmers have had to fill in in previous years.
The returns show a further expansion in the dairy herd—114,000 more than last September—and, perhaps more important, a substantial increase in the beef herd of 7.6 per cent., with the number of beef-type heifers up by an unprecedented 85 per cent. on a year ago. The pig herd is continuing to expand, with a 12 per cent. increase in the number of gilts in pig and 25 per cent. more gilts altogether than in the previous year. Those are encouraging figures.
I turn now to the question of home-fed beef supplies, a topical point for housewives, farmers and butchers alike. 499 Last June, when I made a statement on the EEC suspension of import duties on beef, I said that domestic supplies were then at a low level but should increase as more grass-fed cattle became available. Exactly this has happened. In June home-fed beef supplies were at their seasonal low of about 61,000 tons. In every month since supplies have been higher, and the latest figures show that for September home-fed supplies were 74,500 tons—an increase of about 20 per cent.—and for October and November the figure should be higher still.
That increase has certainly helped to reduce pressure on the prices of cattle. This again points to the fact that if we can increase the number of cattle we shall begin to see some stability in prices. At the start of June the average market price of fat cattle was about £15.44 a cwt. Prices now are about 60p per cwt. less. Problems will arise in the next few months with the taking off, first by 50 per cent. and then possibly completely, of the EEC tariff on imported beef.
But what is of major importance is the expansion taking place in our breeding herds. This is absolutely crucial, because the total supply of beef is limited by the availability of imported beef and stores. It is interesting to note that in the last year supplies of Irish store cattle have dropped by 20 per cent., which represents about 20,000 tons of beef. The Irish—and one cannot blame them for this—are selling their beef to Europe. They receive higher prices from Europe, so they will not send it here. This is one of our problems. People say to me "Why do you not stop our exports of beef?". If we did that, we should merely encourage the Irish to sell more to Europe, and I do not think that the overall result would be any different from the present position.
We have taken every possible action to expand beef production, and I have given the House the figures. I would mention one other slight problem. The fact that we are increasing our beef and dairy herds as rapidly as we are is having the effect temporarily of reducing the supplies of carcase beef on the market. The increase in the herd this year to which I have referred is equivalent to about 30,000 tons of carcase meat. Therefore, we shall have to do without that this year in order to get extra breed- 500 ing stock for the future. But we shall get this extra weight of beef coming forward from next year. Supplies this year are expected to be 50,000 tons more than last year, and there will be a continuing expansion, with much faster growth than that, in years to come. This is without doubt the best part of the picture for the housewife. It has been a very good period for agriculture, and it is good for the nation, too.
No one doubts that there are tremendous problems on the food front. Equally, no one should doubt that the voluntary arrangements which we hoped would emerge if the tripartite talks had been successful would have presented the best chance of getting on top of the problem of inflation. As it is, the talks failed. However, we are taking every possible step to increase our agricultural production. I am sure that those in the retail food trade will do all they can to hold their prices; and the same goes for the manufacturing food market.
I think that the Government can take credit for what they have done in agriculture to make up for the years of deficiency which they inherited.
§ 11.34 a.m.
§ Mr. Fred Peart (Workington)
I understand that the Minister is due to be at a Cabinet meeting at 12 o'clock. Therefore, we shall forgive him if he leaves the Chamber and hope that he will use his influence in the Cabinet to bring about a reversal of policies which have failed. The right hon. Gentleman's speech was very gentle, but it was also a pleasant alibi which will deceive nobody. I shall deal later with his attitude towards the question of food prices.
I am glad we can agree with the Government about the handling of the Icelandic dispute. As talks are to take place between the two countries, it would be wrong for any of us to indulge in controversy on this issue. I think there is broad agreement between the Government and the Opposition on it and we hope that there will be a satisfactory outcome of a dispute which could harm our relations with a very small country which has always had friendly relations with Britain. We trust that the talks will go well.
I am sorry that the hon. Member for Isle of Ely (Sir H. Legge-Bourke) is not 501 present. I hope that he will soon recover and will again play his part, as he always does when possible, in our debates on agriculture.
Inevitably there will be refernce today to the discussions which have taken place between the TUC, the employers and the Government. The Minister asked us to await the Prime Minister's statement to the House on Monday. That is perhaps sensible advice, but he made some comments about this matter. We have merely seen the Press reports. I note from The Guardian today that Mr. Victor Feather, General Secretary of the TUC, said that the TUC wasdismayed to find that the Government was inflexibly resistant to their suggestions that firm controls should be exercised on the prices of essential commodities".I should like carefully to study the communiqué and to hear the TUC's detailed views on this subject.
I hope that when the Prime Minister presents his report we shall hear that a White Paper will be published so that the House can be fully acquainted with the Government's case and that the employers' and trade unions' cases will also be presented.
The Government have some responsibility for failing to deal with the question of food prices. It is all very well for the Minister of Agriculture, Fisheries and Food, to make a very gentle speech, which was an alibi, but he is the Minister responsible. It is no good throwing the ball to the Opposition. I accepted responsibility when I was the Minister responsible for food matters for four years. I believe that our control of prices was better than that of the present Administration.
My right hon. Friend the Member for Huyton (Mr. Harold Wilson) gave some interesting figures in the House on Tuesday. He said that unfortunately the food price index was available only up to August. Apparently, a dispute is still continuing, which affects the publication of the Department of Employment Gazette. My right hon. Friend said:Even so, taking the official figures only to August—that is, 26 months of this Government —food prices rose by 21.7 per cent. That is a greater rise than in the last four years and a month of the Labour Government. Under 502 this Government the cost of food is rising at nearly double the Labour rate of increase".— [OFFICIAL REPORT, 31st October. 1972; Vol. 845, c. 19.]The Minister of Agriculture had advocated a high price policy and he proposes to put it into effect. Moreover, the Prime Minister said in that famous "at a stroke" speech during the General Election, reinforced by his speech at Leicester, that he would deal effectively with food prices. In fact there has been an acceleration in food prices. When I explained to audiences during the election campaign how prices were affected by world conditions, it was pooh-poohed by Tory hecklers and by the Prime Minister. Over and over again they said that the Labour Government were responsible. One of the most effective parts of the Prime Minister's campaign was his wooing of the housewives on this issue. He has broken his promise to the housewives.
That is why today we are facing difficulties in relation to wage increases. So it is no good the Minister as he so often does, blaming the trade unions for their part in demanding higher wages and thereby creating inflation. He has responsibility. Moreover, his Prime Minister made promises which were actually opposite to his own view and philosophy and contrary to the views expressed by the Minister when he was in opposition. He believes in high prices, and he must accept responsibility.
Of course I recognise that if we are to curb food prices there are difficulties. We are still a great food importing nation. The Minister quite rightly has analysed our rôle in relation to world food production and world food supply. We have always accepted this. We recognise this. I have never said that the levy system was now operating. I recognise that it will operate later if we finally enter the European Community. I have always argued that a levy system of that kind would impose burdens on the consumer. The Government's White Paper stated a figure of between 2 per cent. and 2½ per cent. ayear over a six-year period.
However, the Minister forgets even his own White Paper, because for the period of six years a figure of approximately 2½ per cent. each year in retail price increases is given. He must take his 503 own document. He must have had some say in its wording. It says:It will vary from commodity to commodity. Some such as butter, cheese and beef, are likely to rise by significantly more than average".That is in the Government's White Paper "The United Kingdom and the European Communities" at page 23, para. 88. There will be higher food price burdens. There will be other increases which we shall come to inevitably when we have to conform with directives which emanate from the Treaty of Rome. The Minister knows this. He knows it only too well. So it is no good making excuses. Why does he not say "I still believe in my high price approach. We are going to pay higher prices"?
The Government said in the White Paper that they would try to relieve the burden on the lower income groups by various methods but nothing specific has been said as yet. The simple fact is that we are going to pay higher prices if we enter the Community. I shall deploy this argument later.
Let me now turn to the Gracious Speech. The Government say that they will continue to ensure a strong agriculture Ministry and efficient production and marketing of food in this country.
I understand the euphoria in relation to increased production. What I cannot understand is that pessimism in relation to policies which have been pursued in this country throughout the post-war period. We have only to examine the Price Review awards and the resources put into the industry itself over a long period. The Labour Government had a far better record than the Conservative Administration. Indeed the reason why there was a measure of progress in the industry was due to the stability which was given it by the Labour Government, which initiated assured markets and guaranteed prices and were enshrined in the 1947 Act, later confirmed even by a Tory Administration in the 1957 Act, the farming community was given a measure of security which it never had in the 'twenties and the' thirties. The subsequent progress which was made by British agriculture was admired by other countries throughout the world, as was also the structure which we created. I had the honour in a small, humble way 504 to play my part. That structure has been admired and still is admired by many people, and I cannot understand why we should have a levy system instead of the guarantee system which we adopted in this country.
Whatever system we may have, what will matter in the end will be the resources that are put into the industry. I accept that we can have a levy system imposed by the Government or the Community to secure desired objectives. On the other hand there may be higher prices which in the end could cause a lessening of demand. This is happening.
Already we see from the Meat Trades Journal this week—I hope that the Minister reads it carefully—Less beef on the table.Beef is becoming a luxury. I once said that the Minister could become the Minister for margarine and mince. Many of our poorer people cannot afford to buy a joint of beef. For many people —I am not thinking only of old-age pensioners and people in the lower income group—beef has become a luxury. [Interruption.] The Minister's PPS must listen to this. She must listen very carefully. She ought to do her own shopping.
§ Mr. Peart
Beef is causing difficulties. The right hon. Gentleman should know it. Otherwise he must get his advice 505 from some very funny sources—perhaps the sources which enabled him to say that people should buy peaches or pigeons in the event of shortages. So I say to the Minister that he cannot escape responsibility. He always comes wth alibis to this House, but the time for alibis is over and he must recognise this. He must accept responsibility.
Inevitably, and already, I believe that the decision to enter Europe means a dramatic change in our food and agricultural policies and administration. But I am not going to argue now about the European Community.
§ Mr. Peart
That will be for debate later; but probably people will be saying one day that they regret entry into Europe. But it affects the situation. The talks which have gone on affect the situation, and the Minister himself has only just returned from Europe and has made comments on the working of the agricultural policy in Luxembourg.
There was an article written on 31st October by Richard Norton-Taylor in in The Guardian commenting on what happened at Luxembourg. He said:Britain it appears, leads Europe in genetic engineering for raising good quality beef, and a confident Mr. Prior had some harsh words for his Common Market colleagues today on their attempts to encourage beef production.Whether the right hon. Gentleman said that I do not know—probably he did not; but the article says:The common agricultural policy has led to a situation where fish and even eggs are replacing meat for the poorer man: beef and veal prices have rocketed over the past year—by as much as 50 per cent. during the summer—mainly because of shortage … Mr. Prior encouraged his colleagues to urge European farmers to get rid of their dairy herds and concentrate on beef producing herds.So the right hon. Gentleman has had harsh words, as I say, about Community policies even though he is a Euro-fanatic. I ask him to be realistic about this. As Minister he must be sensible, about matters in Europe. It is something which is the concern to us all. I believe that the inevitable change to a levy system will be for the worse.
I want to deal with the home front. Through a series of decisions and legisla- 506 tion the Minister has sought to change the post-war policies. We have his Agriculture (Miscellaneous Provisions) Bill and the European Communities Bill confirming our entry into Europe.
I understand the reasoning behind this. The right hon. Gentleman has said that the Acts of 1947 and 1957 which I have quoted must be changed completely, and that we must phase our actions and our legislative procedures to a levy system. We have had the debate, but there are still many problems that arise from this. It was only on an Amendment which we moved to the European Communities Bill that we forced out of the Government a statement on the intervention agency. As yet we have had no major debate on this issue, which is exeremely important for the industry.
I understand that the Ministry may be named differently—Agriculture, Fisheries, Food and Intervention, if I may use the Minister's words. There are still discussions to be held with the industry. Many people in Europe believe that the intervention agencies there are wrongly placed and that there should be fewer of them. Issues like this have been ignored, and, instead of producing a major White Paper, the Minister merely gave a detailed reply during a debate in Committee on Clause 6. That is not a satisfactory way of doing business in the House. What is happening will produce major problems for the industry, especially the agency which I have mentioned.
I then asked the Minister whether it was to be a completely separate Government Department, and he replied:A completely separate Government Department. I suppose that the Minister for Agriculture, Fisheries and Food will become the Minister for Agriculture, Fisheries, Food and Intervention."—[OFFICIAL REPORT, 22nd June. 1972; Vol. 839, c. 764.]That was not satisfactory. I regret, too, that there has been no proper consultation. I regret, above all, that the important traditional partnership with the agricultural industry is to end. I am sorry that the county committee system has to go, and I believe that what he will put in its place will in no way represent the partnership that the industry had with the farmers, the farm workers and the landowners—a structure of partnership that was admired all over the world. So I am sorry that we are embarking on a 507 system which is wrongly conceived. In the end a free market, even though it may be protected by a levy system, will never give security to the farmer and farm worker.
The Minister will soon be engaged in review procedures with the industry. According to Press reports, they are to be advanced—I have been reading my Farmers Guardian this morning. We know that our European friends will be holding not the same type of review procedures but a similar type with counterparts in Europe, parallel with our own discussions. Will European Ministers be informed of what is happening in our review negotiations? May I have a direct answer now before the Minister leaves?
§ Mr. Prior
We shall hold our own review negotiations earlier than usual. We hope to complete them about a month earlier, and at the end of that time the Community will be informed of the decisions we have reached. The right hon. Gentleman must realise that over the next few years we are governed by the fact that our prices have to rise in equal instalments up to the Community's levy.
§ Mr. Prior
I recognise it is important, and, subject to further consultation which I am perfectly prepared to have with the right hon. Gentleman and the House, it would be our view that we should announce the result of our own review to the House at the same time, so that there can be no question of leakages coming back from Brussels and the House will be informed at the proper time ahead of other people.
§ Mr. Peart
There may still be leaks, and that is what worries us. The European review is in no way like our own. From reading the Blue Book and the Treaty of Accession it is clear that in no way are the procedures in Europe, the discussions between Ministers and COPA, the organisations which will represent the 508 farmers, like the review procedure enshrined in our legislation. Farmers will not have the purposeful review and discussion which we have. We know that when we finally enter Europe the review will be a thing of the past.
The Minister has been euphoric about conditions in the industry. The farmers will go to the review faced with considerable and continuing rising costs. The President of the NFU, Mr. Henry Plumb, has predicted that, with the £50 million pay award to farm workers which will be taken into account in the current review, increased costs will be in excess of £100 million. Increased fertiliser prices and road haulage charges are estimated to be in the region of £20 million. It is estimated that a further £60 million can be added for the steep rise in livestock feeding stuffs this year. It will not be easy for the Government. Whilst there may be the high price incentives, in the end the farmers will face high costs.
When will the Government complete their decisions on the Barker Committee's Report on contract farming and the Green Paper? According to Press reports, the Minister gave an unfavourable impression at the Press Conference. When will the Government make a decision? May I have an answer now?
§ Mr. Prior
Of course the right hon. Gentleman can have an answer now. He can have an answer to anything. We have asked for people's views by the end of November. After that it will be up to the Government to decide as quickly as possible what they should do. Some things we can do without changing the legislation; other things will require changes in legislation. Some things can be done straightaway; others will take rather longer, but we certainly intend to do them.
§ Mr. Peart
I wanted to find out whether the Minister was in earnest about this or whether he was in a mood to delay, as he has been so often in relation to marketing. I have a measure of responsibility here. I brought into being the Home Grown Cereals Authority and the Meat and Livestock Commission. I was also concerned with setting up the inquiry which led to the new Egg Authority. I was also concerned with setting up the central administration. 509 which deals with co-operation, and on this I feel proud of what the Labour Government did. It will play an even more important part when we enter the Community, as co-operation is so important. The Green Paper shows no Government thinking; it is merely an analysis. I know it is a Green Paper, but, after all, the Government are responsible for it.
I hope that in any discussions about future marketing the Minister will bear in mind the Meat and Livestock Commission and the Home Grown Cereals Authority. They have been working for some time but changes may have to be made, and I hope that he will not regard them as sancrosanct. Even though I set them up, I believe their work to be important, and before the Minister makes any major decision I hope that he will review the bodies which still exist. I am trying to help the Minister; he needs a lot of help.
I come now to hill farming. What does the Minister intend to do about representations made to him by the National Farmers' Union? A fine statement has been published by the NFU in its new hill farming pamphlet. Here again the Minister has been reactionary. The Minister of State will have to answer for the Minister, and he knows the spiteful way in which he destroyed the Pennine Rural Development Board which the Labour Government created, despite the fact that the National Farmers' Union and the Country Landowners' Association approved it. The scheme would have enabled us not only to develop farming in the hill and upland areas but to co-ordinate farm activities with forestry and tourism.
