§ 3.26 p.m.
§ LORD WELLS-PESTELL rose to move, That the Draft Calf Subsidies (United Kingdom) Scheme 1974, laid before the House on March 13, be approved. The noble Lord said: My Lords, as your Lordships will know, calf subsidies have been paid for over 25 years, and there can be no doubt as to their success in encouraging the rearing of suitable calves for beef production. Three years is the longest time allowed for a scheme under the Agricultural (Calf Subsidies Act) 1952. The purpose of the Scheme before this House is to provide for the continuation of calf subsidies for a further three-year period from this coming Monday, April 1, subject always to amendment within the three years if considered necessary by the Government and approved by Parliament.
§ As in the existing Scheme, Part I, which is known as "Stage A", provides for the certification of live calves and covers calves born on or after October 30, 1973, and up to and including October 29, 1976. Part II, which is known as "Stage B", provides for payment on eligible carcases certified during the period from April 1, 1974, to March 31, 1977, inclusive. The new Scheme contains two small changes concerning the administration of this Scheme which I will come to, with your Lordships' permission, in a moment.
§ Since the Draft Scheme was laid before your Lordships on March 13, the Government have reached agreement in the Council of Ministers on measures to be taken to support the United Kingdom beef industry. The combined effect of the measures should be to prevent increases in the price of beef in the shops. In accordance with Treaty procedures, the Government have informed the Commission of their intention, subject, of course, to Parliamentary approval, to safeguard the position of beef producers in Great Britain by an increase of £10 per calf in the calf subsidy. The details of the new arrangements are in course of preparation and a variation Scheme, providing for new increased rates in Great Britain, will be 731 laid before your Lordships in the usual way. In the meantime, in order to provide for continuity in the payment of the calf subsidies, it is essential for a new Scheme to receive the approval of Parliament in time for it to be brought into operation on April 1, next Monday. Special arrangements are also to be made for Northern Ireland so as to safeguard the interests of consumers there while preventing the distortion of trade with the Irish Republic.
§ I now turn, my Lords, to the two changes I mentioned which apply to the proposed Scheme which you have before you. These provide for the extension of the subsidy to live young bulls and for the removal of the dentition test for deadweight certification of bulls and young lightweight animals. So far as the first of these is concerned, the House may be aware that although subsidy has since 1969 been payable at Stage B on the carcases of young bulls meeting certain specified standards, young bulls have not been accepted for certification live at Stage A. I understand that, bull beef being a relatively new development, it was felt at the time that certifying officers would find it difficult to determine whether or not a young bull inspected on the hoof would develop a carcase of acceptable standard since some bull calves developed what is known as "bullish" characteristics—which I must confess, my Lords, did not surprise me when I read it, but I gather that it has some special significance to farmers. Often they produce dark meat not apparent until they are slaughtered. Since then, however, there has been increased experience with bull beef production and a greater understanding of conditions contributing to the unsatisfactory features to which I have just referred. It is felt that there is no longer any reason why young bulls should not be accepted for certification live and thus receive the same treatment as steers.
§ The Advisory Council for Agriculture and Horticulture in England and Wales have gone into the position of bull beef production and have recently produced a comprehensive and valuable Report. Their view is that by making it impossible for the producer to obtain subsidy 732 on his young bulls when alive, we are putting him at a disadvantage compared with rearers of other calves which are certifiable alive. One of their recommendations is that this constraint should be removed. We agree with this, and the proposed Scheme provides for young bulls to be eligible under Stage A, instead of their eligibility being delayed in all cases until Stage B—which is the dead carcase. Some bull carcases will of course continue to qualify at that stage, provided they meet the required standards and have not been certified live. The proposed extension of the Scheme meets with the approval of the agriculture industry, which is in favour of treating young bulls and steers in the same way. I am informed that the meat trade have accepted it as well.
§ In their Report the Advisory Council rightly lay stress on the safety requirements for inspecting and certifying live bulls. With this in mind the Scheme is so drafted that any certifying officer who finds on arrival at the farm that the safety arrangements are not reasonably satisfactory from his point of view will be able to refuse to inspect the animals until better arrangements have been made. We shall make sure that both the farmers and the certifying officers concerned are all aware of this. Apart from this, I am confident that farmers presenting live bulls will be very ready to take all the precautions needed to ensure that certifying officers are not exposed to what might be described as obvious risks. The safety measures to be undertaken by bull beef producers who wish to take advantage of these arrangements will be publicised by the Agricultural Departments between now and the end of June, the earliest time under the new arrangements when the first young bulls can be presented for inspection.