The farming community has now presented its own proposals, and they deserve serious study. The Government must not again be spiteful and doctrinal in their attitude. It may well be that in the end they will have to bring in something like the rural development boards which were created by the Labour Government. I trust that we shall have some statement on this matter today.
The hill and upland areas are important since 7 to 8 per cent. of gross farm output comes from our hills. It is only right that we should know whether the Government will respond favourably to 510 what the producers have already submitted to them.
Another important matter with which I must deal is agricultural research. The Government have adopted the Rothschild Report, though it is to be regretted that there has been no debate on this matter in the House. That report relates not only to agriculture but to many other industries. There has been no proper discussion, and yet the Minister has already acted in terms of agriculture. There is to be a new joint consultative body which will consist of five boards covering animals, arable crops and forage, horticulture, food safety, nutrition and technology, and engineering and structures. The boards will directly advise the Agricultural Research Council and the Departments.
Is the Minister convinced that this is the right structure? I am not certain that it is. There will be a proliferation of smaller boards within the research sections of the industry. I have always been very keen on the development of agricultural research and advice to Ministers. I created my own independent advisory service, which, I am sorry to say, has since been scrapped. I am now afraid that with the adoption of the Rothschild Report recommendations we may spoil activities which gave good service to the industry, and in this respect I believe that we are following a wrong course. Perhaps the Minister will be able to give a full explanation of his decision to create the five boards.
I turn to the subject of agricultural wages. I am sorry that the Minister of Agriculture has now left the Chamber. A few days ago the Agricultural Wages Board of England and Wales made an announcement about the claim by the workers in the industry for a minimum wage of £25 for a 40 hour, five-day week worked Mondays to Fridays, a reduction in the age at which the minimum adult wage rate is paid from 20 to 18, and an improvement in the female rate to 90 per cent. of the male rate as a step towards the implementation of equal pay.
The workers' case was not accepted by the board. However, a motion was moved by the appointed members that the minimum rate for the adult male ordinary worker should be increased by £3.30 to £19.50 and that the standard hours should remain 42 hours per week. 511 This application for an increase of £3.30p was put forward, and what, according to the Daily Express, was the Minister's reaction? He has a measure of responsibility for the industry, he has appointed board members who are independent, and it is wrong for him to intervene. But what he said, as reported in the Daily Express, was this:Mr. James Prior, Minister of Agriculture, who is attending the Common Market anti-inflation talks, said last night: 'If the rise is £3.30 then it is against Government policy. It would be a great disappointment.… There is every reason for a bit of gloom around. Things could not be more gloomy than they were on Friday.'This was a shameful intervention by the Minister.
Even at the Tory Party conference one speaker as reported in the British Farmer and Stockbreeder—a Mr. Smith, an arable farmer from Northants, who employs three regular workers and three casuals—called for better pay rates for farm workers. Mr. Smith was politely scathing aboutthe low wages that we pay to our agricultural workers.At least somebody in the Tory Party has a conscience. Mr. Smith told the Tory audience:It's no good you clapping and saying that something should be done about it—we all earn a good living. You all have cheap food and you are prepared to see that the dockers have a considerable increase in their wage packets.The report continued:The conference clapped. But Mr. Prior, drawing cold water straight from the Heath-Barber tank, said in his speech: 'Mr. Smith, the best policy for agricultural workers is a policy of wage moderation because those workers who are at the bottom of the scale will get the largest percentage increases. That is the surest way to see the lower paid worker has a fair deal, and that is what we are out to achieve.I believe the farm workers deserve a wage increase. If the Government seek to tamper with this decision, we in Opposition will strongly resist any effort to prevent a recognition of the farm workers' position. I hope that the Government will not adopt the Prior formula, neither the sort of attitude he took when abroad nor the attitude he took when replying to a debate in the Tory Party conference.
There is still uncertainty about effects of Government policy on the consumer 512 and about the future of farm workers. The Government must accept responsibility for the present high prices. I should like to know whether the imposition of VAT will affect food. I believe that it will and that inevitably we shall have to conform with the European policy. I argue that the actions taken by the Government have led us to a position where our people will have to bear high price burdens.
I should like in conclusion to deal with the situation in Europe. We have now had the summit talks, and a reading of the communiqué of Ministers shows that it contains no reference to agriculture and the food burdens that the people of Europe have to bear. I have already said that the European Community will now have to face higher prices and that there will be serious difficulties for consumers. There will also be difficulties for farmers.
The organisation which represents farmers in the Community, COPA, as reported in the Farmer and Stockbreeder, recently said—and this will be of interest to every British farmer—There has been a decline in farmers' incomes in real terms since 1966, while even in the past year from July 1971 to 1972 wages have risen by 10 to 13 per cent.Therefore, for farmers in the Community there has been a decline in real farm incomes. The farming community must beware of the promised land of higher prices in the Community, for higher prices are, of course, linked with higher costs and there will be uncertainty for farmers as well as for consumers.
I am not now arguing about whether it is right or wrong that we should enter the Community. There are many of my hon. Friends who believe that it was right that we should enter but still criticise the common agricultural policy. I am thinking particularly of my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) who has always argued with passionate sincerity for our entry into Europe but who has always had reservations about the CAP. There will inevitably, whether we like it or not, be higher prices for the consumer. This is what entry into the Community will mean and it will weigh heavily on many sections of our people.
Mr. Sicco Mansholt who in many ways is one of the great architects of European 513 farm policy, said that he was disappointed with the summit talks. I should like to quote his statement as reported in the International Herald Tribune on 24th October. Mr. Mansholt said,The EEC is a monster with many heads. it is very difficult to explain clearly to people what it is intended to achieve.Those are the remarks of Mr. Mansholt, the Head of the Commission and the architect of CAP. He is the man who chides the Opposition with not being fair about the Common Market. That was what he said on Tuesday, 21st October. There is concern and worry among various Ministers other than Mr. Mansholt. Mr. Ertl, the West German Minister, has criticised the EEC in scathing terms, and I have also quoted the views of the right hon. Gentleman the Minister of Agriculture when he was abroad.
I am worried about our traditional food suppliers, Australia and New Zealand; also our sugar suppliers in the Caribbean and all the other countries which are in the Commonwealth Sugar Agreement. I am worried about the effect the European economic autocracy will have on world trade, not only from the point of view of the producer but for the consumer and for the under-developed parts of the world.
We had the Kennedy Round in the late 1960s within the framework of GATT. Now we are to have new talks in GATT in the autumn. Who will represent Britain at these talks? I am told that the Government are apathetic, lukewarm. Yet these talks are important. Why should there not be an examination of world trade policies through GATT? Why should there not be an examination even of the common agriculture policy in relation to world trade and agricultural products? It would be good for such a body or one such as that which was chaired by M. Rey in the Ministerial Council to examine this question objectively. I am afraid we are entering an organisation which could disrupt world trade as we know it and could have disastrous consequences for the underdeveloped parts of the world. A reversal of our traditional rôle in world trade could also have serious repercussions on our own people. 514 Many hon. Members will have read the interim report of the Food and Agriculture Organisation which says that we are still unable to feed all the people of the world and that 500 million are suffering from malnutrition. Yet we see surpluses beginning to grow in Europe in grain and dairy products. There are dangers here. We still have world poverty. We should debate this matter on some other occasion. The underdeveloped nations are able to increase their agricultural output by only 2 per cent. and cannot adequately feed more than two-thirds to three-quarters of their people. In the United States and Canada agricultural production increased by 8 per cent. It could be argued that the richer nations have become richer and the poorer nations have become poorer.
I cannot understand why we are adopting a system which will restrict world trade and harm the underdeveloped nations. In the end their poverty will affect us even though we may be part of the affluent Western world. I wish that we had more time to discuss these great issues which are affecting our agriculture industry.
I say to the Government and the Minister that they must not make excuses. They must accept responsibility for the policies they are pursuing and for their effects on the consumer. Do not make lame excuses, do not come to the House with alibis. We on this side were never allowed to do so. The present Government have done so and in the end their policies will harm the well-being of the British people.
§ 12.15 p.m.
§ Mr. Charles Morrison (Devizes)
I agree with what the right hon. Member for Workington (Mr. Peart) has said about the problems of world undernourishment. I was told recently that whereas the population of the world increased last year by 2 per cent., food production remained static. As time goes on we shall be worrying less about surpluses and rather more about the distribution of those surpluses. The right hon. Gentleman referred to Professor Mansholt and the reservations he had expressed about the recent summit meeting. Those reservations were nothing like so sharp as the reservations he has expressed as a good European Socialist about the 515 Socialist Party in this country and the stance it has adopted over Europe.
I agree with the right hon. Gentleman that VAT could have an effect on food prices, but I believe that the effect will be to depress prices rather than to give them any upward twist. At present SET has a direct effect on food prices whereas food will he zero-rated with VAT.
The right hon. Gentleman indulged in such depressing language that he might well be termed "Mr. Gloom" or "Mr. Live-in-the-past." When he last spoke on agriculture in this House he described himself as a conservative Socialist. After listening to his speech today it seems he may more correctly be called a conservative reactionary.
The right hon. Gentleman ended by asking why Ministers were making excuses. I was not aware that they were doing so, and they have no reason to do so because the Government's agricultural policy has produced what my right hon. Friend the Secretary of State referred to as a complete transformation in the agricultural scene. That is no exaggeration. Production has increased by 11 per cent. in the last two years compared with 5 per cent. in the preceding six years when the right hon. Gentleman was a Minister. Let us discount all the good weather and all the good luck of this Government, although, while nationwide there has been a very good harvest, in Wiltshire and some other southern counties the harvest has been poor as a result of disease. Discounting these advantages and all the bad luck and the bad weather during the time of the last Government, the production increase is still a remarkable achievement, demonstrating both the success of the Government's policy and the ability of farmers to grasp the new opportunities offered to them. The briefest look at the June returns shows that expansion is under way. I am convinced that the expansion which we have seen is only a beginning. The potential for increasing expansion remains and will be realised and, possibly of greatest importance, will reduce the debit side of Common Market entry.
It is particularly encouraging to note the expansion which is occurring in the sheep flock and the beef herd. It is also encouraging to hear my right hon. Friend 516 refer to the potential for increasing beef production in future, which, indeed, will be crucial.
There is no doubt that the healthier situation in agriculture is enabling farmers to farm better, to invest more, and, therefore, to benefit the housewife. I believe that the greater the proportion of home food requirements grown in this country, the greater the security of supply there will be for the consumer.
Against this background of expansion and better morale in the industry, it would be wrong to be unaware of some of the worries which could become problems or sources of friction in future.
First, there are costs which, quite rightly, the right hon. Gentleman and my right hon. Friend have emphasised. I thought the right hon. Gentleman was unjustified in what he said regarding my right hon. Friend's comments about the recent wage award, because, in expressing such unjustified righteous indignation, he must have been forgetting the intervention by his right hon. Friend the Member for Blackburn (Mrs. Castle), who in 1969 referred an Agricultural Wages Board award to the National Board for Prices and Incomes. I think that all farmers are pleased that, apart from the award, they are now in a position to pay better wages to their employees, even if the total cost to the industry will be quite considerable.
§ Mr. Peart
I do not accept that. The hon. Gentleman must realise that there is now no National Board for Prices and Incomes, so there is still uncertainty about the Government's intentions. I agree that many farmers pay their workers well above rates which have been mentioned. Therefore, I do not see why there should be such opposition from the Minister.
§ Mr. Morrison
It is not a question of opposition. I am making the point that the right hon. Member for Blackburn intervened in 1969. I believe that well under 10 per cent. of all agricultural employees are paid the basic wage and that, as the prosperity of the industry improves, that percentage will fall still further.
Apart from wages, increases in fertiliser prices, transport costs and feeding stuffs will add to costs. Feeding stuffs demonstrate how costs to the 517 farmer can be affected by factors completely outside the control of this country. For example, on the one hand, the Russian wheat crop this year is down by 20 per cent., so that Russia, instead of being a wheat seller, has become a major buyer in world markets and has, therefore, pushed up the world price. To a lesser extent, the same is true of China. On the other hand, the price of protein feed materials has risen dramatically. Who would have thought that the disappearance of the anchovy shoals off the coast of Peru, due to changing world currents, would be of any major importance? Yet it is, because those anchovy shoals are one of the main sources of the world's fishmeal protein supply. Granted, one of the alternatives, soya bean, has had a good harvest this year in the United States; but that harvest can do little more than make up last year's rundown in stocks. Therefore, a number of factors are causing a considerable growth in the costs of production to the farmer.
Together with a number of my hon. Friends I had the most enjoyable, interesting and instructive experience earlier this week of visiting the British Sugar Corporation's factory at Wissington. I was enormously impressed by the efficiency of the factory. It emphasised how incredibly efficient our home sugar industry is nowadays all the way from the producer through to the consumer. During the course of that day I met and talked to a number of sugar beet producers. One question which was raised concerned the Australian sugar crop. It seems that suger beet producers are worried about what will happen after 1974. A question I should like answered by my hon. Friend concerns the Sugar Agreement. Will Australian sugar be phased out gradually, or will it simply be cut off? I understand it is to be the latter, but I should like confirmation as this point has been raised. If my hon. Friend can confirm that point, it would provide greater security and incentive to home sugar beet growers.
Apart from those home issues, undoubtedly a number of matters will be coming before the House during the year concerned with the Common Market and marketing. We shall look forward with interest to hearing what my right hon. Friend proposes following the reactions he receives to the Green Paper on marketing. 518 There is no doubt that there has been considerable disappointment among farmers about the White Paper on compensation. I understand that compensation is still to be payable on the agricultural value of land. Many farmers would prefer replacement value as this would be more realistic in a time of rising land values. Indeed, there is a precedent in a private river authority Act. As an alternative, yesterday my hon. Friend the Member for Buckingham (Mr. Benyon) suggested that compensation should be on the basis of existing agricultural land value plus a supplement of, say, 10 per cent.
Another cause of disappointment in the White Paper is the strong feeling that compensation to tenants should be much better than in the past. I know that there will be discussion on these points, but I hope that they will be borne in mind when legislation comes forward.
I now propose to say something about land prices, since they are causing concern from the point of view of both the young man who wants to go into farming and the older farmer who is concerned with the effect of capital gains tax and estate duty in relation to the ability of his successor—probably his son—to continue farming the holding.
There are a number of reasons for the sharp increase in agricultural land prices. First, there is the better return from farming. Secondly, land has always been a hedge against inflation. Thirdly, there is the increasing scarcity value of agricultural land. I believe it was Mark Twain who advised that "one should invest in land because they had stopped making it" Undoubtedly, too, institutional buying in a big way for the first time is affecting prices. Furthermore, historically almost anyone who at any time has made a large amount of money—or even a small amount—has tended to wish to and ultimately done so—to invest in agricultural land. There are always a few people making large amounts of money, or even fairly small amounts, and they have helped to increase the market price of land.
In the face of those factors there is only a limited amount which any Government or anybody else can do to control the price of farm land, but I hope that the 519 Government will consider, first, the possibility of ending the 45 per cent. relief on estate duty in respect of deathbed purchase. The relief was not designed to cater for the deathbed purchase, and this is something to which the Government should direct their attention.
Secondly, I hope that the Government will consider extending the roll-over period to postpone the payment of capital gains tax from one year to two or three years where farm land is compulsorily purchased, and consider the possibility of abolishing the roll-over of capital gains tax where land is sold with planning permission. A farmer who has his land forcibly taken from him should be given a longer time to reinvest. If he is given a longer time, that will reduce the pressure on farms which are in the market at any one time.
On the other hand, I cannot see how the willing seller, in the light of a planning application, has any particularly strong argument in his favour in relation to the retention of the roll-over period, and I think that if capital gains tax were payable in respect of land sold with planning permission that would, in practice, marginally reduce the total amount of money available for reinvestment in farm land, which in turn would have a controlling, and marginally stabilising, effect on the price of land.
I have two points to make about the environment. Farmers are becoming increasingly aware not only that they are 'concerned with gaining a living from the land but that they are the trustees of the English countryside which is a growing attraction and of increasing interest to people from urban areas. In consequence, they are very worried about two current matters.
First, there is the question of straw burning. I have a feeling that this year not only was more straw burned than for many years past but also that much more straw was baled than previously. The simple reason for that is that we have had remarkably good harvesting weather and, therefore, much less straw has been left to rot down in the fields.
The NFU has an excellent straw burning code and the majority of farmers stand by it, but others do not. This is unfortunate, because it gets a bad name 520 for the majority, as I am sure my hon. Friend will agree. I hope that in future more farmers than ever will adhere to the NFU code. I hope, too, on the other hand, that the Ministry, by its new joint organisation, will encourage the Agricultural Research Council, as one of its major priorities, to consider new uses for straw as a useful by-product of corn production.
The second environmental worry is Dutch elm disease. In many areas this disease is completely out of control, and I therefore ask the Government to consider rescinding or varying the Elm Disease Order which gives power to local authorities to insist that farmers should cut and remove diseased trees at their own expense. This is extremely hard where a local authority applies the order to a small farmer, because he may have 100 or more elm trees on his farm to cut down and remove, and I am told that the cost can be up to about £15 a tree. A small farmer may find himself let in for a bill of about £1,500 and have no control whatsoever over the situation. The Government must give further consideration to what they can do to help farmers and everyone who lives in the country to cope with the elm disease problem.
I have raised a number of current topics. On the whole, I believe that the outlook for agriculture is bright, and. because the outlook for that industry is bright, so is the outlook for many other dependent industries bright. The result of the Government's agricultural policy over the past two years is a more assured future for the industry and much better prospects.
§ 12.37 p.m.
§ Mr. Ronald Brown (Shoreditch and Finsbury)
I hope that the hon. Member for Devizes (Mr. Charles Morrison) will forgive me if I do not follow on what he said. Shoreditch and Finsbury has no large agricultural areas. We suffer only for the lorries which bring the produce in from the country. These lorries park on the streets, and their concentration during the night results in my constituents seldom getting a good night's sleep, but the Department of the Environment seems powerless to do anything about it. The Secretary of State for the Environment talks a great deal but does nothing when it comes down to it. 521 The Minister's statement today was extraordinary. I cannot get the figures right. I do not know what the Government are doing with the figures. One can put questions to Ministers, receive answers and then, a few months later, hear those same Ministers give entirely different sets of figures in reply to what are supposed to be the original questions.
I heard the Minister say that there had been a 25 per cent. increase in wages. At the beginning of the year I was motivated to put a series of questions to the Minister concerned about wages, hours of work, and so on, because in January of this year the present Home Secretary complained bitterly that the main cause of trouble in the country was the six or seven years of virtual wages stagnation, culminating in a wages explosion.
From my experience in industry I found that difficult to understand, so I put questions to the Minister. The answers that I received showed clearly that there was no stagnation. Between 1950 and 1970 the average yearly increase was about £1.50. From October, 1968, to October, 1970, the increase was £5, or £2.50 a year. It is untrue that there was stagnation.
Then I asked about 1971, to see what the explosion was. I had to wait for the answer, but I was finally told that by October, 1971, average earnings were £30.93. Therefore, they had risen from £28 in 1970 to £30.93 in 1971. That increase does not represent an explosion. I do not understand the Minister's statement that there has been an increase of 25 per cent. in wages, because that is not what the figures show. I urge Ministers to try to get some realism in their answers. We try hard to understand their arguments.
I want now to deal with the prices side as it affects my constituency, where one of the great issues is rents since 85 per cent. of the properties there are council properties. My constituents, certainly where Tory-controlled authorities have an influence on rent, are paying £10 a week or more in rent. I do not represent an area where there are high income groups. The people there are in the lower quartile of the spectrum.
I find Ministers' statements that prices have not risen extraordinary. In that 522 same series of questions I asked about food prices, because we were told that under Labour prices were soaring through the roof and we, therefore, assumed that this assertion could be supported by facts. I asked a series of questions designed at establishing the facts relating to the periods October, 1964, to December, 1969; December, 1969, to May, 1970; May, 1970, to December, 1970; and December, 1970, to December, 1971, to show how prices under Labour rocketed through the roof but how under the Tories they have been held down firmly.
An extraordinary story emerges. The General Index of Retail Prices showed that the price increase for food between October, 1964, and December, 1969, and taking in the extra period from December, 1969, to May, 1970, was 29.2 per cent. The increase in all items was 28.4 per cent. At the same time weekly wage rates rose by 35.1 per cent. and hourly wages rates rose by 41.2 per cent. From December, 1970, to December, 1971, food prices rose by 13 per cent., all prices by 9 per cent., and weekly wage rates by 10 pet cent. Therefore, for the first time since 1964 food prices rose by more than wages.
What price now the slogan "The hole in your purse"? In 1970 the Tories mounted a massive campaign telling housewives that the Tories would stop the drain through the hole in their purses. The Tories purported to show that all prices had gone out of control, that Labour could not cope with them, and that the Tories could do so much better.
The answers to those questions that I tabled established that there was no wage explosion after June, 1970, that there was no stagnation under Labour, and that under the Tories food prices have rocketed far more than the increase in wages. The "hole in your purse" campaign was the most dishonest campaign ever launched, and I can only express the hope that the Tory Government will do something to put it right and will apologise. Perhaps they did not know and did not understand. If the Government do not make a statement, we must impugn their methods and believe that they must have known that they were telling lies.
Under the Tories we have the phenomenon of roaring inflation and 1 million 523 unemployed. It is necessary to work hard to achieve those two things at the same time. The Tories have worked at it even harder, because at the same time they have reduced the value of the pound in one's pocket.
Earlier this week I had an interesting experience. I have a daughter returning from Australia with her husband. Under the Tory Government she will return as an alien. Is not that marvellous? This great founder nation of the Commonwealth makes my daughter an alien because she is married to an Australian.
I went to pay an air fare for my daughter to return. I had booked the air trip in June. The company was kind and said to me "Keep your money in your pocket. Under this Government you should try it". I did not pay for the fare until this week. The fare which was to have cost me £600 in June will now cost me £660. This is not because there has been a great increase in the wages of the workers at London Airport or because we are improving the style of aircraft or their maintenance. It is simply because of a change in money values. Under the Tories it is necessary to spend £660 now to purchase what could have been purchased for £600 in June.
This disaster has happened to me personally. I dread to think what it will mean to others who are not so sure of what is happening. Therefore, we have under this Government not only roaring inflation and 1 million unemployed but also the value of the pound being disastrously reduced.
I could understand the Government to some extent if they were honest about it, but they keep up this ridiculous gag about the floating pound and about how well it is doing, when in fact they have devalued. Under the Labour Government I recall listening from the backbenches to the Tories' miserable comments about the Labour Government and selling Britain short. Many of us then suspected that the Tories were not merely sitting here selling Britain short but were actively selling Britain short in company with the "Gnomes of Zurich". We then believed that the Tories were dishonest and unpatriotic. It is deplorable to watch them go through precisely the same exercise of devaluation and then cheat their way 524 through. It is little wonder that people are alienated from this Government and all that they stand for. They have taken us from the highest balance of payments we had for years—that was in June, 1970—to the pawn shop in two years. That takes some doing.
I turn to consider the Government's antics since September. I am not afraid to talk about the breakdown of the Downing Street talks. I have been on record consistently as saying that the Government never intended to have an arrangement. It is not, and never has been, their policy.
I pray in aid statements made by Government Ministers when they were in Opposition. I served, in company with the present Home Secretary, on the Standing Committee which considered the Prices, and Incomes Bill. Night and day I listened to what he had to say about a prices and incomes policy. In May, 1968, he explained clearly what he rejected:… reject … the altogether excessive weight the Government have placed upon an incomes policy … we also reject … the use of statutory control, of legal compulsion. We reject legal compulsion on the grounds both of the practicability and principleThat was the important part. The present Home Secretary said that the Government rejected legal compulsion on principle. I was one of those who believed him then. I believed that he was a man of honour and that he meant what he said. If the Government reject statutory control on principle, we must have a firm statement about why they have changed their policy.
The right hon. Gentleman was not satisfied with that. He went further. On 21st May, 1968, he made his position clear regarding Government intervention. He said that one of the hallmarks of freedom is the right of people to determine their own earnings without State intervention or direction, whether they do so by collective bargaining or by individual negotiations. There was no mention then of £2 or a little bit more to make it £2.60. There was only complete rejection of the whole philosophy of a prices and incomes policy.
I am not arguing whether the right hon. Gentleman's own philosophy was right or wrong, but that was his statement. Then, just in case there might 525 have been any doubt about his view, the right hon. Gentleman said, when arguing about the need for a prices and incomes policy and the failure of the prices and incomes legislation which then existed:It arises because and only because of the failure of the Government's economic policy. Change the economic policy and we could scrap the BillI do not know what the Government will bring forward on Monday. All I know is that the meetings with the TUC and the CBI were a fraud from the beginning and that what happened last night was as inevitable as night follows day. The Government are looking for an election. They do not have to be secretive about it. They want to return to their four-year cycle as soon as they can. It has worked very well before. It got them 13 years in office. The only time it went wrong was 1963–64. We are now in the 1963 position. The Government wanted to go to the country in October this year. Now they cannot do so because of their immigration policy, which has pulled the joker out of the pack. Every month they go on now will mean that the country will get more and more in debt. They should now be doing their deflation part of the four-year cycle but they dare not do so. They cannot give away £2,000 million twice in one parliamentary lifetime. They are grasping at any straw in seeking a reason for going to the country. They thought that it would be valuable to make the TUC that particular stalking horse and to pretend to the public that they have their interests at heart and that the TUC has not.
When the talks were proceeding I said to my constituents in Shoreditch and Finsbury—I am on record as saying this week after week—that I could not forecast the day when the talks would break as that depended on when the Government thought they would maximise the break-up which they had engineered.
One of the problems facing the country is that the Government cannot be believed. They are basically politically dishonest. They know well that the advertisements about the Housing Finance Act, which they called the "fair rents law", are a nonsense. Many of my colleagues and I have challenged the Government on the issue of "fair rents". 526 I put down many Questions during the discussion of the Housing Finance Bill, asking the Secretary of State for the Environment to give the tenants of council property the same rights as apply under the Rent Act, 1965, which is the genuine "fair rent Act". The right hon. Gentleman declined to do so. He said that it was a different thing altogether. He said that it was nothing to do with the Rent Act, 1965. Having said that, he then produced publicity, for which the taxpayer is paying, which was pure party political propaganda. He had the effrontery to call his Act the "fair rents law", when he knew that the fair rent concept of the 1965 Act no longer applied and that no council tenant has any right to challenge the rent scrutiny board when it finally determines the economic rent. The right hon. Gentleman knows that. That has been put to him on many occasions. However, he deliberately portrayed in public advertisements the claim that the 1972 Act was a "fair rents law". He then went one stage further and implied in the advertisements that tenants could discuss their economic rent with the council. The right hon. Gentleman knows that they have no such locus for discussing their rent.
It is a problem to tell one's constituents that the Government are publicly telling lies in their propaganda. It is insufferable that any Government should behave in that way. The latest cards detailing the United Kingdom figures are another example. One reads them to try to get continuity of figures and to pick up the points which are necessary so that one can give the information which is required. They are also misleading. The cards are supposed to be not political but a statement of the facts which we can all use to argue and discuss our affairs better. Suddenly one finds that there has been a switch, about which no argument or explanation has been adduced. The last card went up to 1967 and the figures represented a price index based on 1962=100. When one looks at the new card which has been produced by the Government, one sees that the figures are based on 1963=100. Why did they suddenly change from 1962 to 1963? The 1962 figure was perfectly all right before; those figures were always used. The Government have done their homework well and they have decided that the 1963 figure gives them a better 527 picture. It is disgraceful that the figures should not be continued as they were previously being produced.
The present Secretary of State for the Home Department on 21st May, 1968, went further and produced seven reasons why a prices and incomes policy was a nonsense. First, he said that one had to get Government expenditure under control. He has had two years to do that. Secondly, he said that it was necessary to cut back the last three years' over-growth of the bureaucracy. He has not cut it back but increased it rapidly. Thirdly, he was going to give new and substantial incentives to saving by introducing a contractual savings scheme, a save as you earn scheme.
Fourthly, the right hon. Gentleman said that it was necessary to reduce direct taxation. He has done that for individuals and companies. Fifthly, he was going to sharpen competition by every available means, including the reduction of tariffs. Sixthly, he was going to reform the structure and method of government so that Government could set an example. Lastly, he was going to give Britain, for the first time, a comprehensive system of industrial relations law. He did all that too. He can honestly say that he achieved his seven-point plan. Where does he finish? He may finish with prices and incomes legislation, after saying that he had seven reasons for not doing so. One can now see exactly what the Tories are talking about. Finally, he suggested in the same debate:There is, therefore, a prima facie case for believing that one ought to look elsewhere for an incomes policy, that one ought to look elsewhere in the structure of our economy for the explanation and the cure of our economic malaise.—[OFFICIAL REPORT, 21st May, 1968; Vol. 765, c. 315–25.]What have they got? They are meeting this morning to discuss how they can introduce prices and incomes legislation so that the Prime Minister can tell us about it on Monday. I am anxious that the Prime Minister should re-read some of the views of his right hon. Friend, who was said to he the leading spokesman of industrial policy and economic policy of the Tory Party.
There is an important omission in the Gracious Speech. As we lose about 177 528 million days of production through sickness and injury in industry, I should have thought that there should have been something in the Gracious Speech recognising that factor and telling us what should be done about it. Previously we were told "Wait for the Robens Report. When it comes we shall act quickly." But it was published before the Gracious Speech was prepared. The report particularly asks for urgent action, because 177 million man-days lost are too many. When we add to that 240 million man-days lost through unemployment, we are talking about 417 million man-days a year lost through people not being gainfully employed for a variety of reasons. That is what the Home Secretary had in mind when he talked about other activities to help solve our economic malaise. But in the Gracious Speech there are no proposals.
I have been very concerned over the years about the hazards of expanded foam in furniture. I now have the doubtful satisfaction that in the report of the Chief Inspector of Factories the arguments I have been putting occupy the first two pages for the first time. He says that the issue is important, and that some people are becoming very worried. Yesterday I had on the Order Paper more Questions to Ministers on the subject. It is fascinating to see the Questions being shuffled from one to the other. I hoped for quick answers so that by 5th November the public should know that if furniture containing expanded foam is put on bonfires there is a danger not only of burning but of asphyxiation by toxic fumes. Instead of the urgent answers that I sought and the statement on television that I asked for, all I received from the Department of the Environment was notes telling me that the Questions had been shuffled from one Minister to another in the hope that someone else would answer. The Chief Inspector of Factories made it abundantly clear that he regarded it as a fundamental problem of maximum importance. His report was published well before the Gracious Speech, which could have contained something indicating that the Government were seized of its importance.
The Government are guilty of sheer neglect for two years, of having misled the country deliberately, and of being the worst possible Government. I hope that 529 this morning's Cabinet meeting will authorise the Prime Minister to say on Monday "Enough is enough. We have made a hell of a mess, and we are going to the country"
§ 1.3 p.m.
§ Mr. Christopher Brocklebank-Fowler (King's Lynn)
The hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown) will forgive me if I at once disagree with the major part of his speech and express the intention of not following his line of argument, not least because, unlike him, I represent a constituency with a large dependence on agriculture, varying in size from large estates to small individual horticulturists and many agricultural workers. They will be delighted, as the House should be, that the Gracious Speech shows the Government's intention to encourage a strong agriculture and the efficient production and marketing of food.
To change an average growth of production over the six years of Labour Government of about 1 per cent. a year to an average rate of 5 per cent. a year over the two years since June, 1970, is no mean achievement. It shows the effectiveness of the Government's policy of expansion for agriculture. I imagine that Labour hon. Members will welcome, as my party does, this very great achievement, the increased acreage of corn announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food this morning and the increased size of the herd and the stocks of pigs and sheep. If the Labour Party does not welcome the announcement, not only the House but agricultural workers will want to know why.
The right hon. Member for Workington (Mr. Peart) spoke this morning of being in favour of high prices and not being in favour of high prices, of wanting higher wages and not wanting higher wages. He weaves a web of illusion which the House does not begin to understand. But agricultural workers understand one thing above all else, that for them an increased standard of living, security and an increase in real buying power, depend entirely on a massive and sustained expansion of agriculture. They know perfectly well that if an agricultural wages board were to grant increases which were 530 more than the industry could bear on very fine profit margins, there would be fear of redundancy. Already there are signs that the recent award to the building industry has resulted in some parts of the country in redundancy among estate workers, those concerned not with agriculture but with maintenance work, an essential part of the running of large estates.