§ The second change was also the subject of a recommendation by the Advisory Council for Agriculture and Horticulture in their Report. It provides for the removal of the condition which requires young bulls to be slaughtered before the appearance of their incisor teeth. This dentition requirement was felt necessary in the early days of bull beef production in order to encourage producers to have bulls slaughtered at a relatively early age. This is no longer considered important 733 and the other tests of eligibility should ensure that the standards remain satisfactory. The draft Scheme accordingly removes this requirement for young bulls, and, to be consistent, for other lightweight animals also. Producers will then be able to send their animals for slaughter at whatever age they consider most suitable to meet market requirements without forfeiting the subsidy if permanant teeth are present, provided of course that the other qualifying standards are met.
§ The House may wish to be informed of the annual expenditure on calf subsidies. In the 1972–73 financial year the total sum spent was £31.9 million. Of this, expenditure in England amounted to £17.9 million; in Wales, £3.3 million; in Scotland, £6.4 million; and in Northern Ireland. £4.3 million. United Kingdom expenditure in 1973–74 is estimated at about £31.8 million. Expenditure in 1974–75 will be affected by the higher rates recently announced which will more than offset the decrease in the rates of subsidy which followed the 1973 Annual Review. The number of calves on which subsidy has been paid at Stage A has been running at nearly 3 million a year, and at Stage B at about 150,000 per year. This is an excellent and successful Scheme which continues to have as its object encouraging the retention of calves for beef. I commend this Order to your Lordships and hope that your Lordships will give it your approval.
§ Moved, That the Draft Calf Subsidies (United Kingdom) Scheme 1974, laid before the House on March 13, be approved.—(Lord Wells-Pestell.)
§ 3.35 p.m.
My Lords, may I also congratulate the noble Lord, Lord Wells-Pestell, on his appointment as a Lord-in-Waiting and indeed on his first speech at the Dispatch Box. I am glad that it was on agriculture. I hope that he enjoys his time in dealing with agriculture, although I rather gather, particularly from the Answers to Questions this afternoon, that he will not be wholly restricted to agriculture. We are grateful to the noble Lord for explaining the purposes of this Order. I do not propose to go into the details of what happens if one has a bull or an animal with "bullish" characteristics, but those of us who do wish to know what happens will 734 be able to find out the information from what the noble Lord has said.
We welcome this Order because it continues what the Conservative Government did when they were in power. It is quite surprising when one recalls that only 12 months ago it was considered that the beef industry was in a fairly reasonable state, so much so that the calf subsidy could in fact be decreased; and over the last 12 months we have seen a considerable change in this situation, where the price of feedingstuffs has gone up at the same time as the price of livestock has gone down. We welcome the continuation of this subsidy which has done so much to encourage the production of beef and the maintenance of beef herds, and which has given so much confidence to producers of calves for beef.
However, I should be grateful if the noble Lord would clear one slight confusion from my mind. When the last calf subsidy Order was introduced it referred to calves born on or after April 16 of last year, and one might have thought that would continue for 12 months; but I see that this Order refers to calves born after October 16 last year. How is it that it was necessary to produce an extra Order now, when one would have thought that the previous Order, which did virtually the same thing, would have continued? It may be that the answer is that this Order is slightly different. But at a time when we are hearing a great deal about the cost of food, the shortage of food, and indeed food subsidies, may I tell the noble Lord that we on this side of the House infinitely prefer this type of subsidy, which actually encourages the production of food, and of a particular food which is wanted, rather than the massive expenditure of public funds on food subsidies which are wholly indiscriminatory in their effect and yet whose effect for each particular item is very small indeed. So the noble Lord will have our support, and willingly, for this type of subsidy which should help in the production of food.
I hope that the noble Lord will encourage his right honourable friend to use his influence in Brussels (he has used it in Brussels this last week) to get the Community to adopt this kind of support and incentive for beef production, rather than to rely solely on the "upping" of 735 the end price of the product, and intervention into cold store, as the method of agricultural protection for beef within the Community. This would enable farmers within the Community to have a return for keeping beef other than by charging the housewife increased prices. This was the point which the right honourable gentleman the Minister of Agriculture was so concerned about last week. I hope that he will try to persuade the Commission to use this type of support, which is a British type of support, in the Common Market. I believe that he will not find the Commission wholly unreceptive to this idea. They may take some persuading that it would be right, but I hope he will urge upon his right honourable friend to persuade the Community to adopt this kind of support; and there may be others as well.