Even though we have seen two years of substantial expansion and an increase in farm gate prices, margins are still relatively tight on the land. Looking forward, as the industry does, to some years of increased investment to make possible the continued expansion that we all want, farmers generally must husband their resources with great care. Moderate wage increases on a regular basis will become possible only if the industry continues to be profitable and to work on increased margins, and it will not in that event contribute over-much to inflation provided the expansion is continuous.
I am in favour of improving agricultural wages, and I am in favour of the recent award. The agricultural worker has suffered for too long by being a long way behind his counterpart in industry. The gap has been too large for a very long time. This is a view that the right hon. Member for Workington put with great passion this morning. I look back to his early years as a Minister. In the Farmer and Stockbreeder of 5th October, 1964, he was reported to have said that the Labour Party's objective was to ensure that the incomes of farmers and farm workers moved rapidly towards their industrial equivalents. In fact, farm incomes hardly moved during the Labour Government's period in office. There was stagnation, and I believe that in 1970 farm incomes were lower in real terms than they had been in 1955.
During the 13 years of Conservative Government from 1951 to 1964, agricultural earnings expressed as a percentage of manual workers' earnings were about 73.71 per cent.—that is, the average agricultural take-home earnings were substantially lower than those in industry as a whole. What is more, throughout that period the agricultural worker put in an average of 2.6 hours a week more than his opposite number in industry generally. 531 Let us look for a moment at what happened during the six years of the Labour Government, following the right hon. Gentleman's expressed intention in 1964 to close the gap. Agricultural workers' earnings expressed as a percentage of all manual workers' earnings fell from 73.71 per cent. to 71.72 per cent. In the Labour Government's final year, 1969–70, the percentage fell again, to 68.40 per cent. The position was still worsening, therefore, when the Labour Government left office. So much for the right hon. Gentleman's expression of intention. The results fell a long way short, and, in fact, the relative position of the agricultural worker became worse.
Since that time, as a result of the increasing profitability, buoyancy and confidence of agriculture, wage awards have been made by the agricultural wages board—one last year, and now one this year to take effect from 22nd January next—which show that agricultural wages in relation to wages in industry generally are once again improving. In 1971, agricultural earnings had increased from 68.40 per cent. of average earnings to 69.90 per cent., indicating that once again the climb back to some sort of parity had begun.
Right hon. and hon. Members opposite very often claim to represent the agricultural worker above all other sections of the community, except, one notes, in debates when we are discussing food prices and farm gate prices, when they are all in favour of low food prices and low farm gate prices. The lesson to be drawn from the present Government's policies and an examination of the achievement, to call it that, of the last Labour Government is that, despite all their fine words, their performance was very poor. The agricultural worker knows it. He knows better than any hon. Member on the Opposition side that his future depends on an expanding industry, and it is an expanding industry which Labour Governments have shown themselves unable to achieve but which the present Government have shown every sign of achieving and continuing to achieve.
§ 1.13 p.m.
§ Mr. George Wallace (Norwich, North)
I am glad to follow my East Anglian colleague the hon. Member for King's 532 Lynn (Mr. Brocklebank-Fowler), because we both represent a low wage area and, what is more, an area in which the family spends less than families do elsewhere on the general purchase of goods for the household.
I am sorry that I missed 10 or 15 minutes of the Minister's speech. I was late because I had to come here hot-foot from doing the week's shopping. I am, however, in a position to give more up-to-date information on prices than anyone else. I put down my shopping basket and rushed off to the House, and this is what I can now tell hon. Members about my experience of prices just that short time ago.
I hoped that I should have an opportunity to take part in the debate and I made a note of some of the prices I found. I looked for a weekend joint for two old-age pensioners—not for myself, because, although I qualify by age, I am at present working, or, at least, doing my best. I was looking for a reasonable joint of about 1 lb. or 1½ lb. for two people. I saw a nice joint, about 1½ lb., of best end of neck of lamb for 44p—not much change out of 50p, or what we used to know as 10s. A piece of topside of beef, about the same weight, was priced at 88p—not much change out of £l.
Those are items which count heavily in the low incomes of old-age pensioners. A further significant fact which I found this morning was that all the breast of lamb had been sold already when I went round. It is always a sign that people are hard up when they buy breast of lamb on a large scale like that. This week, incidentally, our own favourite cut of bacon has gone up 2p; last week it was 44p per lb., and this week it is 46p.
These increases are taking place week after week. If there does not happen to be an increase in one item of food, there will be an increase in one or other service which the home must have—gas, electricity or whatever it may be. The result is that the general increase in the cost of living outstrips the pension increase, even the one recently given. Naturally one welcomes any increase in old-age pensions, but that fact stands out.
Another piece of information which has shaken me to the core is the report 533 in The Guardian, which I read somewhat hurriedly this morning, that the Milk Marketing Board has obtained sanction to pour tens of thousands of gallons of skimmed milk into the English Channel next spring, apparently because there is a surplus of milk for processing at that time of year.
Good heavens—are we going insane? With so much poverty and undernourishment abroad, and under-nourishment at home too, with school milk cut, how is it possible that such a situation could be allowed to develop? I understand that the negotiations have been concluded and next spring, at a time of rising prices and worry about the cost of food in the home, we shall have the spectacle of tens of thousands of gallons—I think that it will, in fact, be millions, though I am not sure and do not want to exaggerate—of good food being poured into the English Channel. It may feed the fish, but I doubt that it will do much good there.
At the opening of the last Session the Gracious Speech mentioned somewhat vaguely a measure for consumer protection. In the event nothing was done. This year's Gracious Speech mentions the subject in even vaguer terms. Will it again be words, not deeds? If so, I warn the Prime Minister and his Government of the consequences. Hell hath no fury like a woman scorned, and the people most directly concerned with consumer protection are the housewives and the great mass of them are looking for some tangible sign of consumer protection.
On coming into office the Government were quick to scrap the Consumer Council to effect a paltry saving. They have been very slow to implement the Motion which I put to the House on 10th May, 1971, which was carried by the House without dissent. Since then, admittedly, the Government have made vague noises of support for some form of consumer protection, but there has been no decisive action. Their own back-benchers have been forced to form an action committee, and we have even heard rumours of some glamorous lady becoming Minister for consumer protection.
In the meantime, the prices of basic household requirements have continued to rise, while anti-social takeover bids and mergers have taken place, leading to factory closures and redundancies, 534 especially in East Anglia, where in any case wages are the lowest in the country and the household budget is reduced as a result.
The threat of wage increases to the national economy has been advanced time and again by the Prime Minister and the Chancellor of the Exchequer. It is being advanced at this very time. They should know that the main pressure for wage increases comes from the household at the weekend, on pay day when the money is handed over for the housekeeping. The Government should recognise that fact and take the initiative to reduce the burden on the housewife. Then, perhaps, the pressure of wage increases will drop.
I make no apology for referring to the situation of the housewife in the average worker's home. She has a seven-day week of unlimited hours. She has heavy manual work to do loaded with shopping. She does the washing and cleaning in the home. She carries out highly skilled administrative work in balancing the family budget. She takes care of the children. She is patching and scheming all the time. That is the picture of the average working-class housewife. If ever there was a need for a militant trade union, here it is.
I am not making a case for women's lib—
§ Mr. Wallace
My hon. Friend asks "Why not?". He may have greater experience than I in these matters. I am making a demand for a fair deal.
I ask the Government to set up an organisation for consumer protection, with effective powers, on not only a national but a regional basis, to deal with all aspects of consumer protection, including prices. That is the source from which the Government would get their best information. There should be appointed to that body a number of working-class housewives, because housewives have more practical experience of managing a basic budget than any Chancellor of the Exchequer has ever had. Because of the necessity to make ends meet, they know more about budgeting and price control than anybody. It would be sensible for the Government, in the national interest, to scrap all their feelings about 535 the organisation which they got rid of and set up such a body, give it some powers and ask for its assistance. If we were to go about tackling the prices problem in that way we should solve many of the present industrial troubles and give the housewife a fair deal, and I am sure that the worker would get a fair deal.
§ 1.22 p.m.
§ Mr. Robert Taylor (Croydon, North-West)
May I first apologise to you, Mr. Deputy Speaker, and to the House for not having been present during the greater part of this debate. I was prevented from being here by a long-standing commitment.
I listened with interest to what the hon. Member for Norwich, North (Mr. Wallace) said about prices and the predicament in which housewives find themselves. No one attempts to gloss over the seriousness of the situation, but whether regional consumer councils would be of use in such a predicament is a matter of opinion. The hon. Gentleman did not spell out what powers he thought such councils should have. Does he suggest that they should be able to tell the shopkeeper that he could not charge a certain price? Does he believe that they should have the authority to say "This is the proper price" and that if a company was going bankrupt it still could not increase prices? If so, we would be coming very near to the corporate State, and that is not what the majority in this country want.
I had intended to try to avoid being controversial today because I expected that the talks at No. 10 Downing Street would be continuing. I thought it was the duty of every Member to try to avoid making those discussions more difficult than they appeared to be. The situation has changed. There has been a breakdown in the discussions at No. 10 Downing Street. For me, however, the situation changed earlier. Last night I listened to a party political broadcast on the radio given by the right hon. Member for Newcastle-upon-Tyne, Central (Mr. Edward Short), who is Deputy-Leader of the Labour Party.
In that broadcast the right hon. Gentleman paid lip service to his hopes that the talks at Downing Street would be suc- 536 cessful. But he went on to damn their chances of success by saying that the only way in which agreement would be reached was to agree to every demand put forward by the trade union side in the negotiations. He suggested that past legislation should be scrapped. He suggested statutory control of prices but omitted to make any reference to statutory control of wages. We know from this morning's newspapers that there is a distinct likelihood that there will be a freeze on prices and on wages.
We should therefore face certain facts. It is my opinion and, I believe, the opinion of the vast majority of people that the talks failed because the trade unions are too powerful. The leaders of the trade unions who were present at the talks must have known that if they were to assent to any form of co-operation, less than total capitulation by the Government, the rowdy element in the trade unions in the lower echelons would have made life virtually unbearable for them.
If an example of that attitude is required, we have only to refer to the HANSARD record of this debate. Earlier in the week, when the right hon. Member for East Ham, North (Mr. Prentice) expressed his reasoned hope that the talks would be successful, he was interrupted by his hon. Friend the Member for Felt-ham (Mr. Russell Kerr), who said "Speak for yourself" In other words, the hon. Gentleman did not wish success to the negotiations. I should have thought that those who wished for the success of the talks spoke for the people of Britain and that those who did not spoke for themselves.
We must examine the situation in view of the ending of the talks and the statutory freeze which is in the offing. Many people must be sighing with dismay, because we have all been here before. We were here in the early 1960s, in the late 1960s and now in the early 1970s. The people of this country are tired of returning to voluntary or statutory wage or price freezes. Such statutory controls affect both those who, backed by the power of extortionate wage demands, have made the freeze inevitable and those who have been moderate in their approaches for salary increases and who have in no way contributed to inflation.
In my view, it is time that somebody spoke up for those people who are not 537 supported by militant trade unionists. It is time to say, "We do not want to go through this exercise time and time again, with statutory controls, taking them off and bringing them back", because everybody knows that they can at best be only an interim answer to the nations problems. As soon as the controls are taken off, we are back to square one and the powerful unions again make large claims.
Therefore, it will be difficult for me to support a Government proposal for a statutory freeze unless it is accompanied by two measures. We must as a country recognise that the unions are all-powerful and that if they make up their minds to make a claim for a certain amount of money no power, in a free society, can stop them achieving their demand. It is being said by many people—and one of my hon. Friends said it on the radio this week—that the capitalist system is again under very severe attack by the forces which have power in the economy. But. as the rules are drawn up, any system must fail if it faces challenge from the powerful unions.
§ Mr. Bidwellrose—
§ Mr. Taylor
I will not give way now; I will do so later.
The rules are weighted entirely against those who support the voices of reason, those who urge common sense and those who urge moderation. It is like two people starting a race and one of them tying his own ankles together before the race starts. The supporters of moderation take up that position by agreeing in advance to pay benefits to those who stoke the fires of inflation.
Therefore, if the Government wish to introduce controls, they should be accompanied by a measure which will withdraw benefits from strikers families and it must make the unions responsible for their members during a strike. It shall no longer be the long-suffering public which pays the cost of these strikes. At the very least, what should be done is to make the benefits available in the form of a loan quickly recoverable from earnings when a settlement occurs.
§ Mr. Bidwell
I am much obliged to the hon. Gentleman for giving way. In his theory of the nature of the British trade union movement at the present time, is the hon. Gentleman seriously asking the House and the nation to believe that 538 its intelligent leadership can run ahead of its intelligent membership, or is he trying to tell us that the militant pressures on the fringes are resulting in the leadership doing other than what the bulk of the membership requires? Is that what he is trying to say?
§ Mr. Taylor
That may be the hon. Member's opinion, but I certainly think that my opinion represents the opinion of the vast majority of people in the country today. Recent strikes have shown that powerful forces stir up a problem into an explosive situation. If the House feels that this is not the case, I would ask hon. Members to remember the scenes at Transport House when the General Secretary of the Transport and General Workers' Union was himself confronted by militant members of his own union.
The second point, which I think is equally important, is that I would support controls introduced to stop retrospective pay awards. This is very important today for the future of our economy. Retrospective pay awards give an incentive to those who are demanding the highest figure to prolong their negotiations, to prolong their strikes and to hold out to the bitter end, because they have the knowledge that back pay will make up any losses caused by the delay in coming to a settlement.
I know that these two measures would meet a great deal of antagonism on the part of the unions and of some hon. Members on the Opposition side of the House, but I would be surprised if any hon. Members have not been urged through their postbags by their constituents to control strikers' benefits. The Government will be accused of starving people back to work. That would not be the case at all. It would be a case of the Government no longer paying them to stay away from work; the work would be there as it was before the strike started.
Those measures are called for by the vast majority of the people of this country today. It is time the Government faced up to this situation. It is time the Government faced up to the unpopularity of 539 strikes. It is time the Government faced up to the opinion of the vast majority of the people that the country is being held to ransom. Let the Government have the courage and the leadership to tackle these two points at the same time as they consider measures for dealing with the country's economic situation.
§ 1.33 p.m.
§ Mr. W. E. Garrett (Wallsend)
This has been a very unreal debate on this part of the Queen's Speech. The hon. Member for Croydon, North-West (Mr. Robert Taylor) obviously did not hear the two main speakers today. He obviously did not hear the speech by the Minister or that by my right hon. Friend the Member for Workington (Mr. Peart).
§ Mr. Garrett
I listened attentively to what the Minister said. I am glad he is back in his seat and I hope his meeting this morning has been successful. I thought his speech was in a very low key. Perhaps it has been a heavy week for him and he is rather tired, a little weary. I noticed an omission in his speech concerning food prices, and that omission was the prices which are being paid for farms in the United Kingdom. That omission was partly rectified by the hon. Member for Devizes (Mr. Charles Morrison), who is not now present. He approached the subject but moved quickly away from it.
The prices factor which has been rampant in the hill farm areas deserves attention, because public opinion at the moment seems to be focused mainly on urban and city land and the astronomical prices being reached for that sort of land. Some attention should be given to the situation, especially in the north of England, where we have had Members of this House and of the other House involved—rightly so and honourably so —in deals affecting land which they owned or which they wished to purchase. There is one Member of this House who 540 bought 5,000 acres at £100 an acre. That is a lot of money and a big area in the north of England. I also know of a Member of the other place who paid £142,000 for a farm just three weeks ago.
The thought comes to mind, who is going to pay for the return on that investment? Clearly it will be reflected in additional prices for foodstuffs. The Minister is shaking his head, and possibly he can challenge me, but I have a view on this matter and I think that my view is as reasonable as that of anyone else. We have reached the stage where there is large-scale investment in land, so much so that the small farmer who wishes slightly to enlarge his farm cannot raise the money to do so. Landowners are obviously acquiring more and more at these higher prices. As I say, we shall in the long run pay more for our food to cover the return on such investment. I say again, it will be the consumer who has to pay.
I turn to the question of the hill farmers. I should state an interest as I happen to live in a rural area. I live in the area represented by the right hon. and learned Member for Hexham (Mr. Rippon). I know quite a number of hill farmers. At the moment they seem relatively happy. I concede that their position has improved over the last year or so. This is due without any doubt to their getting better prices for mutton, because mutton is a relatively good buy compared with the high prices prevalent now for beef. In my opinion, those hill farmers are getting a reasonable return, plus a fair price for wool as well. However, there is still uncertainly beyond the next three to four years. Although their production represents only about 8 per cent. of total United Kingdom farm production, I think they will require more adequate long-term assurances than they are getting at present. They are cashing in on the scarcity of beef—or, rather, not so much the scarcity of beef as the high prices charged for it. I think that this will continue, but I should like to see the hill farmers given more consideration. I am sure that the Minister is aware of all this and I am quite sure that even within the negotiations within the EEC the longterm interests of British hill farmers will be given consideration, but I thought I would raise the matter now to keep it as far as possible in the Minister's mind. 541 It would be remiss not to mention the recent offer made to the farm workers. I was disappointed by the attitude of the National Farm Workers' Union. It expressed satisfaction. I though it was an admission of too much happiness about the matter. I thought it would have been unhappy that the industry could not afford to pay at least a £20 minimum. I would have thought that the National Farmers' Union would have made more determined efforts to increase the offer. It may be that it will, and I hope it will, because many of the people in this industry earn more than the minimum. That is understood. The £19.50 which has been offered to the farm workers is rather confusing to the ordinary citizen when he sees the high prices being paid for farms which are up for sale. A much more satisfactory offer should be made to the farm workers.
I consider that the rural development boards were dissolved too prematurely. The Northern Pennine Rural Development Board should have been allowed to establish itself over a longer period. After all, the policy of the NFU is to encourage these boards. In a statement made by the NFU on 3rd May, 1971, it was said that the Northern Pennines Rural Development Board should have been kept in operation and its powers used, with limited funds, for the restructuring of hill farms and to reconcile the various interests of forestry, tourism, amenity and agriculture. These problems still remain in agricultural areas. They are being tackled piecemeal and not in a concerted manner, and that is not good enough. Since so many policies have been changed in the last two years it would not be remiss if the Minister and his Department were to look again at this problem and try to revive the rural development boards.
The urgent matter today is the question of prices. The Minister has not convinced the public that he has a grasp and understanding of public concern about prices, nor has he convinced the public that positive attempts are being made to check rising prices. Whether we are pro-Marketeers or anti-Marketeers, we are all apprehensive about what is likely to happen to prices over the next four or five years. It is expected that they will go up, but no- 542 body is sure by what precise percentage. The position should be clarified and stated more objectively to the public. I am not criticising the Minister personally; other Ministers have a responsibility too. But rising prices are causing more concern than anything else—a concern which is far beyond people's political affiliations. As my right hon. Friend the Member for Workington said, it would be much better for all if there were a much stronger voice on this subject.
The absence of hon. Gentlemen on the Government side in this agricultural debate is disappointing. Back-benchers like myself do not normally have an opportunity to express their views on agriculture. The reason why so many back-benchers are absent today, although it is a Friday, is that they are probably in their constituencies trying to explain the present chaotic situation. Those of them who read the debate in HANSARD on Monday may well agree with me that what we have heard LID till now has not been reassuring. The Minister of State has yet to speak and we may get from him more decisive statements than we have had so far. He is a decisive man who can enter debates in a robust manner, and I hope he will do so in replying today. My final plea is to ask the Government to look again at the rural development boards.
§ 1.44 p.m.
§ Mr. William Hamling (Woolwich, West)
It is a pity that the hon. Member for Croydon, North-West (Mr. Robert Taylor) did not hear the speeches made by the two back benchers opposite who intervened earlier to boast about the achievement of the Government in pushing up farm prices over the last two years. He made a typically union-bashing speech. The question I would put to him, and to other apologists on the Government side who may be making speeches on the breakdown of the tripartite talks, is whether the trade unions are to blame for the increase in the price of food.
The whole burden of the speeches from the Government side has been "Good, the Government have done very well in pushing up farm prices", but who is paying them, and for whose benefit have farm prices been increased? Admittedly, 543 farm incomes have gone up in the last two years. Again one might ask: are the trade unionists to blame for that? Are the trade unionists to carry the can for all the price increases that the Government have cheerfully accepted?
My hon. Friend the Member for Wall-send (Mr. Garrett) referred to the price of lamb. Everyone knows that the price of lamb has shot up in the last two years, and this is because people have not been able to afford beef. Housewives are being forced to accept cheaper cuts. For example, the price of imported shoulders of lamb, according to a Government publication in September, has gone up 55 per cent. between July, 1970, and July, 1972. I do not know by how much it has increased since then.
The ordinary trade unionist and his family are just as much the victims of these higher prices as anyone else. Home grown lamb is much too expensive for them. The ordinary housewife has to buy cheaper cuts such as breast of lamb. The price of brisket has increased by 42 per cent. in two years. Rump steak is up by 33 per cent.—not as much as some of the cheaper cuts. That is because the butchers cannot sell it. Home-killed breast of lamb is up by 36 per cent. To come to fish, cod fillet is up by 44 per cent. How can the ordinary person be expected to exercise restraint against increases of this sort?
Government supporters say that it is all the fault of the trade unionists; but is it? Are they to blame for the fact that Cheddar cheese, according to Government statistics, has gone up 70 per cent. in two years? The Government must have a better explanation than this, and they must have some regard for their own responsibilities and policies for encouraging inflation.
New Zealand butter has gone up 50 per cent. in two years. I know what the Minister said about that in his speech, but Government supporters cannot blame inflation on the trade unions. The right hon. Gentleman was talking of world causes, and I have always accepted that, but Government supporters who say that it is all the fault of world prices over which they have no control then start to bash the unions. The whole community is in this, not just trade unionists. I regard the to-ing and fro-ing of last 544 week as unreal. I assert that the ordinary working man, his wife and family, are the victims of inflation just as much as anyone else.
One Government policy which has contributed directly to developing and stimulating inflation is the basis of budgetary finance. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), when Chancellor of the Exchequer, budgeted for high surpluses as an anti-inflationary device. The present Government have not done so; they have reversed that trend, and public investment has been more and more in the form of loans. That is inflation. We can quickly see the situation that we face when we look at the balance of payments situation and the outflow of currency in the second quarter of this year amounting to over £1,000 million—the worst quarter we have had for many years.
The Government inherited a record surplus. But in a period of two years what has happened to the balance of payments? We have already had a devaluation of more than 10 per cent. and must ask what effect this will have on living standards and prices. In the face of a 10 per cent. devaluation and all the price increases which the Government have engineered as a result of their policies, how can they say to ordinary people and to the trade unions "You must be patriotic and exercise restraint"? It is difficult to ask trade union leaders to accept a policy of restraint because, against this sort of inflationary background, those leaders are not in a position to deliver the goods.
A few days ago the EEC Foreign Ministers met to work out a common policy on inflation. The Chancellor of the Exchequer returned to No. 11 Downing Street—and what happened? Some of his friends in Europe went on selling pounds, and we have had further losses of currency this week. Is this not a wonderful example of Common Market solidarity? Even now some Western European nations are speculating against the pound and the dollar. A considerable increase in money supply has taken place in the last few weeks, quite apart from the banks pursuing credit systems such as Access cards.
Are the Government powerless to control the supply of money? It would appear that they have nothing to say of 545 any great importance to the ordinary working people. The Government, because of the policy they have pursued, must take responsibility for bringing about inflation. They cannot blame inflation on just one section of the community. Whose fault is it but the Government's that we have had a free-for-all in wages in the last two years? It must be remembered that the Government promised to end restraint at the last election. They promised in their election manifesto to give freedom to the trade unions to demand what wages they liked. They cannot now, two years later, say to the country "We were wrong". We knew they were wrong.
I said during the General Election that we had to have a rational prices and incomes policy. We tried such a policy when we were in power and we had our failures, but I regard this as an essential issue in our democratic society. The Government will not be able to "sell" a prices and incomes policy to our people so long as the Tory Party regards the trade unions as not part of the community. The union-bashing type speech made by the hon. Member for Croydon, North-West will not help the situation. If we are to have a consensus in the community the Government must be part of it, and they have their own contribution to make. The rent increases and the bashing of council house tenants must stop. It is no good calling on ordinary working class people in London to pay rents of £10, £12, £14 a week—and these are the sort of rents that are current for some of the latest council houses—and then expect them to be patient and suffer price increases all the way round.
We cannot set out to control wages alone, nor can we accept a situation in which a prices and incomes policy is to be accepted against a background of high unemployment. The Government must accept, as a condition of any settlement, a policy of full employment and must shy away from any acceptance of a situation involving 850,000 unemployed in order to try to hold down wage demands. This is the sort of consensus we must have if the Government are to come across with an acceptable policy.
We must look at taxation policies again. The Government have gone in largely for a policy of rewarding their friends by giving them tax concessions.
546 We have only to think of income tax and corporation tax cuts which benefit the wealthy, for certainly the greatest part of those concessions has gone to the better-off in the last two years. It is no good expecting working people to accept a prices and incomes policy against that sort of background.
On top of this we are to have value added tax, with all that it means for the working people in terms of price increases across the line. The prices of household goods will increase, as will the price of clothing and other essentials. The Government cannot expect people to be patient and patriotic when the Government are deliberately putting up the prices of ordinary household commodities, such as the price of a pair of shoes for a working class child. It is no part of a policy of consensus to make working class people pay a disproportionate share of the burden of entry into the Common Market.
The common agricultural policy is only part of the problem. Value added tax will play a very large part in our lives. I wish the Government would come clean about the imposition of VAT on food. Labour Members have repeatedly tried to put direct questions to the Prime Minister and the Minister of Agriculture on whether when Britain is inside the Common Market we shall be bound to put VAT on food. We have had no answer to our questions. We asked these questions during the Committee and Report stages of the Finance Bill, but we still have no reply.
The people of this country are entitled to answers on those questions if they are to be asked to accept new policies and to agree to the Government going back on promises which they made only two years ago. The people at least have a right to be told the facts about what will happen to prices in future. What will happen when the EEC demands uniformity of value added tax on food? It is idle in those circumstances to expect people to accept voluntary restraint on incomes.
There are many other ways in which the Government have been putting up prices. We all know what has happened to rates. The Gracious Speech mentions local government finances. What is the Government's policy in respect of local government finance as related to rates and Government grants? Are they 547 to go back to the sort of policy that was pursued in 1955, or even very much earlier in 1929 when the burden of social development in the boroughs and towns were placed on ratepayers and resulted in enormous rate increases? The people are entitled to ask these questions.
There are many price increases for which the Government are directly responsible, in welfare foods, services and materials and in the National Health Service. There is also the ending of free school meals. All of these have directly contributed to increasing the cost of living for the ordinary person. The Government have their responsibilities, and, instead of offering excuses, it is about time they accepted their responsibility for the tremendous surge in inflation in the last two years.
§ 2.0 p.m.
§ Mr. John Mackie (Enfield, East)
My hon. Friend the Member for Woolwich, West (Mr. Hamling) has ranged slightly wider than the subject of agriculture in what was an interesting and pertinent speech. Naturally as a farmer and a member of the community, I am delighted to see the increase in agricultural production because it is good for everyone. It has not, however, reduced prices as the Minister said it would. He has produced a few statistics showing a reduction in the wholesale price of beef but not in the retail price. The right hon. Gentleman did his usual stunt and painted what he called the "cheerful picture". We must not have this picture at any price and so far it has been a fairly high price.
What we are getting tired of, from the right hon. Gentleman, the Parliamentary Secretary and also partly from the Minister of State, is the claim that they are entirely responsible: "Hills full of cattle and valleys full of corn alone I did it. "The Minister of State is more modest in here and admits that the weather might have had something to do with it. He admitted under pressure at Question Time, rather unwillingly, that the Almighty might have had something to do with it. That is like the story of Disraeli and Gladstone. Disraeli said he did not mind Gladstone always having an ace up his sleeve provided he did not always presume that God had put it there. There are many stories about the 548 Deity doing things for us but what suits the Secretary of State and his Ministers best is the Scots saying:De'il's aye guid to his ain.I'd better translate. It means "the Devil is always good to his own."
The right hon. Gentleman spoke of what my right hon. Friends and myself did when we were in office. Our record on agricultural prices will stand examination in any quarter. The Minister of State is a Scot and he has some experience in the Department. Perhaps he can help in one direction. When looking up statistics I find that the Scottish figures have been nut down in a different way from the English ones and it is a devil of a job getting a final result. Will he have a word with his Scottish colleagues and try to get these put down in the same way for the same year and going hack the same number of years?
The Minister spoke of what he inherited. Six years before the Labour Government came in there was a decrease in cereal prices of 2d. per cent per annum. The Minister mentioned soil structure and how bad it was and how he had had to retrieve the situation. The squeeze that took place in agriculture during the late 'fifties and until 1964 brought about a high cereal acreage with no stock. We took over that situation and had almost dealt with it by 1970. Hon. Gentlemen opposite complain that there was not enough beef, yet the former Tory Administration raised the price of beef by only 2s. 2d. a cwt. annually. Their costs over the period were £l6⅔ million a year. During the six years of the last Government we put up the price of cereals by about 4–½p per cent. a year and the price of beef 8s. 8d. per cwt. a year. Average costs were only a little higher than twice the figure of the previous Government, about £37 million. If we take the plain figures our price record and the structure that we have given to farming are shown to be a lot better than those given to it by the Conservatives.
In the last two years the Conservative Party has been boasting about what it has done for beef. It gave an average increase of 20s. 9d. for beef but the average costs over the last two years have been £94 million. It is as well to bear these figures in mind when Ministers denigrate what we have done.
549 Let us look at this rise in production. The main plank is an increase of stock and growing our own feed. The "Little Neddy" Committee on Agriculture and the Select Committee on Agriculture said that to do this we would need an increase of about 1½ million acres of cereals, mostly barley, and a far better use of grass. This is where I come unstuck with my figures because I am unable to correlate the Scottish figures with those for England and Wales. I have taken the latter. Although cereals are up by 220,000 acres, which is quite a bit, it has been done at the expense of tillage because the total tillage is down by a few thousand acres. The Scottish figures are also down.
I do not know where the Minister is getting his figures from. I have the returns issued by the Departments. He talks in percentages but he missed out various things, conveniently if I may say so. The increase in cattle is something like 600,000. Out of the total of 3,700,000 this is not a big percentage, and practically all of it came from the decrease in calf slaughterings in the last two years. Calves are not produced in a few months, nor are fat cattle. It takes at least two years. A lot of this was already in the pipeline when the Government took office. As calf slaughtering remains the same, so the increase in the beef herd remains the same. Therefore, the most we can expect over the years is 100,000 extra beasts unless we achieve a larger increase in the breeding herd. I do not know whether we shall manage that. The Minister said that a lot of the beef heifers which are in calf had been pulled out of the beef supplies. That is quite good, but not so good a picture as the Minister painted.
There is nothing spectacular about pigs —an increase of 500,000. I do not know from where the Minister got his figures showing that pigs are on the increase. In fact, they are on the decrease. There are 1,000 fewer breeding pigs today than in 1970, and the numbers are going down. Therefore, I do not understand how the Minister can claim that things are going ahead as well as he would wish.
The Minister claims that, apart from the 200,000 extra acres, we shall have a harvest of 15 million tons this year. That is spectacular, to say the least—it is the highest it has ever been—but it has been 550 caused mainly by the weather. The increase in fertiliser use has been created because the farmers, knowing that the subsidy would be reduced by two-thirds, have bought in. This has given a false impression of fertiliser use. I do not think anybody knows how much farmers bought and used. The use of fertiliser is nowhere near so great as the increased amount which has been bought in by farmers.
All this was supposed to create a big saving in imports. Looking at the returns, taking the 28 months of this Government compared with the last 28 months of the Labour Government, the figures are practically the same. There have been more cereal imports per month since right hon. Gentlemen opposite came to power. The figures were £21 million a month before they came to power and £22 million per month since. However, feed imports are practically the same—£6.8 million a month—so nothing has been saved there. The Minister's £15 million of cereals have not reduced imports.
I am glad the right hon. Gentleman is back—I assume refreshed. He claims that what has been done is the result of his pricing policy. The Government's pricing policy is not much, if any, better than ours. No doubt the Minister of State will give the right hon. Gentleman the figures I have quoted. Market prices have been better. The high prices of butter, cheese and dried milk have pushed up the price of milk. World prices of beef have forced up the price not only of beef but of all meat. The guaranteed price is £13.30 per live cwt., but prices have been as high as £16 and £17 in some parts of Scotland. The average price today is between £15 and £16 per live cwt.
Both the right hon. Gentleman and his his hon. Friend are farmers. What would happen if farmers had to take the guaranteed price today? It would make a difference of nearly £30 per animal, which is more than their profit. It is not the Minister's pricing policy but the world price of beef which has created the demand here and pushed up the numbers of cattle. If butter, cheese and dried milk prices come down, milk could come below the guaranteed price. This has happened many times before. High world prices have helped the Government in their agricultural policy and the farming 551 community. The British housewife has made farming profitable because world prices have pushed up prices here. We have also had two first-class years of farming weather—there have never been two better years—and this has been of tremendous help.