The noble Lord referred to the Minister's recent announcement of the increase of £10 per calf in the calf subsidy which he negotiated in Brussels at the recent meeting of the Council of Ministers. If I may I should like to ask him one or two questions about that. Will this increased subsidy be payable at the same time as the present subsidy to which this Order refers'? I did not quite catch what the noble Lord said—I thought he said it was payable from April 1. In that case this would not run exactly the same as the current Order which we are considering, which in fact runs from October of last year. I should be grateful if the noble Lord would clarify this. I think he said that an additional Order would be produced. Will that Order, in fact, just be for the increase of £10 or will it be a new Order which will cover the £10 plus the existing subsidy which this Order incorporates? Is the increase in price of £10 per calf the subsidy for only one year or, like this Order, will it go on for three years?
I think the noble Lord's right honourable friend negotiated in Brussels that this sum of £10 per calf should be given to British farmers. This was a sum totalling £38 million. But for some reason it was considered that the right way to support beef production in Northern Ireland was not to give them a subsidy of £10 per calf but to give them a subsidy of £2 per cwt. on a finished bullock. Of course, if a 10 cwt. bullock gets £2 per cwt. Then 736 in fact in Northern Ireland he will get a subsidy of £20 whereas the British bullock will have received a calf subsidy of only £10. Why is that so? If it was thought appropriate to support beef production in Northern Ireland by giving a subsidy on the fat bullock price why was that not used in England, Wales and Scotland as well? One would think that to be a more appropriate method of supporting the beef industry.
Is it not also a fact that, when the noble Lord's right honourable friend negotiated this in Brussels, Eire said that if Great Britain was going to be permitted to give a subsidy of £2 per cwt. on fat cattle in Northern Ireland they must be allowed to give a similar subsidy in Southern Ireland, because otherwise there would be a confusion of animals going from the South to the North of the Border and across the Border? Is it not a fact that the Eire Minister of Agriculture got an agreement from the Council of Ministers that Eire should give a subsidy of £2 per cwt. on a live bullock? This is the real point: my understanding is that Eire got this agreement to give a subsidy of £2 per cwt. but got the Commission to agree to pay this out of Community funds, whereas the right honourable gentleman the Minister of Agriculture and Fisheries was satisfied with the agreement to give this subsidy, totalling £38 million, not out of Commission funds but out of the British taxpayers' pockets. So on the face of it, it must seem that what was hailed by the Minister of Agriculture as something which has been done for the British housewife and for the British farmer has in fact been a rather expensive piece of negotiation whereby the British taxpayer has had to find a subsidy, which in Eire was found out of the Commission's funds.
I do not wish the noble Lord to reply to that specific question if he feels he would rather not, but this is the first time that we have had occasion to consider what his right honourable friend said in the Statement on Monday. In fact, as the noble Lord, Lord Wells-Pestell, quite rightly said, the subsidy of £10 per calf which he is going to introduce later is very much tied up with this subsidy and I thought it was only prudent to draw your Lordships' attention to it at this particular time because I believe the effect of it is really quite significant.
737 In the main we approve this Order, We congratulate the Government on continuing it and continuing what we did in Government, and we hope that they will continue the policies which we operated, I like to think, so successfully. Also we congratulate the noble Lord, Lord Wells-Pestell, on taking it through your Lordships' House and explaining so carefully and so clearly what it is about. It is a change for him because normally he is more used to being heard speaking on such subjects as penal reform and local government officers. I hope he will find the change agreeable.
§ LORD LLOYD OF KILGERRAN
My Lords, may I add my humble congratulations to the noble Lord on his appointment. Many of us know of his fine record of public service outside this House. His name is even held in high esteem in Wales, and perhaps some Welshmen may say that is inevitable having regard to the large of number of double "ll's" that he has in his distinguished title. However, may I be allowed to enter a small note of discord because I wish to express my considerable disappointment that the Government have lost an opportunity of giving much greater assistance and encouragement at this time to members of the livestock rearing industry in Great Britain. I fully realise that the Government have only been in Office a matter of three weeks, but if they are serious about encouraging the maximum economic production of food in this country—and reference was made to that in the gracious Speech—then it would appear to us on these Benches that there is a great deal still to be done in this area.