In his closing remarks the Minister made some derogatory comments about the situation in the last few years of the Labour Government. That situation arose because of the traditional fact that most farmers are Tories. The right hon. Gentleman and his hon. Friends who represent farming constituencies kept up a running propaganda against my right hon. Friend's policies when we were in office. They kept on about prices, and so on, well knowing that world prices controlled prices in this country. Both the Minister and his Minister of State are farmers experienced in politics, and they know how volatile beef prices are. Going back only 10 or 12 years, beef prices went down and up in remarkably steep falls and rises. There is supposed to be a world scarcity of beef, but it is amazing how quickly the situation can change. What arrangements have been made for intervention buying? If the Minister has not made any arrangements, the farming community will not be so friendly next time he sallies down to the West Country or any beef producing area.
I have never accused the Government of purposely pushing up prices. Their policy was to bring in the levy and to raise the price ultimately, when the deficiency payments came off, to the guaranteed price, or however it was to be worked, under a levy system. However I accuse them of misleading everybody on this subject, because they knew that prices here were controlled entirely by world prices as we buy half our food abroad. That is the allegation I make against them, and they never had the grace to admit it.
Right hon. and hon. Gentlemen opposite continually deride our early warning system and the restraint we succeeded in achieving. I am sure my right hon. Friend will allow the Ministers to go back to the files to see the amount of work we put in on the early warning system to restrain price increases. They would see how much effect it had when we kept down prices over a year when manufacturers and producers wanted to 552 raise them. However, as soon as this Government came in they scrapped the whole system. That is one reason why prices are completely out of control. They are now almost falling over backwards to find some system to restrain prices, but it is too late. I am sure that over the last two years some restraint could have been imposed if they had been willing, but they were not, and they are now suffering in consequence.
My constituency, like others, has many old-age pensioners. The one complaint I receive is that the pension is always eroded whenever any increases come along. We are all inclined to forget that the pensioner does not buy new furniture, lots of new clothes, and so on which make up the cost of living index; most of his or her money is spent on food and other essential items. If food prices shoot up by 22 per cent. to 23 per cent., those on fixed incomes and pensioners are hit harder than anyone else, and the Government should appreciate that and look at their position differently. The Minister said that the Government had improved the situation by undertaking to review pensions every year instead of every two years. They were forced to do that because of the speed at which prices were rising. They did it because they had to. There was nothing gratuitous about it.
My hon. Friend the Member for Walls-end (Mr. Garrett) said that the Government were thinking of appointing a a Minister for Consumer Protection, and he referred to the glamorous hon. Lady who was likely to be appointed to the job. With respect to the two hon. Ladies present, I do not think that my hon. Friend was referring to either of them —not that they are not glamorous. The glamorous Lady's husband to whom reference was made has bought a farm for £1 million, or about £1,000 an acre. But, of course, that does not detract from her ability to be the Minister for Consumer Protection.
My hon. Friend asked what would happen about this fantastic increase in the price of land when, as sure as night follows day, there are rises in rents. The increase will have to be put on the price of food, and he was right when he said that the Government should be looking at the situation. Reference has been made 553 to land costing £100 per acre. On looking at the Farmers Weekly for the last week, I found that the average price was more than £600 an acre. By any standard of return, that is £30 in interest rates. I know that they are not asking that now, but the day will come when they will, and I should be glad to know whether the Government have any ideas on the subject.
I did not see the Minister's statement about wages, but I presume that my right hon. Friend's quotation was correct. My view is that whatever rise farm workers get they are worth every penny of it. I have worked all my life with farm workers. There is no body of labour which I respect more, and anything which detracts from their getting a good wage increase must be deprecated.
My right hon. Friend concluded his speech with a condemnation of the common agricultural policy and our entry into the EEC. I shall not comment on his statement other than to say that I disagree with him.
We all know, and some of us understand, why the CAP came into being and how it has developed. We see the need for some change, as do those in the agricultural section of the EEC. Do the Government see the need for any change? The Government opted for a levy system whether or not we went into the EEC. The right hon. Member for Grantham (Mr. Godber) always emphasised that it had nothing to do with the EEC, that it was a change of policy from deficiency payments to the levy system. This is therefore Government policy, but we are now going into the EEC and I do not think that the Government can regard the CAP as perfect. Many people in the EEC do not think it is.
In the last two or three years Italy has become a food importer. Because of that, she sees the need for some change in the CAP. But what are the Government going to do, having opted for the levy system? Their arguments for any change will not be very strong. Are they anxious to see any change in the CAP? If they are not, it will be a considerable stumbling block if one new member sticks to the policy of a levy, particularly with regard to countries which import a lot of food.
554 The Government must no longer try to produce alibis of one kind or another. The Minister of State laughs, but the Government have been doing just that for far too long. They have been making excuses for not doing anything about the situation. They are the Government of the country, and it is their duty to do something about it. They are responsible for it, and we are not going to put up any longer with this lack of action by them.
The Government did nothing about the increases in food prices. They should have taken action. Referring to the speech of the hon. Member for Croydon, North-West (Mr. Robert Taylor) and to what happened yesterday, my experience is that food prices have a tremendous lot to do with the pressures on men to ask for higher wages. When I talk to people in my constituency, I realise just how much pressure is exerted by wives. Most hon. Members present today are married and know just how much pressure a wife can exert. If she keeps up the pressure for long enough, her husband has to do something about it. The wives of most working men react in much the same way as our wives, and the pressure which they put on their husbands is one reason for the pressure for higher wages.
Because of what the Government have done in various ways, and because they have allowed the prices of food, land and property to rise rapidly, I do not wonder that they have failed to get agreement at the Downing Street talks. We are all sorry that the talks have broken down, but in many ways the Government are to blame. The hon. Member for Croydon, North-West seemed to think that the TUC and union representatives had no right, as he put it, to "hold the country to ransom". What he fails to realise is that they represent the largest body of people in the country. I do not know just how many they do represent, but it is certainly the largest body of the population. I do not know how many are represented by the CBI, but certainly the TUC side represents more people than the CBI does, and it was the duty of the union representatives to see that their members got a fair share of the cake. The talks have broken down because, obviously, they were not to get that fair share. Food prices have a lot to do with the situation, and I appeal to 555 the Minister to put that in his pipe and smoke it.
§ 2.28 p.m.
§ Mr. Sydney Bidwell (Southall)
I do not know what private view you have about televising our proceedings, Mr. Speaker, as I have not had the chance of a private discussion with you to find out, but in my view the way in which the debate has proceeded today makes the case for television rather than against it. I say that because this is one aspect of the work of Parliament which should be more widely and publicly known. That does not mean that I am ashamed of what is happening here today because it has, almost of necessity, to be a constrained and hesitant kind of debate following the striking events that have been taking place in Downing Street on the question of prices and runaway inflation, which is what this debate is all about.
During the speech of my hon. Friend the Member for Enfield, East (Mr. Mackie) I recalled the last time I followed him in a speech. It was when he kindly came to East Hertfordshire, where I made my first attempt to get into Parliament, to help to put over the Labour Party's policy on horticulture. My opponent at the time was the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith). The glasshouse industry runs through that part of East Hertfordshire, and it was in that sense that I became acquainted with horticultural and agricultural affairs.
I should normally be hesitant about taking part in a debate on agricultural matters. I regard myself as very much a student at the feet of my right hon. Friend the Member for Workington (Mr. Peart), who leads for this side of the House today, my hon. Friend the Member for Enfield, East and, to some extent, the Minister.
The debate is not just about the home production of food, important as that obviously is. It is not about that that I shall make my contribution today. I have no view on a policy of burning straw, save that a great amount of straw will undoubtedly be burnt on 5th November. I cannot comment on questions of cereals or pig production in any meaningful way.
556 I can, however, because of my experience before coming to the House, comment seriously on the major matter of concern to the nation at present and the matter about which the Minister must be more knowledgeable than the rest of us. We wait with bated breath for the Prime Minister's statement on Monday. I do not seek to detract from the seriousness of the matter the Government have had to deal with. The nation's fortunes are at stake in the attempt to grapple intelligently with the existing rate of inflation. The awareness of that is no greater on the Government side of the House than it is on this side. In that sense we are all in the same boat, whether we are in or out of the Common Market.
I said earlier with some trepidation that I was thinking of the possible televising of a debate of this kind. What I would most like to have happened was the televising of the events in Downing Street, because the nation is entitled to know all the facts and not to have simply a one-sided presentation of events there. I claim licence to make these remarks, because on television last night the Prime Minister gave the nation his version of events and I do not believe that it was likely to be the correct version. The telecaster or announcer alternately used the words "breakdown" and "breakup"
As a former trade union education officer, as a former member of the National Union of Railwaymen for most of my working life and for several years now a member of the Transport and General Workers' Union, I can tell the Government that, in the nature of the British trade union movement, there can never be a breakdown of talks between the Government and the Trades Union Congress. It has been traditionally the policy, and is likely to continue to be so, that whenever a Government wish to talk to members of the General Council or leading figures of the Trades Union Congress, those people are available for talking.
There have been pressures within the trade union movement for the TUC not to talk to the Government, but I believe that such pressures go contrary to the preponderantly intelligent view of trade union leaders—that is what the vast majority of them have to be—in 557 marked contrast to the contribution of the hon. Member for Croydon, North-West (Mr. Robert Taylor). It is not possible to get closer to solid ground in these matters than in the trade union movement.
It is a lie to suggest that the average working trade unionist and the average black-coat trade unionist in organisations like NALGO, the NUT, ASTMS and the Civil Service unions, quite a number of which are not even affiliated to the Labour Party, is interested in inflationary wage increases. I know from my experience of conducting trade union summer schools and from teaching men and women who in some cases had left school at as early an age as 12, although in most cases at 14, that they well understood that it was far more important to have real wage advances than to have inflationary wage increases. Those people were as concerned as any patriot about the resuscitation of the British economy.
The picture painted by the hon. Member for Croydon, North-West was incorrect. My guess is that the hon. Gentleman has no trade union experience, certainly not as a shop steward or as anybody holding a responsible position in the trade union movement. Such a person is rare on the Tory benches. Hon. Members on the Government side have not participated in the grass roots of the economy or national industrial life. One of the great maladies of the debate on the Industrial Relations Bill was the almost total absence of worthwhile industrial experience on the part of Tory Members.
The Gracious Speech makes no mention of industrial relations. Our future depends on the relations between employers and workers and how employers and workers can pull together in the interests of the economy. Therefore, on a matter of supreme importance there is a vital gap in the Gracious Speech. Has the Prime Minister run out of ideas? He suggested not long ago, when addressing the Conservative Women's Conference, that after two years of Government he had run out of ideas and that the Government had exhausted their programme up to that time. It is a good idea for any Government which take that view to have a 558 general election to test the feeling of the people with a view to their going on with a programme which they have set before the nation.
An additional reason for my entering this debate was the Minister's reference to old-age pensions. It was not good enough for the Minister to treat the House to a Social Services Ministry handout about how good the Government have been in helping old-age pensioners to surmount the ever-rising cost of living, in particular the ever-rising cost of food. If the Minister were to address an audience of old-age pensioners in his constituency in that way, they would ask "Why is it as lovely as the Minister suggests when we know that everything is so awful?"
It is not only hon. Members on this side who are passionately aware of the total inadequacy of £6.75 for a single pensioner and £10.90 for a married couple. Most hon. Members opposite are conscious of this. The Government constantly tell us that these figures are inadequate and they tell of their grandiose plans for the future, especially the negative income tax, to which I am not opposed. I do not think that most of my hon. Friends will be opposed to the negative income tax idea in principle if it proves to be a practical way of getting money into the pockets of the needy without subjecting them to the indignities of the means test but using instead a means testing system through the income tax processes.
What my hon. Friends and I object to is the fact that, in face of astronomical rises in the cost of living in the last two years, presumably with more to come over the next two years, the negative income tax idea is a never-never plan and is futuristic. It talks about doing something in 1975.
When preparing my Ten Minutes Rule Bill last Session I had to examine the question of pensions in some detail. I proposed that the national retirement pension should be related to national average earnings—a very good yardstick to which the Labour Party Conference alluded in one of its resolutions.
We have the situation, as my hon. Friend the Member for Enfield, East said, that while there has been an announcement of an increase in the basic 559 State retirement pension in conjunction with the spring Budget, that increase will not come into effect until the autumn. Old people and the desperately poor will see that as a hoax. They will consider that the Government are pulling wool over their eyes. At the present rate of inflation almost all the increase will be eroded. It is not good enough for the Government to treat pensions in that way because of the acute national anxiety which now exists.
I served on the Standing Committee considering the National Insurance Bill earlier this year. I know that the attitude of hon. Members opposite on that Committee was to put some money into the pockets of old-age pensioners. That is partly what the discussions have been about at Downing Street during the last few days. I do not know whether the Government are aware, apart from a few compromises and getting the TUC to help them out of an acute and critical difficulty following the devaluation of the pound, that in spite of what the hon. Member for Croydon, North-West said the trade union movement is essentially a patriotic and peaceful movement.
The history of the trade union movement is one of peaceful movement in industry, peaceful negotiations and mainly peacefulness during strikes. In the 1926 General Strike, that peacefulness characterised one of the gravest periods of our history. I hope we shall not be running into something like a general strike because of the Government's stubborn attitudes in not accepting, in a grave situation, the argument of the TUC's chiefs that one has to peg the prices of essential commodities by law.
According to the Prime Minister last night, it is on that issue that the talks have fallen down. That will be construed by the nation, when it knows the facts, as a totally unreasonable attitude on the part of the Government. It seems that the Governments' tactics are to put the trade union movement in an unfavourable position. They are afraid of a general election, partly because the British people do not want to go into the Common Market and the time is now close to entry, and partly because they think there will be some measure of pay-off in econo- 560 mic terms in the autumn of 1974. Perhaps that is when we shall get the General Election.
If the Government have tried to put the trade union movement in an unfavourable light in order to rally public opinion to the side of the Government and to denigrate the trade union movement, their effort has come unstuck. It is not possible with the educated level of our people, and especially the trade union movement, to rally public opinion like that. In the end, the truth will emerge that the TUC put forward reasonable proposals and that it is just as anxious to beat inflation and rising prices as any other body.
§ 2.45 p.m.
§ Mr. John Page (Harrow, West)
I am grateful for being called at this important moment in the discussion about prices and incomes. I am grateful that my right hon. Friend the Minister of Agriculture, Fisheries and Food, who is so influential in the councils of the Government, is here to listen to my contribution as I intend to say some nice things about him. I am grateful to him for being prepared to listen to the offerings of a humble backbencher at this important moment.
§ Mr. Page
There are few farms in Harrow and I do not often listen to agricultural debates. Therefore, I always look upon my right hon. Friend in a friendly spirit because he has done me nothing but good. I hope that situation will continue.
The country is extremely disturbed at the breakdown of the recent talks. The expectations of the country have been heightened during the last couple of months by the negotiations. The country hoped that, with co-operation and conciliation a national policy agreed by the CBI and the TUC and the Government would be reached. Whatever the hon. Member for Southall (Mr. Bidwell) and Mr. Feather may say, the country must know clearly that the talks broke down because the trade unions did not want them to continue. They did not want them to continue because at the last 561 Trades Union Congress a motion was passed in the following terms:That this Congress reaffirms its opposition to wage restraint in any form and instructs the General Council to refuse discussions with the Government or the CBI that have this in viewThat point was made clearly by the hon. Member for Tottenham (Mr. Atkinson) on the radio this morning. The hon. Member speaks in an uninhibited manner and, if I may say so, often blurts out the truth.
It was a pity that the TUC did not come clean about the impossibility of discussing wage restraint at an earlier stage. If it had done so it would have saved the raising of expectations in the country. It would have saved a lot of wasted effort and time by the CBI, the Government and many political commentators. On the other hand, it was impossible for the TUC to continue when Mr. Clive Jenkins and others not only said that they would repudiate any result that might come from the talks but that they did not believe that the General Council had any right to negotiate with the Government on their behalf.
§ Mr. Ronald Brown
Unfortunately the hon. Member was not present when I made my speech. Mr Clive Jenkins said that in 1966 and the Conservative Party then agreed with him that the objective of a prices and incomes policy was not valid.
§ Mr. Page
I wish I had had the opportunity of hearing the hon. Gentleman's speech. I will read his speech most carefully in HANSARD on Monday.