My information is that if the Government are not very careful there will be a wholesale scramble to get out of livestock production in many areas, particularly unless confidence can be restored in that industry. May I therefore express the hope that the noble Lord will consider again shortly the financial proposals in the Order which he has brought before this House to-day and which he proposes to supplement a little later in this Session. I should like to ask the noble Lord one question. Will he also give serious consideration to extending the scope of the Livestock Rearing Act of 1951 so that it will apply to the whole of the country 738 and therefore permit many more beef herds to qualify for the hill cow subsidy?
THE DUKE OF ATHOLL
My Lords, I should like to emphasise what the last speaker has said. I believe it is a fact now that the average beef animal produced in this country is being produced at a loss of something like £13. The £10 extra will, of course, cover about three-quarters of this loss but it seems to me that if we want to continue to keep up our beef production it is essential that either the price must be allowed to rise or the £10 extra subsidy should be increased. Otherwise many people who are rearing beef animals at the moment will go out of beef and into barley or wheat and this would be bad for farming in general and bad for our Sunday luncheon in particular.
§ LORD WELLS-PESTELL
My Lords, I am grateful to the noble Earl for his kind observations, but I should like the House to know that I am more indebted to him because he gave me some indication as to some of the things he might be asking. That has enabled me to provide (I hope) satisfactory answers. I thought it was a very generous gesture and I appreciate it very much indeed. With regard to the noble Earl's comments about the calf subsidy scheme which he himself was responsible for introducing on April 5 last year, my recollection is that it was in fact a variation Order in which there were changes in the subsidy. I may be wrong about this, but I think I am right. Therefore, they accounted for the new rate taking effect from April 16, where we have gone back to the original date of the subsidies payable from October 30. I think I am right about that, but if not, I hope the noble Earl will say so.
My Lords, we ought not to confuse the immediate need for food subsidies in certain directions; I think this is a matter of opinion. One has to bear in mind, if I may say so with very great respect, that the purpose of this subsidy is surely to stimulate and sustain a high level of production in beef for the future. Therefore one has to do something now that is going to have a long-term effect. Food subsidies, generally speaking, are things that have to be applied immediately in order to deal with the cost of living, and to avoid rises in the cost of living, so I 739 do not think one mutually excludes the other; sometimes one has to have both going at the same time. I take the point of the noble Earl, Lord Ferrers, with regard to getting my right honourable friend to do something at the E.E.C. perhaps to broaden subsidies along the line the noble Earl suggested. I understand that so far as the past is concerned, the Community has considered measures of this kind, but found very serious problems in the matter of cost and administration. But I will draw the attention of my right honourable friend to the remarks of the noble Earl who is very informed on these matters, as all of us on this side of the House recognise. I am sure my right honourable friend will give those remarks very careful consideration.
My Lords, at one point I thought that the noble Earl. Lord Ferrers, was of the opinion that the calf subsidy was only in respect of £10. As the noble Duke, the Duke of Atholl, pointed out, it is an addition, so the subsidy now for heifers will be £16.50 and for steers, £18.50. There is another reason (which perhaps the noble Earl will allow me to deal with in a moment) why this is very fair, because the actual subsidy that will be given in Northern Ireland is about £1.70 and not £2.00. When one multiplies £1.70 by 10, the subsidy is much the same as it is now—in fact, between £16.00 and £18.00. I would draw your Lordships' attention to the fact that so far as those subsidies are concerned, we are talking about calf subsidies where, so far as concerns Northern Ireland (if I understood the position correctly), this refers to the price for the finished animal. I should think there is some difference there that has to be taken into account.
My Lords, I am grateful to the noble Earl for saying that I need not deal at this stage with the attitude of Eire to this matter and whether the payment of subsidies for Eire will come out of the E.E.C. As I understand the situation, Eire is receiving the normal E.E.C. prices, as within that price system. I have no information at all which leads me to think they will be put at an advantage by this, but the noble Earl did say that I need not answer in detail this afternoon. Frankly, I should like to look at it for myself. Once again, I am grate- 740 ful to the noble Earl for the way in which he has dealt with this matter.
My Lords, I should like to say to the noble Lord, Lord Lloyd, and to the noble Duke, the Duke of Atholl, that perhaps they will allow me to read what they have said this afternoon and to pass on this information to my right honourable friend for his consideration. I do not think it will be disputed in any part of this House that the present Minister is deeply and sincerely committed to agriculture. If anything can be done, I feel sure that my right honourable friend will do it.
§ On Question, Motion agreed to.