It seems generally accepted by the Press and by informed commentators that the Government are likely to produce a package roughly of the kind which they finally proposed at the end of the discussions which finished last night and that the package is likely to have some kind of legal backing. I am surprised by the general enthusiasm which the suggestion of a statutory incomes policy has aroused.
This morning I looked through the history of prices and incomes legislation. It all started when Mr. Speaker was Chancellor of the Exchequer with a pay pause in July, 1961, and then, through 1962 and 1963, his guiding light policy. 562 In 1964 Lord George-Brown had his declaration of intent, a voluntary policy which it was thought would be a success. In 1965 there was the Labour Government's first early-warning system based on a White Paper. In 1966, when the right hon. Member for Stepney (Mr. Shore) was an important member of the Labour Government, there was the new Prices and Incomes Act with a compulsory freeze and severe restraint, followed by the use of Part IV of that Act giving the Government powers to freeze prices and wages compulsorily.
I think that I served on three of the four Standing Committees considering the prices and incomes Measures. Those Measures were opposed by many hon. Members on both sides, because we felt that if ever such policies were going to work they would have worked tinder a Labour Government, with the declaration of intent and so on.
We had the July, 1967, Prices and Incomes Act, with the statutory powers renewed in 1968 and 1969. Finally, during the currency of the last of those Acts, "In Place of Strife" was produced, which resulted in the then Prime Minister and the right hon. Lady the Member for Blackburn (Mrs. Castle) being completely isolated in the Labour Cabinet from almost all their colleagues. They had to capitulate and withdraw the legislation based on that document in 1969, blowing up the dam. It is because they left nothing in its place that the flood of new claims came upon the country. From that moment onwards inflation increased, leading to the present situation.
If the Government produce a package with statutory backing, I think that it will be supported by the country as a whole at the start, but I do not believe that it will be successful for more than six to nine months—at most a year. Therefore, we must make it clear that such a package will not be renewed and that we shall use the pause which it will give us to work out new policies which will be effective once the package has been dismissed.
The new policy must be effective in the national interest in stopping inflation, it must be effective in the national interest by allowing increased industrial growth and it must be fair to all sections of the working community, whether they work 563 for the Government or for private enterprise, and to the sick and those who have retired. It must also provide a better balance between the two sides of industry, especially during the period immediately following next Monday's statement by my right hon. Friend the Prime Minister.
I should like to make five points for consideration. I hope that the second in particular will be noted, because I have not heard it mentioned elsewhere. First, we must cut the growth in the money supply so that more can be spent on industrial investment and less on finance going into the cash boxes for distribution by finance houses and others.
Secondly, during the recess I went on an all-party delegation to Sweden to study Swedish industrial relations. We can learn a lesson from Sweden which could be applied in this country. In Sweden it is the trade unions which decide how the national increase in incomes paid annually shall be divided among different groups of workers and wage-earners. Discussions take place like those which have been going on in Downing Street over the past week or so, and the employers, the Government and the unions decide how much can be given out in wages on the basis of increased production. If we could introduce such a scheme into this country, it would be up to the trade union movement to decide which groups of workers should receive what kind of basic increases. The idea is attractive, because it puts on to the shoulders of the work-people the decision on comparability of one job and another. Leapfrogging, which is the major cause of undue wage increases, could be avoided.
It would also be helpful if we could work out a national job evaluation scheme by an independent organisation, such as a university, to evaluate the work of people in different industries, including service industries, of nurses, teachers and so on.
The most difficult aspect would be to get the TUC to accept its responsibilities. But if there were public opinion behind the suggestion, which I believe there could be if it were properly promoted, perhaps the TUC and those responsible unions mentioned by the hon. Member for Southall would say "Let's have a go at this."
564 Next, if there is to be a new package there should be, particularly at the start of the period, a new balance during disputes. I recommend that social security benefit to those on strike should be paid on a repayable loan basis and, second, that some kind of national insurance and overdraft guarantee be given to companies to cover their losses when they refuse to negotiate wage increases above an agreed figure.
Last, I suggest that new rules on picketing must be published, rules requiring 24 hours' notice to the police of a proposal to picket, and laying down that only those from the organisation engaged in the dispute shall be allowed to involve themselves in picketing.
I urge the Government to consider these matters carefully. If we are to have it, it must be a short-term package, because I am confident that, if it is presented decisively, it will be effective and acceptable to the country for about six months, but certainly not for longer than a year.
§ 3.0 p.m.
§ Mr. Alan Williams (Swansea. West)
Out of the various days of debate on the Gracious Speech, this seems to be the most appropriate on which to discuss consumer protection matters, so I shall direct my attention to that part of the Gracious Speech which touches upon it.
The House must recognise the fundamental imbalance here. Producers are increasingly becoming large firms, multinational firms, heavily financed firms, firms with legal expertise, and they are poised against consumers who, by the nature of the market, are dispersed and remain as individuals fighting against large producers or distributors. Consumers lack a central voice. They lack a knowledge of one another's community of interest. They lack any organisation. Often, the consumer is unaware of his legal rights, and he is unable to interpret legal jargon. He is afraid of the costs of the legal process, and he is suspicious of and overawed by the legal process itself.
On top of that psychological temptation to avoid the legal protections which already exist, the consumer is confronted by the changing nature of the product market. Goods themselves are becoming increasingly complex. It is more and more difficult for the layman to judge the 565 relative quality of goods because of technical details or, perhaps, because of varying chemical compositions which we are not equipped to judge.
In addition, the consumer is saturated by advertising—I am not at this stage interested in "knocking" advertising as such—advertising which is often irrelevant to the product itself and to the decisions which the consumer has to take.
For those reasons, if the commitment in the Gracious Speech is to be given meaningful implementation, two steps must be taken. First, we must have appropriate machinery to make consumerism effective, machinery for laying down central policy and for identifying issues. At the same time, we must have comprehensive legislation to eradicate the existing known abuses and to eradicate other abuses as the machine identifies them.
It is especially appropriate that one should press at this time for such machinery and comprehensive legislation to be introduced at once. First, we are on the eve of value added tax, the introduction of which will be accompanied by an unprecedented avalanche of disguised price increases. It will make decimalisation look like a masterpiece of smooth planning.
Second, we are on the eve of entry into the Common Market. I shall not digress into the rights or wrongs of entering the EEC. My purpose is to emphasise the danger that when we enter the pressure will be on us to wait for a common policy. The Community countries have been waiting for a common policy for 15 years, and in the last 12 months what central machinery they had has collapsed. There is no meaningful central machinery in existence there now. On the other hand, there are at Brussels protective industrial and trade lobbies every bit as effective, powerful and ruthless as their counterparts in Washington. It is small wonder that the Commission has recommended for the next 12 months the derisory sum of £90,000—a third of the amount we were spending on the Consumer Council alone—for consumer protection, education and research in a market of 250 million people.
Because of the impact of VAT, and because of the pressure which will be imposed on us to wait for a common 566 consumer policy, it is imperative that we press through our own legislation and set up the appropriate machinery at the earliest possible date.
For the machinery itself, plainly we need a Minister with consumer responsibility, for in the same way as the consumer interest in the country is dispersed so is the consumer interest within the Government dispersed. It is dispersed functionally through a large number of Ministries. With this sort of dispersal, it is difficult, not only to obtain coordination, but—and I am sure that those who serve in government will appreciate this—to get an overall policy. No Department has the strength or power to decide the basic consumer protection policy. Therefore, we need a separate Minister.
It will be very interesting to us to see whether that Minister, when he—
§ Mr. Williams
—or she, if her lobbying is successful—and I am not referring to the two hon. Ladies who are present, the Members for Lancaster (Mrs. Kellett-Bowman) and Keighley (Miss Joan Hall), although I wish them the best of luck in the competition about to take place —is appointed is a meaningful Minister separated from internal departmental pressures or a departmental minnow in a super Ministry. Super Ministries such as the Department of Trade and Industry and the Ministry of Agriculture, Fisheries and Food are sponsoring Ministries, and it will be difficult to convince the public that the Department of Trade and Industry, whose prime rôle is sponsoring the interests of industry, is able meaningfully to deploy the consumer interests and protect the consumer from the industries it sponsors. Therefore, a Minister is the first mechanistic requirement.
We also need a central body. I shall not resurrect the arguments about the Consumer Council, but I suspect that the Government are about to resurrect the ghost. I expect and hope that we are about to see a new central body rise from the ashes—and there are plenty of ashes from which those executed by the Government have risen. It will not be called the Consumer Council because that would be too blatant, but I am sure that the Government will think of a 567 suitable name. They must bring such a body into existence again. Because of the lack of cohesion on the consumer side and an inability to bring the voices together, the organised commercial lobbies will be more influential with Government Departments than the consumer can hope to be. Therefore, we need a countervailing force outside Government, independent of Government and seen to be independent of Government, able to speak strongly to the appropriate Minister on behalf of the consumer.
Also, there should be introduced, perhaps on an experimental basis and perhaps an expansion of the Manchester experiment, a small claims court to see whether it can overcome some of the public's inhibitions, financial or psychological, about pressing their legal rights.
On the policy side—and I should have liked to deal with this in detail, but I cannot do so because of the time—we expect to see at last the implementation of the Crowther Report. The Crowther Committee reported in March last year. The Government probably had the report for a month or possibly two months before that. Before the Crowther Report becomes law, giving needed protection to the housewife against doorstep sales and interest rates, it will have been gathering dust on a Government desk for more than two years.
§ Mr. Williams
It is disgraceful, because in this time many people, such as the victims of the Alpha Home Improvements Company, whose activities I have brought to the attention of the House, have been virtually swindled by people who managed to skirt round the hire purchase laws.
We expect date marking to be introduced. The Food Standards Committee has recommended that. I should have thought that the Government would feel able to deal with that matter this year. It should be dealt with urgently. It is no defence to say that it will present problems for the shopkeepers. It has not presented problems to shopkeepers on the Continent which they have not been able to overcome. Whatever difficulties stock rotation may pose for the small shopkeeper, they are nothing compared with the problems which will confront him in 568 trying to master the complexities of value added tax.
We expect to see unit pricing to protect the housewife, who at the moment needs a mini-computer when she shops in the supermarket. How can a housewife decide what is best value for money when she is faced with comparable goods some marked in imperial quantities, others marked in metric quantities, sometimes in volume, sometimes in weight? Permute all these possibilities and the confusion becomes apparent. Therefore there should be something in the legislation coming forward to ensure that unit pricing is introduced wherever possible. We want to be rid of those phoney guarantees with exclusion clauses, which should be outlawed, as recommended by the Law Commission in Scotland and, independently, in England and Wales. We should see an end to the abuse of double-pricing whereby manufacturers offer goods allegedly at reduced prices merely to conceal the fact that prices have been raised since the time the consumer last looked at the shelves.
I am grateful, Mr. Deputy Speaker, for the time I have been allowed. I should have liked to deal with these issues in greater depth. I hope that the Minister may be able to touch on some of them, although I know that some of them are outside his sphere of responsibility.
§ 3.11 p.m.
§ Mr. Peter Shore (Stepney)
I begin by saying that this has been a somewhat one-sided debate, one-sided, I think, in the double sense that there has been a whole succession of speakers from this side of the House—four in a row, which is pretty unusual and reflects the differential attendance of Members of my party as opposed to the supporters of the Government; and one-sided also because in terms of the quality and weight of the arguments deployed on this central issue of inflation, and, above all, of the contribution of food and agriculture policy to inflation, I think most people would agree that the arguments have been very heavily against the Government and in favour of those who have criticised.
I am aware and understand why the Minister himself is not with us in the closing stages of this debate. I regret it, though I understand it. I regret it because I wanted to say one or two things about 569 his speech, and, indeed, about his whole rôle as Minister of Agriculture, and inevitably, with his responsibility for food and food prices, they are bound to be a little hurtful to him. I think I must persist even though he is out here. The Minister of State, I know, is a doughty champion and will, of course, spring to arms if I am in the least bit unfair.
I wanted to say this about the Minister's speech which we heard at the beginning this morning. I do not know whether it was the cold he confessed to, or whether it was due to some prospect of moving to another post, or whether it was simply due to the general weight upon all our spirits that we feel as a result of the news last night and the breakdown of the talks in Downing Street. Whatever it may have been due to, it seemed to me that his speech was a noticeably different style of speech from that to which we have been accustomed. Gone was the ebullience, and, if I, too, may occasionally use the word, at times almost the impertinence of assertion with which we have been familiar. In its place was a soft, almost courteous, manner, consideration of different points of view, which really did come as a considerable surprise. I am a charitable man, and I like to think that really the most important explanation of this change of style and expression is that some sense of shame, some sense of the gravity of the events over which he has so helplessly presided, has begun at last to influence our Minister of Agriculture. There can be no doubt that he has presided over the most appalling period of inflation in food prices which has affected the food basket of every family in the country.
Yesterday my right hon. Friend the Member for Grimsby (Mr. Crosland) in the debate on housing and land pointed out that under the Labour Government there was a rate of increase in the price of houses of roughly 6 per cent. a year, not so good but nevertheless well within the ordinary range of experience. Then in 1971, he said, it rose to 10 per cent., almost double the previous figure, and in the first six months of this year there had been an almost inconceivable increase of 40 per cent. per annum in house prices. My right hon. Friend, rightly, had strong words to say about the Minister who presided over that sector.
570 What about the Minister of Agriculture, Fisheries and Food? What is his record so far? Under a Labour Government food prices rose roughly between 5 and 6 per cent. a year. In the two years of Conservative Government between September, 1970, and September, 1972, food prices have risen by 21.7 per cent.—in my estimate about 10 per cent. a year. The outlook does not seem to be good. I do not think that this year food prices are facing an explosion of quite the gravity which my right hon. Friend quoted for house prices, but part of my case against the Government and my concern today is the possibility of an explosion next year as we enter the European Community and begin the process of adjusting our prices to its prices.
On the evidence we have so far of food price increases of 21.7 per cent. in the past two years and one month, in the short term, on the basis of the five months from March to August which the Minister gave in reply to Questions last week, the evidence is that the annual rate of increase in food prices was 9 per cent. and in the last quarter it was 14.5 per cent. That is serious, and all the claims of only a few months ago that the rate of increase of food prices was being brought down and was under control have been shown to be either a fraud or simply a mistake.
We should not play too much with the figures for one or two months. We are all a little guilty of this. We should be serious in the figures we use to try to arrive at the truth of the matter. We should not try to confuse people by saying how well or how badly things have gone in a short period of time. That is not good enough; we must be more serious in the presentation of our case. Therefore, I am not investing too heavily in last quarter's figure. That is not important; the important thing is that over two years prices have risen by 21.7 per cent.
What do we expect in the year that is coming? This is important because, inevitably, a rise in the price of food has most grievous effects on those who are less well off in our community. It is well known that a person who is reasonably affluent spends only a small proportion of his income on food. For 571 somebody near the poverty line or living —or nearly living—on a retirement pension, food represents a large part of the weekly budget. The same is true of an ordinary family trying to bring up young children.
There has been only one serious examination of the forward effects of joining the EEC and adjusting to its higher prices and switching to support financing from the system of deficiency payments. An estimate made of the redistribution of income affecting people below the average wage amounts to over £500 million a year. I refer to Mr. Josling's study released earlier this year —a study which has not yet, so far as I can judge, been subjected to any serious challenge.
The issue of food prices has become even more serious. It appears to have been one of the matters which brought the crucial Downing Street talks this week to a halt. Since both the Prime Minister and the TUC have published full statements in today's Press, it is right that one should make a few provisional observations.
I was struck by the curious and artificial distinction drawn by the Prime Minister in his statement between some prices and costs which might influence prices and which might be the subject of joint discussions and a whole range of matters which affect prices but which in his view are not proper matters for discussion. I refer to paragraph 5 of his statement, in which he saidI would like to make one fundamental point. In these talks we have been discussing issues which affected prices and incomes and the relationships between the two. These are matters with which all three of us are concerned. Certain other matters which have been raised are essentially matters of government responsibility.The Prime Minister then went on to itemise some of those mattersThese are what might be called policy matters, such as accession to the European Community; the introduction of a fair rents system … and so onThose were precisely matters with which, according to the Prime Minister, the talks were not competent to deal. But these are matters which are the most sensitive of all items in terms of price acceleration 572 in modern Britain. In other words, those excluded areas will include the consequences of our joining the EEC in respect of food prices, value added tax—another tax which lies within the Chancellor of the Exchequer's general authority—and rents, land values and house prices, which are the curse of all who seek accommodation in our cities. That is the Government's official view of what subjects should or should not have been excluded from the purview of the Downing Street discussions.
Paragraph 7 of the TUC's statement saysThe critical problem is that if, following the floating of the £ and following accession to the EEC, food prices were to rise by a figure of, for example, 10 per cent. in the next 12 months, it would be quite impossible to obtain the support of workpeople for a policy of holding wages and salaries to a predetermined figureIt is precisely in this area of price control, the most sensitive of matters other than food, that the Government have thrown up their hands and said what the Minister said today, as he has said on so many other occasions, "I cannot control food prices. There is nothing I can do about it. "He says" I am the victim of world prices, of all kinds of things "or simply" I am not in control".
§ Mr. John Page
Does not the threshold agreement cover increases of that kind and has that not been catered for?
§ Mr. Shore
I am prepared to be diverted on that line, but then the whole question arises of the stage at which a threshold is to be introduced. If the Government are serious about reaching agreement on an anti-inflation policy, all these matters have to be thoroughly explored and thrashed out. This large and crucial area was in no sense adequately explored and dealt with by the Government up to the time when the talks ended last night. I do not want to press this any further now because we will be hearing more on Monday.
Faced with this appalling record of food prices, another of the Government's excuses is that it is not the cost of living 573 we need to worry about but the standard of living and, provided incomes are going up as fast as or faster than prices, somehow the point is proved. That is not what the talks were about. Incomes can exceed prices at the level of say a 50 per cent. increase in prices and a 60 per cent. increase in incomes in a single year. That would be an intolerable level of inflation. It is on the need to bring down this increase that the necessity for these talks and the abandonment of the earlier Government policy is founded. That is another excuse we will have to put on one side.
I have referred to the anxiety about future food prices and the consequences of our joining the European Community. There is no doubt that there is an extraordinary escalation in costs as a result of the common agricultural policy. The policy cost member States £400 million in 1967 and £1,000 million in 1970 and, according to the Government's White Paper, it should cost £1,400 million in 1973 and £1,600 million in 1977. That is a fairly big escalation. The fact is, however, that it is already over £2,000 million for this year. Anyone who thinks that this is not of concern to us knows nothing about the arrangements the Government have made. The bigger the budget, the bigger the burden we have to bear in terms of our contribution and the bigger the burden of taxation.
I am puzzled that costs should be rising so rapidly. It is difficult at first to understand, particularly when we are told that the gap between EEC prices and those charged in the rest of the world is closing. One would think that as that gap closed the cost of the CAP would decline or at least stabilise. The reason —the Minister will understand, though perhaps not everyone else will—is that half the cost of the vast CAP does not go to support prices within the Community; it goes to pay Community farmers the difference between their dumped prices on the world market—export restitutions—and the prices which are guaranteed inside the Market. So far as the gap between the world price and the Common Market price narrows, one would think that the need for restitution payments would decline. This has not been the case. Therefore, on this ground alone I find it extremely difficult to accept the figures which have been ban- 574 died about by the Chancellor of the Duchy of Lancaster and his right hon. Friend and that all we have to expect from membership of the Common Market in terms of food prices over the next five years is an increase of 10 per cent. at a rate of only 2 per cent. a year. Frankly, this is astonishing, and I do not believe that it will stand any serious scrutiny.
We must take into account not only the distinction between our own price level and the European price level, which is pretty big as things now are, but the effect of the devaluation of the £ which has gone on in the last six months. The nation does not understand that when the £ was floated last July it began to sink. As a result, we have suffered a devaluation of at least 10 per cent., which is bound to be reflected in the cost of our imported food to the full extent of the devaluation in the period ahead.
An authority in these matters as eminent as Prof. Kaldor, in his article in The Times earlier this week, made the point that on these grounds alone the increase next year in British food prices, and no other factors taken into account but the effect of our devaluation and the first tranche of harmonisation towards European prices, will be to raise them by 5 per cent. That leaves out all those other factors which have brought about a 10 per cent. per year increase in the last two years over which the Government have so supinely presided. Therefore, it is a very dismal prospect indeed.
What are the Government proposing to do? We are faced with a serious inflationary crisis in this country. In some curious way we have moved from the subsonic into the supersonic age of inflation somehow and somewhere during the past year. We have broken through a kind of sound barrier. We have certainly broken through a barrier of acceptability and safety for this country, and we must bring this situation under control in some way.
My right hon. Friend in his opening speech said that the Minister was responsible and asked what he proposed to do. I normally agree with my right hon. Friend, but on one point in particular he and I and everyone else now have to qualify our words with a question mark. The question is: Is the Minister responsible any more? Is there anything in the power of this House which can prevent 575 food prices in Britain, as a result of the Treaties of Accession and Euro-law, rising step by step during the next five years?
Has the Minister power any more to resist the upward rise of food prices which is no longer a matter for decision by this Parliament and by this Minister but by others who do not represent the people of this land? Do the rules allow him even the flexibility of subsidising the consumer, accepting that he can do nothing at all to deal with producer prices?
There are many other questions which I hope the Minister will at least begin to answer and throw a little light upon.
The right hon. Gentleman said that there would be a 2 per cent. increase as a result of EEC entry. To what prices was the right hon. Gentleman referring? Let us have a little information. Only a few months ago the chairman of the bakers' union, or whatever it is, talked about a 60 per cent. increase in the price of a loaf. He may have been talking about the rise during the whole of the transitional period.
We hear how certain meat prices have risen, lamb in particular. Does the Common Market lamb tariff begin to operate upon us? If so, as from what date and over what period of time do the various increases—I invite the House to think just of next year, not the whole of the next five years—really begin to operate? The Minister said in his statement of 17th July that for every month from February to July there were to be certain increases in the price of grain. The Minister of State can perhaps confirm whether that is so and say how he sees the situation.
I must allow the Minister time to reply to the points that I have made, but I have a few concluding remarks to make. Clearly, this is a subject which we could all develop at considerable length, but I want to put the problems to the Minister as I see them in the broadest possible way.
Whether through bad luck or bad judgment, the anti-inflation policy which the Government have attempted to pursue over the last two years has failed. Somewhere during the last two years we passed into what I called the supersonic age of British inflation, and just at the 576 moment when the whole nation is being asked to face this crisis—and that is what it is—the Minister is proposing to pour petrol on the flames of inflation by coupling Britain to the high-cost, inflationary food and agricultural system of the Continent of Europe. That is what is to happen. That is exactly the problem before the Government.
One of the really difficult things which the Government have to face, and which they have not faced, is that if someone in Britain is serious in his determination to stop inflation, to deal with the menace which concerns us all, he cannot at the same time press ahead with membership of the Common Market and impose upon the people of this land the food levies, the higher food prices, and, in addition, VAT and all the other arrangements which flow directly from membership of Europe. That is the problem. It must be either one or the other. The Government, in their stubborn intransigence, have chosen to go ahead, as it were, and try to do both.
We face considerable dangers. The problem can be solved. I think that we can overcome these difficulties. There is great confidence in the ability of this country to overcome its problems, but that is not the same as saying that our present problem can be overcome and our inflation can be halted by this particular Government, and even more by any Government led by this particular Prime Minister who has so much to answer for.
§ 3.39 p.m.
§ The Minister of State for Agriculture, Fisheries and Food (Mr. Anthony Stodart)
This has been, as the hon. Member for Enfield, East (Mr. Mackie) said, a fairly wide-ranging debate. I have noted that 26 different subjects have been raised ranging from an increase in air fares to the price of furniture, from straw-burning to Dutch elm disease.
Friday is not a day on which I am often accustomed to taking part in debates but it is not a bad day for having serious debates, because those who attend are probably keenly interested in the subject. Even though the hon. Member for Wallsend (Mr. Garrett) called me robust, with perfect truth, it was very nice to have the hon. Gentleman taking part in the debate.
577 My hon. Friend the Member for Devizes (Mr. Charles Morrison) was right when he described the speech of the right hon. Member for Workington (Mr. Peart) as being in the best Conservative traditions, because the right hon. Gentleman made, as all Conservatives do, a very venturesome suggestion, namely, that he would be ready to go anywhere with my Parliamentary Private Secretary. This immediately raised what I felt must be my protective instincts. I have heard that there was once a lady, whose name I think was Ethel M. Dell, who wrote repeated novels warning ladies of things that are called "fates worse than death". However, I am authorised to tell the right hon. Gentleman that my hon. Friend is very willing to show him the difference between cottage pie and shepherd's pie which she doubts if he knows.
I thank the right hon. Gentleman for the references he made about Iceland, which is a matter on which the whole House is united.
I, in my turn, can agree with what the right hon. Gentleman said about the value of the 1947 and 1957 Acts, in the first of which the right hon. Gentleman played a very important part. Those Acts have done all the right hon. Gentleman has said they have done for British agriculture. The system under which they have operated has worked well, the only thing against them being, as I have always thought, that it was difficult to get real expansion. Expansion in agriculture, regardless of which Government are in power, is needed because of its contribution to the balance of payments.
The report of the National Farmers' Union on hill farming is a thoroughly interesting document. My views on the value of hill farming are well known. I hope it goes without saying that we are giving the report very serious study. Because of the very depth into which the report goes, the study cannot be conducted in haste.
Coming on to the speech of my hon. Friend the Member for Devizes, good though this year's harvest has been, I recognise that through one of the quirks of nature which we do not pretend to understand, though the harvest in the West Country cannot be described by as strong a word as "disastrous", compared with the rest of the country the 578 West Country has not shared in this bounty.
My hon. Friend the Member for Devizes rightly said that farmers have responded agreeably for the call of expansion in the last year or two. This is largely because the farming community will always respond if they see that they are really wanted to do a job.
The hon. Member for Enfield, East said he thought that the main reason for this was high world prices. I would not claim that high world prices have not had their influence. I am not saying that throughout the period of Conservative government agricultural policy has been perfect. I am not saying that everything was right under a Conservative Government and that everything was wrong under a Labour Government; I can remember taking a strong view on something called standard quantities. The right hon. Member for Workington will remember that. I believe, however, that within the last two years something has got across to the farming community—the realisation that the present Government believe that that community has a substantial contribution to make. That, coupled with the admittedly high world prices and the injections made in the October, 1970, exercise, together with the Price Review, has created a confidence that was not there before.
My hon. Friend the Member for Devizes asked me to answer his question about the future of the Australian sugar quota. He wanted to know whether it would be phased out. I can only say that discussions on this matter are proceeding.
The hon. Member for Wallsend asked me about land prices. There are two or three reasons for the increase. One is that the land area available for farming is reduced every year by 50,000 acres. If we total up the land lost in this way since the war we find that it amounts to an area equivalent to the county of Norfolk, the North Riding of Yorkshire or the county of Lancashire. That land has disappeared altogether from farming. That is the cumulative result of 50,000 acres of land being taken out of production annually for one reason or another. That is creating a shortage.
Secondly, there has been the concession in respect of estate duty. That is undoubtedly an attraction. If we were to do away with it we would immediately 579 reverse the policy of successive Governments in undertaking to try to create larger units so as to make them more efficient. To remove the concession would cause estates to be fragmented.
But the most significant reason for the huge increase in land prices is the fear that people have of terrible inflation and the belief that land and investment in it is a hedge against that inflation. One thing that is certain is that there will be a very low return on it.
The hon. Member for Enfield, East asked whether I could help to bring Scottish and English statistics into conformity. I shall examine the possibility. It is a sensible suggestion. He also asked me what thoughts we were giving to the possibility of altering the common agricultural policy. Much thought is now being given by members of the Community to methods of injecting income without increasing end prices. We have a great deal of experience to contribute in this respect. Incidentally, a move of that kind would fit in admirably with the policy of ours about which the hon. Member rather taunted us—our regional levy policy—because the production grant system was an integral part of that policy.
The hon. Member for Swansea, West (Mr. Alan Williams), who waited patiently to speak, asked me about consumer protection. I cannot say anything this afternoon other than to assure him—and perhaps to make the sensational announcement—that the subject is being given very careful consideration. It was fair to allow time for the receipt of comments from those who have to face the problems which exist concerning date-marking. My right hon. Friend will waste no time in examining that matter.
§ Mr. Alan Williams
Is it envisaged that the timetable laid down in the report will be met and that it should be operational within three years?
§ Mr. Stodart
I hope so.
The right hon. Member for Stepney (Mr. Shore) referred to the appalling period of inflation and asked what was the reason for it. The right hon. Gentleman does not appear to have listened to my right hon. Friend's speech and the explanations he gave. I shall go over 580 some of the points again. My right hon. Friend said that he wanted no excuses and no alibis, and I shall not offer any.
We have had from the Opposition the minimum of constructive ideas about how we should tackle the problem. Not one right hon. or hon. Member opposite has said how the Labour Party would tackle the matter. I must remind the right hon. Gentleman that it is less than three or four months since he said:Whether or not the £ floats down and whatever the percentage, inevitably food prices will be affected.I hope that honest and forthright admission, even if it is not more than a statement of the obvious, is in people's minds today.
There is no question that the uncertainty of recent days has been due to the failure to secure agreement on how to tackle inflation. However, I, like my right hon. Friend and the right hon. Gentleman, wish to say nothing that will add to the disappointment which everyone feels at the failure of the tripartite talks. Various hon. Members from both sides of the House have commented on the talks. They were of such crucial importance to everyone in the country that it is not useful to impart blame. To do so could cause great harm because hardly anyone here knows all the facts of the case. It is for my right hon. Friend the Prime Minister to inform the House of the facts, and that he proposes to do on Monday.
The only thing which I resented in what the right hon. Member for Workington said was the suggestion he made that the Government might interfere with the agricultural wage award. Nothing that my right hon. Friend said at Luxembourg or anywhere else has suggested that might happen in any degree. It was effrontery on the part of the right hon. Gentleman, for whom I have great affection, to make that suggestion after his Government once referred similar awards to the Prices and Incomes Board. There is no excuse for higher paid workers to use the award as a basis for their claims and to maintain the differential which, sadly, has always happened.
The right hon. Gentleman was right when he said that any decline in the value of the pound inevitably has results for a country like ours which imports such 581 a large amount of food. It is surely outstandingly obvious that one thing we can do to protect ourselves is to grow more food at home and to be less dependent on overseas supplies.
I now turn to the main feature of the debate, the question of prices rather than agricultural production. The right hon. Member for Anglesey (Mr. Cledwyn Hughes) said on 13th May, 1970, that he recognised thatincreased costs which cannot be absorbed, including increased wages, may have to be passed on in the form of higher prices. It is important that this should be acknowledged by all concerned."—[OFFICIAL REPORT, 13th May, 1970; Vol. 801, c. 1246.]It was said on the same day that in 1969 food prices went up by 5½ per cent. and earnings by 10.9 per cent. That was stated as a cause for great satisfaction by the then Government, but I believe that the seeds of disaster were planted for the nation's economy then and they have been nourished ever since. This has led to the situation described by the hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown), which is the basis of our troubles.
I have not time to correct the right hon. Gentleman's statement that we deliberately set out on a high food price policy. In fact, the levies have had no effect. When in opposition, neither my right hon. Friend the Member for Grantham (Mr. Godber) nor I, who perhaps spoke more on this subject than did any others, disguised the fact that as a result of changing the system of support by which farmers obtained part of their returns from the taxpayer, prices would have to rise a bit. We said it during the election without hesitation.
§ Mr. Stodart
If I give way, I shall not be able to cover all the points which have been raised.
582 On no occasion have we hesitated to say that as a result of the policy, prices would be bound to rise. But the system that we had hitherto would not have kept food prices down. What it did was to help to ensure a return to farmers if prices were low. It did absolutely nothing to stop world prices rising. That is why the change to levies has had a minimal effect, if any, on food prices.
Even the right hon. Member for Workington has said that sometimes price policies have been shattered by factors outside Ministers' control, by the international situation affecting world prices, matters which every Minister of Agriculture, Fisheries and Food must consider. The hon. Member for Enfield, East has said that Ministers know quite well that this country, which buys half its food from abroad, does not have a lot of control when there is a world scarcity. There is a world scarcity now. Although we have had wonderful harvests, it may be a coincidence that there have been problems elsewhere. These range from the fact that the shoals of anchovies off the South American coast have all gone astray and forced the price of fish meal to astronomical heights, to the Russian harvest failure and the droughts and now floods in New Zealand. These are all factors desperately affecting our food supplies.
What we must do is to get inflation under control. That is the basic problem, as has been admitted in the past four or five days. It will be for my right hon. Friend the Prime Minister to tell the House on Monday what action can be taken.
I fear that there are many points that I have not had time to deal with, and I know that right hon. and hon. Members will wish me to write to them about them.
§ Mr. Peartrose—
§ Debate adjourned—[Mr. Rossi.]
§ Debate to be resumed upon Monday next.